April 19, 2022
Gateway Market Canada Inc., Tobmar Investments Inc. and Tobmar Investments International Inc., which jointly operate a franchise system of approximately 150 convenience stores, bakeries and lottery booths across Canada, each filed an NOI on April 19. The majority of the companies’ stores are located in Ontario and operate under the “Gateway Newstands” brand, and most franchisees are owner/operators. The COVID-19 pandemic severely challenged the companies’ viability. Franchisees were forced to close down their locations for prolonged periods of time, and foot traffic remained significantly below pre-pandemic levels when stores were permitted to open. This led to, among other things, a steep decline in sales, a reduction in revenues from supplier payments, and an inability by franchisees to honour their lease obligations. Despite being able to reach and renew a forbearance agreement with TD Bank on several occasions, and despite having reached temporary accommodations with most major creditors, including landlords such as the TTC, the companies were not able to continue operating without fundamentally restructuring their collective affairs and indebtedness. Albert Gelman is the proposal trustee. Counsel is Dale & Lessmann for the companies.
By Dina Milivojevic