Tim Hortons Franchise Costs, Fees & FDD

Year Business Began: 1964

Franchising Since: 1964

U.S. Headquarters: Miami, Florida

Country of Origin: Canada

Estimated Number of Units: 6,045

Franchise Description: Tim Hortons USA Inc. is the franchisor. The franchisor is an indirect subsidiary of Restaurant Brands International Limited Partnership. Franchisees will operate a restaurant specializing in the sale of coffee and other non-alcoholic beverages, baked goods, soups, sandwiches and related products, under the franchisor’s distinctive format and operating system, including the Tim Hortons marks. The Franchise Agreement grants franchisees the right to open one of the following two types of shops:

1. Standard Shop: A standard shop is the typical Tim Hortons shop. It produces, merchandises, and sells a variety of baked goods, such as donuts, cookies, muffins, tarts, as well as coffee and other beverages. Most standard shops also offer a variety of soups, chili, and sandwiches. The standard shop typically ranges in size from 1,000 to 2,300 square feet, contains a seating area for customers, and includes a drive-thru facility. The standard shop may also be a stand-alone, an in-line shop, or a shop within another facility.
   
2. Non-Standard/Kiosk: The versatility of non-standard shops allows them to be installed in almost any type of location or area. Generally, there is one type of a “Non-Standard Shop”, which is a self-service cart. The self-service cart is modular and can be modified to suit the size, location and consumer demand of its location. It can accommodate one or more coffee stations and/or a limited menu.
   

Training Overview: The franchisor will provide an initial training program for up to six of employees, two of which will be at the franchisor’s cost and the remaining will be at the franchisee’s cost. All franchisees and operators must attend and satisfactorily complete the initial training program before they may open their shop. In exceptional circumstances, the franchisor may waive this training for certain franchisees based upon their individual circumstances and experience level. This training is generally approximately five weeks and is held at a certified training facility in Columbus, Ohio or other locations the franchisor selects. During the term of the Franchise Agreement, franchisees or a principal of a partnership or corporate franchisee (or, if they are operating a non-standard shop, they may appoint a designated manager) must attend and complete additional training programs as required by the franchisor at the time(s) and location(s) selected by the franchisor.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that it controls. The franchisor or any affiliate may establish, and/or otherwise license others to establish, at any location other than the shop’s premises, regardless of its geographic proximity to or impact on the shop, other outlets under the same or different Tim Hortons trademarks and/or under the same or different system, including the Tim Hortons system (regardless of whether the outlet may compete with the location).

Obligations and Restrictions: Franchisees must designate a “managing owner” who must have the authority to bind franchisees in their dealings with the franchisor and its affiliates and who can direct any action necessary for their compliance with the Franchise Agreement or any other agreements relating to their shop. Franchisees, or a managing director they designate (and approved by the franchisor), must; (i) operate their shop on a full-time basis; and (ii) reside in the United States at a location no further than 30 miles from the shop or another Tim Hortons shop they operate. Franchisees cannot delegate this responsibility except in very special circumstances and subject to the franchisor’s prior approval. Franchisees must sell only those products and services that have been approved by the franchisor and which have been prepared using the recipes and ingredients it specifies. Franchisees must sell all of the products and services the franchisor requires in the manual or may otherwise specify in writing as being part of the Tim Hortons system. Franchisees are not permitted to sell any product or service that the franchisor has not authorized in writing.

Term of Agreement and Renewal: Typically, all shops have an initial term that begins when the Franchise Agreement is signed by franchisees and the franchisor, and expires 20 years, less one day, after the franchised restaurant opens for business, except for non-standard shops, whose terms can vary depending upon the circumstances but are generally 5-10 years less one day based upon the location of the non-standard shop, menu offering, existence of a drive thru, non-exclusive seating, and other factors. Renewal or extension of the term is not applicable.

Financial Assistance: If franchisees lease/sublease their shop premises location from the franchisor or an affiliate the terms of the lease or sublease will be site-specific. If the franchisor constructs the leasehold improvements and installs all necessary fixtures, furnishings, signs, and equipment, the rent may reflect the cost of leasehold improvements. Except as described, neither the franchisor nor any affiliate offers financing or arranges for financing from other sources. The franchisor does not guarantee a franchisee’s notes, leases, or obligations to third parties.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$25,000	$50,000
Real Estate Taxes, Personal Property Taxes and Common Area Maintenance Charges	$1,000	$70,000
Equipment	$50,000	$410,000
Real Estate	Varies
Planning and Development and Design Costs	$10,000	$100,000
Site Development Costs	$0	$500,000
Building Costs	$10,000	$864,000
Training	$6,000	$50,000
Start-up Supplies and Initial Inventory	$3,500	$30,000
Professional and License Fees	$8,500	$25,000
Insurance	$2,000	$21,500
Security Deposits	$0	$15,000
Additional Funds	$15,000	$42,000
ESTIMATED TOTAL*	$131,000	$2,177,500

*The estimated initial investment range covers from a new non-standard shop up to a new standard shop. Does not include real estate costs.

Other Fees

Type of Fee	Amount
Royalty	4.5% to 6% of gross sales.
Advertising Contributions	4% of gross sales.
Interest and Audit Costs	Costs of audit plus interest.
Additional Training	The materials fee will not exceed $1,000 per person.
Transfer Fee	5% of the full purchase price, up to $25,000 per shop.
Indemnification	Will vary with circumstances.
Taxes	Amount imposed on the franchisor by federal, state, and local tax authorities on any fees or other amounts payable by the franchisee to the franchisor.
Refurbishing Shop	No more than $250,000.
Lease for Franchised Restaurant Premises	Between 7% and 13% of gross sales. Must also pay flow through charges such as common area maintenance, insurance, property taxes, and the franchisor’s administrative expenses of billing.
Reorganization of the Franchisee’s Business	The franchisor’s legal and administrative expenses incurred in processing changes resulting from the reorganization of the franchisee’s business structure, not to exceed $5,000.
Restaurant Technology Charges	$450 to $1,250 per month.
Food Safety Modernization Fee	No more than $100 per year.
Equipment	No more than $250,000.
Tim Horton Children's Foundation	$1,750 per shop.
Background Check Fee, Credit Summary, and Asset Verification (for international applicants)	$5,000 - $15,000

The above information has been compiled from the FDD of Tim Hortons. Year of FDD: 2025.
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