While Tim Hortons has restaurants in Canada and in the United States, most people think of the coffee and doughnut chain as an icon of its home country. It is, after all, named after a hockey player and sponsors a national curling tournament every year. If Timmies isn’t Canadian, then nothing is. Only now the chain’s franchisees say that the new bosses are charging them more for basics, and ending community involvement.
In 2014, the American fast food chain Burger King acquired Tim Hortons, with the new happy couple settling in Canada for tax reasons. The new company, which later made a deal to acquire Popeyes, is called Restaurant Brands International.
While franchisees and corporate are rarely best buddies, Bloomberg News reports that franchisees in Canada haven’t had a smooth transition with the new owners.
The Great White Northern Rebellion
Around half of the company’s Canadian franchisees have formed a coalition to stand up for their rights, and now the group has filed a class action lawsuit against Restaurant Brands. The group claims that the company isn’t keeping its obligations to franchisees, and is hiking the prices that it charges for food and equipment while cutting beloved community programs, like youth hockey sponsorship and local events. Later, around half of American franchisees joined the coalition, too.
The cost increases can be substantial. Tim Hortons restaurants use their own blend of coffee, and under Restaurant Brands, a former franchisee who is now a consultant told Bloomberg that the average restaurant is paying $13,750 more per year just for coffee. That’s passed on to customers, and same-store sales are starting to fall.
“There’s been a lot of change,” the CEO of Restaurant Brands told Bloomberg. “With change comes anxiety and uncertainty.”
Some franchisees report going to Costco to buy commodity items that they don’t have to buy from the corporate overlords at Restaurant Brands International, like plain sugar.