TIMS FIGHT IS BREWING
RENOVATIONS HAVE SOME FRANCHISEES UP IN ARMS
Franchisees say $700M renovation by chain could cost them $450,000 per store
Tim Hortons plans to renovate most of its Canadian restaurants over the next several years in what some franchisees say is another “ill-conceived” move that will cost individual restaurant owners about $450,000.
The coffee-and-doughnut chain and its restaurant owners will invest $700 million to gussy up almost all its Canadian locations over the next four years, the brand said. It declined to answer questions about what portion of the total will come from the chain versus franchisees.
The new restaurants will have lighter, more natural looking, exteriors, and feature upgraded, open-concept seating, the Restaurant Brands International-owned chain said in a statement.
“The expectations of our guests are evolving,” said Alex Macedo, the brand’s president, in a statement explaining the design change.
The decision has generated more animosity between the chain and an unsanctioned franchisee group, the Great White North Franchisee Association.
Earlier this month, the company held a call with franchisees explaining they wanted each restaurant owner to spend about $450,000 to renovate their stores, the GWNFA’s board of directors said in a letter to its members.
The board acknowledged many of its members “will have problems getting the finances in place to carry out these renovations” and called on the company to show a full costing of the renovation program.
It advised members, which make up about half of all of Tim Hortons Canadian franchisees, not to sign or agree to anything until more details are disclosed.
“This is just one more in the string of ill-conceived programs brought forward by a group of executives who do not understand foodservice, franchise operations or marketing,” the letter reads.
Restaurant Brands International, “wants to fix a problem it cannot solve, mainly lack of sales, by getting us to spend money while they contribute very little,” the letter said.
Tim Hortons recorded a fifth consecutive quarter of sluggish sales in mid-February, according to RBI’s most recent quarterly earnings report.
The GWNFA formed about a year ago to give a voice to frustrated restaurant owners and fight against what they say is mismanagement of the chain by its corporate parent, RBI, known for drastic cost-cutting measures at the fast-food outlets its acquires.
The two groups have taken their battle to the courts with multiple lawsuits, and most recently entered a showdown over how to handle Ontario’s roughly 20 per cent minimum wage increase. The GWNFA accuses RBI of failing to help franchisees offset the increased labour costs through a 10 per cent price hike on all menu items.
RBI did not agree to the price hikes, but called the actions of some franchisees in the province who clawed back employee benefits, like paid breaks, reckless and completely unacceptable.