Franchisees threaten litigation after losses from hack

An association representing 70 per cent of Tim Hortons franchisees is threatening its parent company with legal action after a computer virus caused intermittent cash register outages.

A letter obtained by The Canadian Press from a lawyer representing the Great White North Franchise Association to Tim Hortons parent company Restaurant Brands Inc. said if RBI refuses to meet with franchisees by Friday to discuss “deficient IT practices” and “future IT protocols” they will take the matter to court.

The two-page letter, sent Monday, said the recent virus, which Tim Hortons has yet to entirely resolve, has caused “partial and complete store closures, franchisees paying employees not to work and lost sales and product spoilages.”

The letter asked for compensation for the losses and answers to a lengthy list of questions about how the outage happened, what steps might have been taken to avoid it, what will be done to ward off future attacks and whether sales data were compromised.

In a statement to The Canadian Press, Tim Hortons said Tuesday it was working with an external vendor to address a virus causing intermittent cash register outages. It stressed no consumer data or credit card information had been compromised and said the issue has “almost entirely been resolved.” It said “a very small number of restaurants” are being impacted.

GWNFA’s letter called the incident “a failure” and noted that it comes “on the heels of the public relations debacle” from January when two Cobourg, Ont. franchises owned by Ron Joyce Jr. and Jeri Horton-Joyce, the children of the company’s billionaire cofounders, moved to offset the province’s minimum wage hike by cutting paid breaks and forcing workers to cover a bigger share of their benefits.

Days after the hike came into effect, hundreds rallied outside Tim Hortons locations to protest Joyce Jr. and Horton Joyce’s actions, while others vowed to boycott the brand.

The incident coupled with the recent hack “is causing tremendous downward pressure on the value the Tim Hortons brand,” GWNFA’s letter said.

In mid-February the firm recorded a fifth consecutive quarter of sluggish sales, and comparable sales at its restaurants around the world slipped 0.1 per cent for the 2017 financial year.