Serious allegations made over franchisee treatment
A civil claim brought against mortgage giant Dominion Lending Centres (DLC) and its CEO and co-founder Gary Mauris in British Columbia’s Supreme Court alleges “bullying, threatening behaviour and intimidation” by Mauris towards franchisees and others in the industry, while also claiming that the executive “has engaged repeatedly and consistently in creating a workplace afflicted by sexual harassment and discrimination.”
The claim, which was launched yesterday (July 27) on behalf of franchisee Canadian Mortgage Experts (CME) and its team lead Michael Lloyd, alleges that DLC – one of Canada’s largest providers of mortgage brokerage services – treats its franchisees “unfairly and high-handedly”, exerting control through a “one-sided” franchise agreement.
It claims that Mauris “regularly makes inappropriate comments to and about, and makes inappropriate advances towards female mortgage originators and head office staff,” while also alleging that the DLC CEO “engages in bullying, threatening behaviour and intimidation with respect to franchisees, their mortgage originators, competitors and others in the industry.”
CME became a DLC franchisee in 2010, with the claim stating that the franchise agreement was extended in 2016 and restated in early 2020.
The claim describes that franchise agreement as “one-sided” and drafted by DLC solely with the intention of benefiting the company at the expense of its franchisees. It claims unequal treatment of franchisees over fees, and lists as examples of DLC’s misconduct its alleged additional incentives negotiated with lenders, alleged failure to comply with the Mortgage Brokers Act and related enactments, and alleged interference with franchisees’ human resources.
It also says that DLC has told franchisees that they must put at least 50% of mortgage business (regardless of lender) through Velocity in order to transact business with the HSBC lender. “The mandatory use of Velocity is intended to benefit DLC’s controlling owners, including the defendant Mauris, at the expense of franchisees,” it claims.
None of the allegations made against DLC or Mauris in the civil claim have been proven in court.
In response to the allegations, Mauris, chairman and CEO of DLCG, issued the following statement.
"We have complied with the provisions of the franchise agreement and are comfortable with our legal position relating to the claim," he said. "We consider this claim to be entirely without merit and we intend on launching a vigorous defence. We find it incredibly disappointing to be served with such a frivolous claim by CME after it has enjoyed over a decade of success as a DLC franchisee. Further, we find CME's claims curious given they have chosen to enter into multiple successive franchise agreements with DLC (the most recent in 2020). We understand that Mr. Lloyd is unhappy about the success and increased adoption of Newton's Velocity, however, a meritless class action is not going to change DLC's approach.
"We are humbled and truly touched by the tremendous outpouring of support by our many franchise owners and mortgage professionals in response to the reporting of this matter."