Supply interruption plagues Tim Hortons franchisees
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 Hor- tons 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.