Tim Horton's - Key - © kavinė Vankuveryje on Wikipedia

Tim’s War with Franchise Owners Escalates

Tim Horton’s head office in Oakville, Ontario, must be humming with Hunter Thompsonesque fear and loathing these days. The company recently declined to renew a franchisee’s operating license after the operator spoke out against head office policies in the ongoing war with its franchisees…

Tim Hortons - Clifton Hill - © cliftonhill.comA typical Tim’s franchise.

Mark Kuziora owns two Toronto area Tm Horton’s franchises – but maybe not for long. Kuziora was informed earlier this month by the head office that his operating license for one of the stores, which is up for renewal this August, will be stripped from him and given to someone else. Basically, he loses the store.

Kuziora is described as an outspoken, unhappy franchisee who’s been protesting the head office’s profit skimming tactics and the alleged misuse of funds intended for brand promotion, among other issues.

Association has his back…

Kuziora and the group which represents about half of Tim’s Canadian franchisees – the Great White North Franchisee’s Association (GWNFA) – call denial of the license renewal an intimidation tactic. Kuzoria is a member of the Board of the GWNFA and well known to the Tim’s head office as an agitator. As you might have guessed, the Association is getting behind Kuzoria in what could be a long, tough, dirty fight with Tim’s head office and Restaurant Brands International (RBI), which took over Tim’s a couple of years ago.

“The management at RBI has no idea how hard we are going to hit back. We will not stand by and let a good franchisee, who cares deeply about his fellow franchisees and the Brand, be railroaded this way,” the GWNFA board said in a statement. “This action is unfair, unethical and a manifestation of the lack of character of RBI management. You cannot trust them. Don’t doubt for one minute that you [may be] next.”

The empire strikes back…

For its part, The Horton’s head office says Kuzoria has no renewal rights under his current deal with the company. But they’ve been negotiating a renewal for months. In a statement to the Canadian Press, RBI added: “We regularly onboard new Restaurant Owners and transition Restaurants as part of our normal course of business activity,”

I didn’t know ‘onboard’ had been declared a verb. Nor do I believe that RBI would ever really dump a good, devoted franchisee just to freshen up the front line. In fact, that’s even more unthinkable in the context of RBI’s core credo, to maximize profits out of its restaurant holdings.

The bottom line…

It is extremely bad, image wise, for both the franchisees and the corporation, to perpetuate the current animosity. Adversarial approaches never resolve any issue. Unless, of course, it’s all-out war. In that case, one side or the other is destroyed. But I just can’t imagine what that would look like in the context of the Tim Horton’s dispute. If the franchisees destroy the head office, that leaves them in the lurch. And, if the head office destroys the franchisees, that leaves it without a money generator. It’s just not wise for RBI to maintain an iron stance, especially in light of the recent drop in corporate popularity, from fourth to fiftieth place…

When will cooler heads prevail?

~ Maggie J.

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