Dunkin’ Brands to Boost Legal Reserve After Losing Lawsuit (DNKN)

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The parent company of Dunkin’ Donuts, Dunkin’ Brands Group Inc. (NASDAQ:DNKN) would boost its legal reserve in the current quarter after a court in Canada ruled against the company in a case filed by a group of Dunkin’ Donuts franchises in Quebec.

The lawsuit was filed by the franchises in 2003. Ruling against Dunkin’ Brands, the Quebec Superior Court ordered the Canton, Massachusetts-based company to pay C$16.4 million plus costs and interest in order to compensate the franchises.

Dunkin’ Brands, which also owns the Baskin-Robbins brand, had already kept C$4 million aside in legal reserve. But, now the company expects to increase its legal reserve in the current quarter even though it does not agree with the court’s decision.

DNKN plans to appeal against the court’s decision as it believes the damages awarded to the franchises were unnecessary.

Dunkin’ Brands stock was flat in pre-market trading, at last check. The stock closed 1.39% lower at $34.72 on Friday. It has outperformed the broad market this year, gaining nearly 39%.

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