THERE IS A SUBSTANTIAL RISK OF FAILURE ASSOCIATED WITH MTY FRANCHISES. MTY AVERAGED AN 11% CLOSURE RATE IN FIVE YEARS WHILE CHARGING FRANCHISEES $239 MILLION IN KICKBACKS ON TOP OF REGULAR FEES. THEY CLOSED 2,594 LOCATIONS FROM 2016 THROUGH Q2, 2021. KICKBACKS CAUSE FRANCHISES TO COLLAPSE!

MTY’S BOARD MADE FALSE STATEMENTS TO INVESTORS WHILE ENGAGING IN A COVER-UP TO CONCEAL THAT IT WAS REPORTING FALSE DATA TO HIDE THAT ITS FRANCHISE NETWORK IS COLLAPSING. ITS CHAIRMAN, STANLEY MA, SOLD $43 MILLION OF STOCK WITHOUT CORRECTING THE FALSE STATEMENTS TO INVESTORS—POTENTIALLY COMMITTING INSIDER TRADING. MTY THEN INCREASED KICKBACKS BY $5.3 MILLION ON FRANCHISEES AND AUTHORIZED $3 MILLION IN ANNUAL DIVIDENDS TO STANLEY MA.

The Ethics of MTY Chairman Stanley Ma

Updated on September 18, 2021

Stanley Ma is MTY’s founder, chairman and by far the company’s largest shareholder. In a word, he’s the most powerful person in the company. Thus, decisions by MTY are decisions by Stanley Ma. We believe Stanley Ma has behaved recklessly in his duties as chairman. And because he always seems to be the person walking away with millions, it appears that it’s all for his personal financial benefit. He seems to operate in this fashion even when it’s potentially at the expense of his franchisees, board members, senior management, shareholders, his company’s financiers, employees and other stakeholders. We believe Ma has also put himself at personal potential legal risk.

Stanley Ma permitted Cold Stone executives to publish false statements to its U.S. federal disclosures and publish dozens of additional false or misleading statements directed at potential franchise investors to make it appear that the franchise was growing when it was in fact declining. Later, he allowed Lefebvre to falsely inform securities investors that Cold Stone was growing and put Lefebvre and O’Connor at potential legal risk by having them make additional false statements to investors in order to stop the plummet of the company’s stock.

His board failed to issue a material impact statement to inform investors that Lefebvre and O’Connor’s earlier statements were false, even though the falsity of that information is not ascertainable from other corporate disclosures based on the consolidated nature of the company’s financials. We believe, in the absence of such notice, Lefebvre and O’Connor’s statements remain inside information.

Stanley Ma then permitted board members Lefebvre and Orr to trade in the stock. Later, when the stock was well overpriced, we believe Ma used inside information as a motive to sell $43 million of his company’s stock while securities investors remained in the dark about the falsity of MTY’s board’s false statements.

Even though kickbacks can cause franchise networks to collapse, Ma and his board then increased kickbacks in Q2, 2021 by $5.3 million over the Q2, 2020 to $13.6 million while the CEO admitted franchisees were strained. The increase was just enough to cover the $4.6 million dividend payment for the quarter, which pays Stanley Ma $3 million per year. Thus, MTY is taking money out of pockets of franchisees to enrich Stanley Ma and other securities investors while their businesses collapse at an alarming rate and many are forced into bankruptcy.

It’s apparent even from the outside that Ma is a selfish person that will not hesitate to put board members, senior management, financiers, franchisees, shareholders and others at risk for his own selfish financial interests. The fact that he is able to convince sophisticated businesspersons to put their careers, licenses, finances and perhaps even their liberty at risk is not new. The company’s board and managers know officers “who are complicit in misleading the public, lie to the government, bilk investors out of their money… may personally face criminal or civil penalties and jail time.” The fact that they may have been following orders from Stanley Ma or someone else, is no defense.

Much like the thousands of MTY franchisees who have failed in the past five years and are left with the very sobering process of picking up the pieces, Ma’s board and senior managers are sons and daughters, parents, and grandparents. They have people that love them and depend on them. We believe Ma’s selfish actions have put these individuals’ careers, licenses, liberty at potential risk by lying, making false reports, board members standing idle or failing to respond.

We’ve seen disclosures by Lefebvre, O’Connor, St-Onge, unidentified Cold Stone executives and we suspect others. It feels as if Stanley Ma believes the more executives he involves in these disclosures, the less likely they are to report potential violations to the proper authorities. This is MTY’s chairman. It doesn’t get much more irresponsible than that. Ma’s behavior is one thing but the fact that his board and managers carried out some of the orders outlined on this website instead of resigning is a poor choice on behalf of their loved ones, in our opinion.

The fact that they’re willing to risk so much for a man that obviously cares so little about them as to risk their lifelong achievements for the sake of his own financial gain, is an afront to those in their lives that truly care for them. What’s the dividing line between a healthy principal/agent relationship and subjugation? We think some of these people are beyond it.

We believe Stanley Ma is playing a dangerous game with other people’s lives and the company is in serious trouble. We also believe regulators and prosecutors need to take a close look at Stanley Ma and MTY’s activities.

A cover-up “always makes things worse”.

MTY Food Group Executives & Other Photos