Tim Hortons franchisees blast Ontario premier

‘Offended’ over founding families remarks

TORONTO • An association representing Tim Hortons franchisees has issued a scathing response to Kathleen Wynne’s comments about the coffee and doughnut chain’s founding families.

“We are offended that (Wynne) has mischaracterized Jeri Horton-Joyce and Ron Joyce Jr. in this way,” the Great White North Franchisee Association said in response to the Ontario Premier’s remarks Thursday.

Wynne called a decision to cut employee benefits at two Tim Hortons restaurants in Ontario owned by Ron Joyce Jr. and his wife Jeri HortonJoyce, whose fathers cofounded the coffee chain in 1964, a “clear act of bullying,” and implied that the founders’ children were vastly enriched when the business was sold.

Wynne’s remarks came after the Cobourg, Ont., business owners told their employees that they would no longer be entitled to paid breaks and would have to pay at least half of the cost of their dental and health benefits as of Jan. 1 to offset the province’s $2.40 hike in the hourly minimum wage.

“The chain was sold for billions of dollars, and when I read how (Joyce Jr.) was treating his employees, it just felt to me like this was a pretty clear act of bullying,” Wynne said.

Parent company Restaurant Brands International LP had already pointed the finger back at its own franchisees in a statement. “Almost all our restaurants in Canada are independently owned and operated by small business owners who are responsible for handling all employment matters, including all policies for benefits and wages, for their restaurants,” the company said Wednesday.

The Great White North Franchisee Association (GWNFA), which formed last year out of a frustration with management that has been running the parent company since its mega-merger with Burger King in 2014, chided Wynne for seemingly conflating that deal with Joyce’s final divestment of shares, which occurred more than a decade ago.

“Ron Joyce Sr. sold the Tim Hortons chain to Wendy’s International Inc. in 1995,” the GWNFA said in a statement. “The current owners, 3G Capital/Restaurant Brands International, a Brazilian company, purchased the Tim Hortons chain in 2014 for $12.5 billion dollars (not $11.4 billion as stated by the Premier), almost a decade after Ron Joyce Sr. sold his interests in Tim Hortons.”

The 1995 Wendy’s deal, a combination of shares and debt assumption, was worth US$400 million and made Ron Joyce the largest shareholder of the combined company at the time, with 16.45 million shares. In 2001, Kathleen Wynne Joyce retired from Wendy’s management and sold 9.7 million shares back to the firm for $250 million. He sold the remainder by January, 2004, and is worth an estimated $1.4 billion.

However, Ron Joyce Jr. was never an owner of the parent company, just a franchisee, the association said. He and his wife are, like other small-business owners, trying to offset the increased costs of the wage hike and added costs, which works out to about $7,000 per employee a year for a franchise employing 35 staff.

In an emailed response Friday, Tim Hortons said while its restaurant owners have found the sudden transition to a higher minimum wage “challenging,” GWNFA’s claims are “unauthorized statements made to the media by a ‘rogue group’ claiming to speak on behalf of Tim Hortons, do not reflect the values of our brand, the views of our company or the views of the overwhelming majority of our dedicated and hardworking restaurant owners.”

The GWNFA, meanwhile, says that more than 50 per cent of Tim Hortons’ roughly 1,100 Canadian franchisees are members of its group.

Groups including the Ontario Chamber of Commerce, Restaurants Canada and the Canadian Franchise Association have been highly critical of the province’s plan, which implemented a minimum wage hike to $14 as of Jan. 1, a figure that will rise to $15 in January, 2019.

Large business owners including Loblaw and Metro have also warned the hikes would hurt their bottom lines.

But embattled Tim Hortons franchisees, who have filed class-action lawsuits against RBI, have it particularly tough compared to some industry rivals, the GWNFA says.

McDonald’s, Cara Foods and Starbucks have all announced price increases to help offset additional costs, the association says. RBI, meanwhile, is not allowing its franchisees to put through price increases, nor has the parent company offered reductions in food or paper costs to its franchisees.