MTY Comments

Last updated September 3, 2020

The following are statements related to MTY Food Group, Inc. (TSX:MTY) including those related to the whistleblower allegations announced by the company in 2020.

Statement Date Author Statement & Commentary
2-24-20 CEO Eric Lefebvre “[O]bviously, there's always going to be more store openings than more store closures for Cold Stone just because it’s such a big brand…. [T]hings are going to go well.”

CEO Eric Lefebvre made this statement about MTY’s sales leader during the February 24, 2020 earnings conference call. Thus the statement was ten days after the announcement of the whistleblower allegations and the ensuing, negative media, criticism from the investment community, stock plummet and in response to heavy questioning from financial analysts related to the allegations. Eric Lefebvre’s statement is contradicted by various public data including its own federal disclosures that indicate the company has not had positive growth within its U.S. locations since 2007 and has closed 500+ stores in the same period. Also, Forbes told the world the statement was not true four years ago, informed MTY it wasn’t true just a month before Eric Lefebvre made it and a U.S. law firm speaking on behalf of the MTY confirmed receipt and review of the whistleblower allegations.
2-24-20 CEO Eric Lefebvre “For 2020, we plan on reducing the amount of investing in acquiring new businesses as we do not anticipate major acquisitions….” “[W]e need to take a breather and to make sure that we stabilize everything before we start acquiring again....We want to make sure that we focus on the assets we have in the portfolio now and make everyone succeed…. [W]e have a number of initiatives that we are putting in place now to work with our franchisees… and try to make the stores as profitable as possible and have the best condition possible for our stores to remain open and do good business…”.

These are some of the comments related to franchisee profitability that MTY Food Group CEO, Eric Lefebvre announced during the company’s February 24, 2020 earnings conference. Franchisee profitability was among whistleblower allegations that this website reported to MTY. Notice, Eric Lefebvre’s comments specifically referred to acquisitions within two years, however, Cold Stone—MTY’s sales leader—was acquired four years ago. His comments were before COVID-19 impacted North American markets.
2-24-20 Gary O'Connor, MTY Audit Committee Chairman “On February 14, 2020, we announced that as a result of certain allegations made by an active employee of MTY, the publication of our fourth quarter results would be postponed… Although we cannot give details on the allegations, we can confirm that the allegations are baseless and the matters raised are all topics that MTY had evaluated and dealt with in the past [emphasis added].”

Gary O'Connor is the chairman of MTY Food Group’s audit committee and is confirming that his research found that the allegations were made by a “whistleblower employee” and the whistleblower allegations were “baseless and frivolous”. The latter would imply there is no merit to the allegations and therefore the company need not address these matters. However, though MTY Food Group has made no additional public announcements regarding the subject including a retraction of various statements or issued material impact statements, the company is quietly correcting whistleblower allegations reported by
2-14-20 CEO Eric Lefebvre o/b/o the MTY Board of Directors “MTY Food Group Inc. (‘MTY’ or the ‘Company’) (TSX: MTY) announces it has decided to postpone the publication of the fourth quarter results and the related conference call.... The decision follows certain allegations recently made by a purported whistleblower employee… [emphasis added]. MTY believes that these allegations are baseless and frivolous… [emphasis added].”

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