INDEPENDENT EDITorIal The old Tim Hortons we all know is just fading away

The ongoing internal feud at Tim Hortons between some franchisees and Restaurant Brands International, Inc. (RBI), Tim Hortons’ parent company, is nothing short of epic.

RBI stormed into the lives of Tim Hortons franchisees in 2014 by way of a multibillion-dollar merger between American fast food restaurant chain Burger King and Canada’s top coffee shop and restaurant chain, Tim Hortons. After it acquired Popeyes in 2017, it became the fifth-largest fast-food operator in the world.

Brazil’s 3G Capital, which focuses on cost management and penny-pinching measures, was behind the deal, along with the famous Warren Buffett.

The group creates value by cutting, restructuring, and leveraging the value out of its supply chain to support global brands. When 3G Capital acquired Tim Hortons, the aim was to do just that and make Tim Hortons a successful global brand.

But early on, ideologies clashed between the old guard and the newly formed company. Franchisees prided themselves on being incredibly community-focused. And they were. Tim Hortons dominated the market by monopolizing hockey rinks, soccer fields, and small-town Canada.

RBI’s series of marketing blunders included several new products on the menu which made little sense. The delayed loyalty program launch, the introduction of meatless products – the disasters just piled on.

But RBI turned the marketing fortunes around and has had a few marketing coups of late: several appropriate seasonal changes to the menu, the incredibly successful “Tim Biebs” campaign, and the launch of highly successful breakfast cereals.

The franchise now has stores in 15 countries, including India and Pakistan. Tim Hortons will have 3,000 stores in China by 2026. The chain currently operates a little over 3,500 stores in Canada. Tim Hortons will have more stores outside of Canada than within Canada in just a few years.

The goal for RBI is this: the parent company wants Tim Hortons to be more like the Burger King franchise structure, which is another RBI division. A Burger King franchise owner will operate 150 restaurants on average, not just two or three. This comes with much less corporate and personal pampering, higher supply chain efficiencies and sound cost-management practices. When most franchise owners operate around 150 restaurants, consensus on these features is easily attained.

Bottom line: when someone purchases a franchise, especially in the food sector, that person is simply buying a sponsored management position within a larger network, which comes with some support and moderate perks. That support will change with different ownership; when ownership changes, franchisees should also expect rules to change. In food franchising, particularly, franchisees are rarely in control, no matter how successful their stores are.

Since Subway is now for sale, store franchisees around the world should take note.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

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