Sup­ply in­ter­rup­tion plagues Tim Hor­tons fran­chisees

Regina Leader-Post - - FP REGINA - HOL­LIE SHAW

Tim Hor­tons has sus­pended fran­chisee ship­ments on a range of items from one On­tario-based ware­house and has sug­gested dis­grun­tled fran­chisees try to source some of the com­modi­ties from Wal­mart un­til the prob­lem is re­solved.

The list of 45 “tem­porar­ily un­avail­able” items from the cof­fee and dough­nut chain’s fa­cil­ity in Guelph, Ont., in­cludes take-home pack­ages of the com­pany’s own Tim Hor­tons brand of cof­fee and sin­gle-serve pods, soda pop, bot­tled wa­ter, hot and iced teas, garbage bags and vinyl kitchen gloves.

Nor­mally, Tim Hor­tons restau­rant own­ers are legally re­quired as part of their fran­chise agree­ments to buy hun­dreds of such items di­rectly from head of­fice, not through a third-party re­tailer or sup­ply com­pany.

“I re­al­ize that this is cre­at­ing an is­sue into a busi­ness that is al­ready al­ways hec­tic,” says an April 14 mes­sage from Greg Hiltz, On­tario gen­eral man­ager of Tim Hor­tons, to fran­chisees across the prov­ince. The note, ob­tained by the Fi­nan­cial Post, ref­er­ences a sup­ply “in­ter­rup­tion” that oc­curred more than a week ago at the Guelph, Ont., dis­tri­bu­tion cen­tre, which serves more than three quar­ters of Tim Hor­tons’ roughly 1,750 stores in the prov­ince, its big­gest op­er­at­ing re­gion.

The lat­est news comes amid a pro­longed pe­riod of dis­tress at the chain: The brand has taken a beat­ing in re­cent con­sumer sur­veys, and its head of­fice is fac­ing an in­ter­nal mutiny from a fran­chisee group su­ing man­age­ment for a num­ber of al­leged in­frac­tions.

Last week, the fed­eral gov­ern­ment con­firmed it would in­ves­ti­gate fran­chisee al­le­ga­tions that the par­ent com­pany, Brazil’s 3G Cap­i­tal, had breached prom­ises it made under the In­vest­ment Canada Act.

In an email Mon­day, Tim Hor­tons said that it had apol­o­gized to restau­rant own­ers for any in­con­ve­nience re­lated to the dis­tri­bu­tion de­lays and ex­pects the Guelph fa­cil­ity to re­turn to nor­mal ser­vice vol­umes by the end of this week.

A state­ment from the com­pany also said the 45 items at is­sue are “non-es­sen­tial to restau­rant op­er­a­tions.”

Rep­re­sen­ta­tives for the Great White North Fran­chisee As­so­ci­a­tion, a group whose mem­ber­ship in­cludes more than 60 per cent of Tim Hor­tons’ Cana­dian fran­chisees who are un­happy with their head of­fice, had no com­ment Mon­day.

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