Tim’s Franchisee War Escalates…

The ongoing dispute between Tim Horton’s Canada franchisees and their head office – now owned and run by Restaurant Brands International – got a fair bit nastier this week as franchisees cut employee benefits to maintain already slim profit margins, and politicians slammed franchisees…

Tim Hortons - Clifton Hill - © cliftonhill.comA big, prosperous-looking Tim Horton’s store in Eastern Ontario. Not as great
an opportunity for an franchisee as it once was…

Horton’s customers are making their views known in the ongoing war between franchisees and Tim’s owner RBI. A meme has started circulation online asking Tim’s fans to go Tim-less on Tuesdays in protest of the whole thing. Consumers have a direct interest in the mess as franchisees want to raise menu prices across the chain while RBI says ‘No’. At least for now. In the end, there may be no other choice. But RBI seems to remain solely focused on head office profits, and cares little about the trials and tribulations – and profits – of franchisees.

A bitter dispute…

First, there was the news that some Horton’s franchise owners were cutting employee benefits like paid breaks, free beverages and other perks to help draw a line on plunging profit margins. Profits are declining alarmingly, the franchisees claim, since Restaurant Brands International (RBI) took over as owner of Tim’s Canada and started slashing jobs and head office supports for franchisees.

Tim’s franchisees first formed a business group and quickly thereafter filed a class action lawsuit against RBI. Now, some are taking drastic action to try and stay profitable, and some observers are calling them bullies.

Our clued-out Premier wades in…

Yes, folks, Kathleen Wynne, Premier of Ontario, called a franchisee family in Cobourg, Ontario, Bullies and demeaned them for trying to preserve their business. Timing suggests that Wynne assumed he move by the franchisees was in response to pressure from the new $14 minimum wage that came into effect January 1. But I think – based on long observation of Wynne both as a politician and a person – that she may have been blithely unaware of the pre-existing problems between Tim’s franchisees and their head office masters.

Perhaps worse, from the popular perspective and damage to Wynne’s brand, is that the franchisee family she slagged off for cutting employee benefits was none other than that of Tim Horton’s daughter, Jerri-Lynne, and her husband Ron Joyce Jr., the son of the business genius who made Tim’s the icon it is – or was, until the sale to RBI.

What’s next?

It seems RBI has ordered its franchisees not to talk to the media. Where does that leave the franchisees’ association? They don’t care. In fact, the association told CBC that it had hoped RBI, “would lend support to the franchisees in the chain by lowering food and paper costs, reducing couponing and raising menu board prices to help offset these significant increased costs at store level. While other competitors have received concessions from their franchisors, unfortunately our chain has not. Many of our store owners are left no alternative but to implement cost-saving measures in order to survive.”

The Joyces have said only that they won’t comment publicly, in light of RBI’s threats.

On the horizon: The progress of the (C)$500 million class action suit and further moves – as yet unknown – by RBI and the Association.

~ Maggie J.

Posted under: Comfort Food, Food News

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