Some Tim Hortons franchisees have not been happy with the relationship between them and their franchisor since the coffee franchise’s 2014 sale. Feeling the existing franchise internal advisory board had “proven ineffective,” a group of Canadian franchisees formed the Great White North Franchisee Association (GWNFA) in early 2017 to mediate issues it feels have been “adversely affected” by Restaurant Brands International (RBI) management (the company formed by the merger with Burger King).
In a statement, GWNFA executive director Terrance Connoy said, “For over 50 years, the success of Tim Hortons in Canada has been driven by the hard work, passion, and deep community engagement of its franchisees. The GWNFA was formed to ensure this hard work and the iconic Tim Hortons brand is not further compromised under this new ownership.”
Money is at the heart of the strife. According to Nation’s Restaurant News, “lack of transparency” in the use of operators’ ad fund contributions and the “virtual elimination” of local advertising and support are among the grievances towards the franchisor the organization has aired. “Abusive exploitation of its procurement powers” to take franchisees’ profits, subjective performance metrics and “intimidation of franchisees and their employees” have also been alleged.
For months, the disagreement, at least publicly, was confined to Canada. However, now the tension has extended to Tim Hortons’ U.S. franchisees.
In June, the GWNFA hired well-known franchise attorneys Robert Zarco and Robert Einhorn to represent an association of U.S. Tim Hortons franchisees. Einhorn has gone on the record echoing Connoy’s sentiments about how the franchisees he and Zarco represent feel new management has had an adverse effect on the financial dealings Tim Hortons has with them.
“The long-term success of franchise systems like Tim Hortons depends on trust in the franchisor and a fair and equitable distribution of profits,” Einhorn said in a statement. He continued, “Since taking ownership, trust in RBI has disintegrated, and it has aggressively imposed changes to the system without consultation and with contempt for the financial well-being of franchisees on the front line.”
In response to the allegations, Tim Hortons has said: “Our franchise owners are the foundation of our system, and we have always and will continue to seek their counsel and work in close collaboration with them to deliver a great guest experience every day across our restaurants in the U.S. As always, we are committed to continued collaboration with our franchise advisory board, the members of which are elected by our franchise owners, to ensure that the Tim Hortons brand is healthy for the long run by focusing on what will help us serve our guests and the iconic Tim Hortons brand, now and in the future.”
Hopefully the parties can reach a resolution in the near future. In the meantime, here are 5 lessons other franchisees can take from the impasse these Tim Hortons franchisees are having with their franchisor.