Franchisees have been accused of being wealthy and greedy. Wealth and greed are distinctly different. Wealth is the accumulation of money and possessions over the course of time. A smart, frugal, generous person of limited means can attain considerable wealth over time (and purchase a TH franchise). Nothing wrong with that! Greed is an attitude of the heart. A poor person can be as greedy as a rich person. We read in Luke 21:1-3 Jesus saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. “Truly I tell you,” he said, “this poor widow has put in more than all the others. Desiring to remain profitable is a good, biblical principle, pursuit of great wealth is not.
According to the GWNFA (franchisee association) it will cost $6,968.26 extra per full-time employee, working 40-hours per week.
3. Increase same store sales by $1,021,420 to cover the increased labour costs.
In light of the above, it is profoundly unfair to criticize Tim Hortons franchisees for taking necessary steps to stay in business and protect their investment.
And, obviously, the same difficulties confront all small business owners. It is my personal belief that Canadian unemployment will be back above 7% before the end of the year. We can but watch and see.
If you find any errors in the above numbers please advise and I will amend accordingly.
"Franchise Cost: $480,000 to $510,000* plus all applicable taxes (this includes a drive-thru). Additional Working Capital: (start-up costs) $50,000 (unencumbered). At least $153,000 of the franchise cost must be unencumbered (cash or liquid assets) in addition to the $50,000 working capital that must also be unencumbered. The remaining amount may be financed through various lending programs offered by the chartered banks, providing, of course, the candidate meets the normal borrowing requirements.
The specific cost of a Tim Hortons license will depend upon the Tim Hortons building size and the required furnishings and equipment to be installed. The cost of a Tim Hortons license may exceed $510,000 in certain locations due to higher development costs.
Included in the cost of a franchise is the following:
- All equipment, furniture, display equipment and signage.
- Seven (7) week training program in the Oakville, Ontario, at Tim Hortons University.
- A Restaurant opening crew/Manager of Operations Standards (MOS) to assist the opening of the Tim Hortons Restaurant (for a maximum period of two weeks).
- The use of all Tim Hortons Manuals.
- Right to use trademarks and trade names
- Support from head office personnel who have vast knowledge in the food service
Not included in the cost of the franchise:
- The building (responsibility of the TDL Group)
- The property that the Restaurant is built (responsibility of the TDL Group)
- The term of the License agreement is usually 10 years and usually with options to renew for up to a further period of 10 years.
For mutual success and satisfaction, we must ensure that every Franchisee possesses the necessary skills, commitment level, dedication, work ethic, character and strong people skills. There are a number of qualifications we look for in an applicant such as:
- All partners meet the initial investment requirements and are willing to commit to the Business full time
- Willing to divest of businesses which are direct competition to the Tim Hortons business
- Prior management experience, preferably in food service and/or restaurant operations
- Strong communication skills and leadership qualities
- Keen understanding on how to recruit, train and manage staff
- Solid business acumen
- Two Partners who will be hands-on operators, willing to commit to the demands of the restaurant full time
We consider any proposed partnership and evaluate accordingly. Our goal is to ensure we have the best franchisees in our restaurants, and recommend giving careful consideration to who your potential partner will be as Tim Hortons franchise agreements are typically 10 years in length with an option to renew for an additional 10 years. We evaluate criteria in any partnership such as: time you have known one another, previous business experience together, proven experience working in a non-business setting, and other factors.
On-going payments include:
- A weekly royalty fee of 4.5% of gross sales for the term of the license
- A monthly rental that is the greater of a fixed minimum rent or 8.5% of monthly gross sales
- A monthly advertising levy of 4% of gross sales for the term of the license