Disputes can arise in many different businesses, but the many layers of leadership can make franchises a particular challenge. Tim Hortons franchisees in Alberta and throughout Canada have sent a letter to the franchise’s parent company, Restaurant Brands International, regarding a computer virus which they claim caused significant losses. They say they will pursue civil litigation against the parent company should the company not meet to negotiate a resolution to the problem.
The civil litigation is being threatened after a number of stores had their cash registers knocked offline. The franchises were unable to complete any transactions during this time. This led to losses, including employee wages, food spoiling and missed sales. The franchise owners in Alberta and other parts of Canada who are members of the Great White North Franchisee Association (GWNFA) say that the parent company should compensate affected stores for these losses.
The parent company has advised that no customer data or credit card information was compromised during the shutdown, which affected less than 100 restaurants. According to reporting, fewer than 10 stores lost the ability to use their point-of-sale systems. However, franchise owners claim that this is not the first situation where they have lost money due to the parent company, and they are looking to hold them accountable through their franchise group.
Franchise agreements can often work for both parties, although changes of ownership or new circumstances can create legal difficulties. Civil litigation can be a worthwhile avenue for businesses at a standstill in such conversations. In order to broach this topic, it is a good idea to speak in depth with a lawyer about the best course of action.
Source: CTV, “Virus downs hundreds of Tim Hortons cash registers, furious owners threaten lawsuit“, Jeff Lagerquist, Feb. 27, 2018