A closely watched dispute between Keller Williams and two of its former top Ontario operators has taken another turn, with a court denying their attempt to appeal an order blocking them from running competing Royal LePage offices.

In a ruling dated March 27, the Ontario Superior Court of Justice dismissed a motion for leave to appeal a Dec. 19 ruling granting Texas-based franchisor Keller Williams an interlocutory (temporary) injunction against franchisees Marvin Alexander and Sunil Daljit, along with other parties, to halt them from operating new Royal LePage brokerages for the remainder of their existing contract terms.

Alexander and Daljit are well-known in Canadian real estate circles. Alexander, a former Canadian director for Keller Williams, operated the Ottawa franchise, while Daljit led the Mississauga outfit. Both had long-standing ties to the brand, with franchise agreements with renewal terms extending to 2028 and 2031.

In June 2025, Marvin Alexander and Sunil Daljit rebranded their brokerages and took hundreds of agents to Royal LePage. Alexander and Daljit claim they were within their rights to move to Royal LePage, arguing Keller Williams undercut their promised exclusivity, brushed off alleged compliance concerns and let the Canadian system lose value.

At the centre of the case is whether franchisees can break away and align with a competing brokerage while still under contract. In granting the injunction, the December ruling found Keller Williams met the test required for this type of order, including showing there was a serious issue to be tried and that it could face harm if the situation continued.

No reasons were provided in the brief decision for dismissing the appeal motion.

 

Franchisees explain why they left

 

In a statement of defence and counterclaim dated Jan. 30, Alexander and Daljit allege Keller Williams’ conduct undermined their franchise agreements and justified their departure.

Through their companies, VIP Realty Inc. and Associates Realty Solutions Inc., they are seeking $5 million in damages, including claims tied to the alleged repudiation of the franchise agreements and the granting of the December 2025 injunction.

The filing cites alleged issues with the company’s Canadian operations, including trust account violations across multiple provinces, infringement of territorial rights and failures to disclose the diversion of royalty funds to a third party.

It also alleges tax and HST compliance issues tied to the profit share system, along with concerns about accounting standards, technology platforms and rising mandatory fees.

Alexander and Daljit state the franchisor “simply imposed its American business model … without adaptation to the Canadian marketplace,” arguing this “severely impeded” franchisees’ ability to operate and comply with Canadian laws.

The filing further alleges Keller Williams “systematically eroded the value of its brand” through conduct including “fleecing its franchisees with ever-increasing fees,” failing to meet Canadian regulatory and tax obligations, not enforcing system standards, and allowing Canadian royalty revenues to be diverted outside the country.

Alexander and Daljit argue that this conduct deprived them of “substantially the whole benefit” of their agreements and amounted to a repudiation of the contracts. 

They also argue that the non-compete and other restrictive covenants should not apply and are unenforceable because they are, as they describe them, overly broad and unclear.

 

Trust account allegations

 

Alexander and Daljit also allege Keller Williams failed to enforce regulatory standards across its Canadian network.

The filing claims the franchisor did not ensure brokerages complied with legal requirements governing real estate trust accounts, including rules that trust funds be used only for their intended purposes. It alleges franchisees reported discrepancies between trust account balances and financial statements, and, in some cases, operated with negative or nil trust balances for extended periods.

In court submissions filed in January, Alexander and Daljit included four pages of account information of Keller Williams brokerages – with the names redacted – which show about 50 instances of negative trust accounts from 2023 to 2025. 

They also allege the Keller WIlliams “knowingly failed to enforce” these obligations and “turned a blind eye” to ongoing issues across multiple provinces.

They argue the alleged conduct “created substantial regulatory risk for the entire Canadian system” and jeopardized the livelihoods of compliant franchisees, as well as agents and consumers.

 

Claims about royalty revenue 

 

The defence and counterclaim also raise concerns about how royalty revenues from Canadian franchisees were allegedly handled.

The filing alleges the franchisor “permitted vast revenues generated in royalties from Canadian franchisees to be diverted outside of the Canadian Keller Williams system” rather than being used to support and grow the business domestically.

According to the defendants, Canadian franchisees paid royalties to a company called Maple Leaf Regional Investors ULC, which then transferred a portion to the franchisor. They allege a significant share of those funds was redirected to a third party through what is described as a “Kubeco Payment.”

They allege the payment was made to a company owned by Ron Kubek, the former owner of the Canadian Keller Williams entity now known as Maple Leaf.

The defendants claim the payments “deprive[d] the Franchisor and Maple Leaf of the necessary capital to fulfil” obligations to Canadian franchisees, and allege the diverted funds may have accounted for more than 20 per cent of the franchisor’s gross income in some years.

They further allege the arrangement was not disclosed to franchisees, stating the franchisor “never disclosed the existence of the diversion of royalty” or its financial impact in required disclosure documents.

Allegations from the claim and counterclaim have not been proven in court. 

Alexander and Daljit replied to Real Estate Magazine with an outline of their defence and counterclaim. They did not confirm what, if any, impact the court’s decision to uphold the interlocutory injunction is having on their brokerage’s operation.