Tim Hortons franchisees threaten litigation after cash register outages

Tim Hortons
Stock image, for illustrative purposes only

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 that 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 claimed "a very small number of restaurants" are still 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 co-founders, moved to offset the province's minimum wage hike by cutting paid breaks and forcing workers to cover a bigger share of their benefits.

The wage hike forced companies to pay workers at least $14 an hour, up from the previous minimum wage of $11.60 an hour. The rate will jump again to $15 in 2019.

Days after the hike came into effect, hundreds rallied outside Tim Hortons locations chanting "hold the sugar, hold the cream, Tim Hortons don't be mean" to protest Joyce Jr. and Horton Joyce's actions, while others vowed to boycott the brand.

The outcry from 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 company recorded a fifth consecutive quarter of sluggish sales, and comparable sales at Tim Hortons restaurants around the world slipped 0.1 per cent for the 2017 financial year.