Tim Hortons Franchise Facts

coffee-and-donutsSo we’ve been getting tons of requests lately regarding help in purchasing a franchise. We never realized how many people are interested in getting involved and laying down their hard earned money on a franchise without all the proper knowledge! Yes, you think you are purchasing a proven, perfect system that has been put in place years ago to have you succeed and make lots of money, a fool proof system!! Lets be real for a second, everyone who buys a franchise is doing so to make a financially stable life for their family. You aren’t purchasing one to fail, to not make any money (yes even lose money), and to get into a 10+ year lawsuit and then not be able to move forward in your life!

This site has the questions you need to ask and also the answers you will hear from the very people who are trying to sell you a franchise. We have helped many potential franchisee’s be equipped with information by letting them make use of our decades of knowledge and experience in dealing with Franchisors (on this site it’s Tim Hortons). Instead of just laying the facts out why purchasing a Tim Hortons doesn’t make found financial sense for you and your family, we decided that we should help others out and let them make an informed decision based on real facts and experiences of people who have been involved in the process for nearly all their lives! Anything not covered on this site or questions you have can be answered by contacting us, we want to help!!

Great articles if you are thinking of purchasing a Tim Hortons in the United States, it’s an even worse situation there and we have information from multiple failed owners as well.  (From Macleans Magazine, Canadian Business)

http://www2.macleans.ca/2013/02/20/why-tim-hortons-cant-rrroll-into-the-united-states/   http://www.canadianbusiness.com/companies-and-industries/tim-hortons-sales-slow/

Also a leaked letter to current CEO Paul House who has done a lousy job selling the brand in the USA, interesting letter.

http://www.businesswire.com/news/home/20130501006684/en/Highfields-Capital-Statement-News-Reports-Tim-Hortons

All the knowledge we have gained is from actual experience, not from third parties, not from school, it has been from years of experience. Collecting stories from others who have gone through the same thing. So what we are doing is shutting down the comments section of this site, it will only be used for us to contact you. This site will be focused on helping prospective buyers obtain the information needed when purchasing a Tim Hortons franchise before ever having to make contact with the sales people from Tim Hortons. It will arm you with the facts and questions required and the type of lawyer you need to see. Of course all backed up with documentation, all the real facts presented in a neutral format.

We seriously can’t believe the number of people who have contacted us lately asking for our help, who were willing to invest hundreds of thousands of dollars and didn’t have all the facts!!

Equip yourself with the powerful tool of knowledge and be able to make an informed decision for you and your family. We have found a great need for help, true help with the facts about this industry of Franchising. With all the information available coming from people with the knowledge, background, skill and experience to help steer you clear of all the bullshit involved in purchasing a Franchise….on this particular site, a Tim Hortons Franchise.

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Thinking of Buying a Tim Hortons….what you NEED to know!!!!

March 31, 2013 1 comment

coffee and donut

Add another 2 who changed their mind this week…Now $4,500,000 + saved and kept in families pockets to date….and counting!!! Thinking of purchasing a Tim Hortons? This site has the information you NEED TO KNOW…..it’s about the contract and the fact the pro-forma (break down of sales and profit) is a made up document!! That’s right, the document that shows what you could earn is not factual. One of the reasons why you would make the final decision to purchase a Tim Hortons is that document, that Tim Hortons knows nothing about….a sworn affidavit from the Manitoba Court of Queens bench states this. But did you also know that is not worth anything in the end, yes it is also stated in the contract what the business is worth, which is ZERO in less than 5 years!

Why would you buy a business that you cannot sell, the profits can only come from the day-to-day operations and NOT the resale of the business….yes that’s written in the contract!!

All the hard work and effort to build the business (your goodwill) is owned by Tim Hortons…stated in the contract!!

The value is pre-determined and the only one who can purchase the business in the first 5 years is….you guessed it Tim Hortons!!!

The business is worth less than $ZERO in 5 years…it’s in the contract!

You are buying a job, with great risk, and no ability to sell.

If you own a store and think you can sell or get out, you are so mistaken. Click on the link and watch our Dad undergoing cancer treatment, all he wanted to do was tell our families story….he died and couldn’t get out, and my family is now sharing this information in his honor. http://www.youtube.com/watch?v=Ks-spVpqE9w

This is serious stuff and not some story to be taken lightly. This is happening now across Canada, families are losing their entire life savings. I’m here to help and to make sure this doesn’t continue to happen. If you are a store owner getting default notices or in the process of losing your store, my family can help. We can tell you exactly what to do so you can get your money back. There is only one way to do this, and if you think you can negoitiate with Tim Hortons you will lose everything.

Take the contract to any lawyer but preferrably a contract lawyer (the clauses you need to know about are listed below).

Download the entire Tim Hortons contract… Tim Hortons Contract .pdf in full…this is the entire Agreement.

What about the fact you cannot sell the business or make any money from growing the business. Right in the contract it states;

Article 11 Transferability of Interest

Section 11.01 – Restrictions on Licensee’s Right to Transfer: The Licensee acknowledges that the rights and duties set forth in this Agreement are personal to the Licensee and that the Licensor has granted this license in reliance on the Licensee’s business skill and financial capacity. The Licensee therefore covenants with the licensor as follows:

(a) in the event the licensee wishes to sell, assign, transfer, convey or give away the Tim Hortons Shop business carried on at the Premises pursuant to this Agreement during the first (5) years of the term hereby granted, the Licensee shall do so only by offering to resell the Tim Hortons Shop business to the Licensor at the depreciated value of the furniture, equipment, and signs, and “depreciated value” shall be as herein defined in subparagraph and 12.02(i). The Licensor shall have the option of repurchasing said business in accordance with this subsection within (30) days of receipt of written notice from the Licensee advising it wishes to sell the business. In the event the licensor does not exercise its option to repurchase the business in accordance with this subsection, the Licensee shall have the right to sell the business to a third-party at the purchase price set out in this subsection and in accordance with the terms of Section 11.02;

Tim Hortons is the only one who can purchase the business. No money for building the sales, this will happen to every store owner you see. They do not pay anything for the store. You can contact the site and we have the actual calculation Tim Hortons uses to depreciate the store. In the first year you will lose 25% of the purchase price and by 5 years the business has no value.

Section 11.02 (3)

Notwithstanding any other clause in this agreement to the contrary, the Licensee acknowledges that it is the policy of the Licensor (Tim Hortons) that the profitability of the Tim Horton Shop business should be derived from the day to day operations of the business and not from the resale of the business. The Licensee therefore covenants and agrees that the licensor may arbitrarily withhold its consent to any transfer of this Agreement in whole or in part if it feels that in its sole and absolute discretion the sale or transfer price to be paid by any proposed transferee is such that the proposed transferee will not be maintaining a cash flow consistent with the proforma-stated operating results contained in the Confidential Operating Manual, normalized as considered necessary by the Licensor acting in a reasonable manner, or if such transfer price is not consistent with the then current selling price of a Tim Hortons shop adjusted for the number of years remaining in this Agreement and for the ratio of its sales level to the preceding calendar year’s average store sales level of the “Tim Hortons System”

Section 6.05– Inurement Solely to Licensor: The licensee agrees that all goodwill associated with the “TIM HORTONS SYSTEM” and identified by the Licensor’s Trademarks used in connection therewith shall inure directly and exclusively to the benefit of the licensor and is the property of the Licensor and that upon expiration or termination of the Agreement, no monetary amount shall be assigned as attributable to any goodwill associated with any of the Licensee’s activities in the operation of the Tim Hortons Shop licensed herein,or the Licensee’s use of the Licensor’s Trademarks.

What this means if you own a store, take what Tim Hortons will give you (most store owners paid little to nothing for their stores, some will pay to have the store taken back) as you will not be able to sell. Interesting how it states right in the contract to not expect your profit from the sale of the store. Who would buy a Tim Hortons if you already know before hand that you will receive nothing for it. Stated right in the contract!!

Do you think buying a Tim Hortons is a good decision for your family???

Please comment and tell us what you think.

Categories: Uncategorized

Tim Hortons Franchise Facts

March 19, 2013 1 comment

Investors of Tim Hortons, are you aware of the growing problems and the sheer number of stores that are currently in trouble. Do you knowcoffee-and-donuts what the contract of every franchisee has written in it? You realize that every store is worthless in less than 5 years? These clauses are written in the contract that every store owner signs. The other interesting clause is the one that states all good will (your hard work and effort to build the business and increase the sales) is owned by Tim Hortons…yes that is stated right in the contract!

To see these FACTS (the entire contract is available for download) and many more documents continue viewing the site.

Other interesting facts; Population of Canada over 15: 28 827 932

Number of Tim Hortons: ÷ 3 365

Number of Tim Hortons per consumer: 8566

So that’s 1 Tim Hortons store for every 8566 Canadians. Can you say SATURATION!!!!

Stock Analyst say 4000 is the maximum number of stores that Tim Hortons can put in Canada…..that would be 1 Tim Hortons store for every 7206 Canadians! Have you seen where Tim Hortons is now opening stores? Tim Hortons is putting stores now in small communities across Western Canada with populations less than 5000 people! 

What about the current store owners being asked to renovate their worthless store for over $100,000 when in actuality the cost is nowhere near that. In fact we have the costs from the former head of construction that shows Tim Hortons is pocketing more than half the value of the renovation! We have spoken to the former head of construction and know the store owners are being forced to renovate at these high costs and they have no power to say no as it is also written in the contract….a mandatory renovation, a small one after 5 years and a major one after 10 years. I wonder if any of these owners realize that it states right in the contract that the Tim Hortons business cannot be advertised for sale and that the value is already predeternmined….which is less than zero in 5 years and the only one allowed to purchase the business in the first 5 years is…you guessed it Tim Hortons!!

I states in the contract that the money you earn should come from the-day-to day sales and not the resale of the Tim Hortons business! Who would buy a business knowing they cannot sell it for a profit when they leave, the value is predetermined, and the only way to make money is from thee day-to-day sales. Yes it states that right in the contract!

Do you know what the average ticket is at a Tim Hortons? The average ticket is around $2.00  So in order to generate $1,000,000 (one million) in sales you need 500,000 customers ÷ 364 days (closed Christmas) = 1370 transactions per day. This means you need to take the money, give change, get the order, 1370 times per day…..the store my family owned had a breakeven of over $1.2 million which means that it would lose money having 1370 customers each day.

FACTS, Tim Hortons spins what they want to the media and they accept it as FACT…why are hospital locations losing millions of dollars each year with no solution from Tim Hortons head office yet the taxpayers in Canada are on the hook to cover the loses. We should be hiring nurses and doctors and not covering coffee losses to a publicly traded company….yet Tim Hortons continues to sell them to hospital locations with what promise? The taxpayers will cover the losses!!

Why do Tim Hortons executives say to stock experts that they can continue to grow revenues? As you can see they are tapped out in Canada and now have store owner competing against store owner? How can they compete against Starbucks and McDonald’s like Tim Hortons executives say but they can only expand in Canada, they’re entire marketing and selling is geared towards Canada. McDonald’s and Starbucks are both global players in the coffee game and Tim Hortons doesn’t stand a chance expanding outside of Canada. Tim Hortons have already closed stores in the USA.

Tim Hortons spends 4% of all gross sales on advertising but only cater to the Canadian market plus this 4% never gets returned to the shareholder even though the advertising presence in Canada is ridiculous. If you watch sports the Tim Hortons highlight of the night, every other commercial is a Tim Hortons one (and it’s the same one!), every radio add, newspaper, etc. Sometimes it’s funny to see the same commercial every break during a show. If you’re an investor how come these ACTUAL numbers are not being addressed? They grow revenue by simply building more stores which now have lower sales each year as they compete against other Tim Hortons in the same market, in some cases just across the street!! Does this sound like the “buy” stocks should really be a buy….more like watch out what happens as the truth is out there!! Tim Hortons cannot dispute the FACTS!!

Categories: Uncategorized

Tim Hortons is doing what to the taxpayers?

February 18, 2013 1 comment

A quick calculation before you start reading;Tim-Hortons-300x60 There’s a Tim Horton’s store for every 8 600 people in Canada?   Can you say SATURATED!!

coffeeThe site timhortons-franchise.com  will be up and running by the end of the month that will expose what is truly happening with the taxpayers in Canada and how taxpayers are covering the loses in the hospital locations to which Tim Hortons has no real answers.

This is a very simple business, especially the hospital locations as nothing is done in the store besides serving the product. They have minimal staff to which Tim Hortons blames all the loses on, but in reality if these franchises made the kind of money that Tim Hortons has everyone believe than the wages would be nothing compared to the $1.5 million that is being lost in just a single location (to which the taxpayers are covering). Even if the Tim Hortons business made some money the wages should not matter to the point of losing over a million dollars in a single year!! In the latest court battle that pitted the franchisees against each other and the Tim Hortons corporation it was revealed that low volume stores (mostly Western Canada, small towns, USA) are losing money and high volume stores profits are shrinking. Every lunch menu item is sold at a loss and the judge ruled Tim Hortons can make you sell whatever they want whether you make a profit or not.

If you thought this was the only site referring to Tim Hortons problems you would be mistaken. There are literally hundreds of sites that have issues with this company and this is just another, except this site exposes the issues involved with purchasing a Tim Hortons franchise. Check out some of these other sites ranging from how employees are being treated like second class citizens to how wi-fi never works;  http://ohryan.ca/2008/08/27/5-reasons-tim-hortons-sucks/  / http://www.youtube.com/watch?v=UyVKOuj9cTU  /  http://qmass.wordpress.com/tag/tim-hortons-sucks/  /  http://www.canada.com/topics/technology/story.html?id=db414da4-c72a-4409-b5e6-5a5bfd1875d3   /  http://www.complaintsboard.com/complaints/tim-hortons-c302650.html   This is just a sample of the many sites and to show this isn’t the only site exposing facts regarding Tim Hortons. Check out the threatening letters below that my family has received by exposing this to the public. We are not afraid and we will help as many people as we possibly can.

In essence buying a Tim Hortons franchise is like purchasing a job. If you continue reading the site you will see 3 clauses that constantly get brought up with the most important one being the selling of the business. It states right in the contract that the Tim Hortons business you purchase for $450,000.00 is worth less than ZERO in 5 years. Tim Hortons owns the good will (the effort you put in to build the business) so all you get is the price that is pre-determined in the contract everyone signs. So if you’re not saving all that money or if you’re losing money you will be cutting a cheque to Tim Hortons to leave! You get NOTHING for the Tim Hortons business when it’s time to sell and the only person who can purchase the business in the first 5 years of operation is Tim Hortons. In Winnipeg Judge Joyal ruled that this contract is a simple commercial agreement. An example of that would be just like buying a car, but does it state in the purchase of the car a pre-determined value and who you can and can’t sell it to? No one would ever buy a car under those terms yet people continue to sign the contract (full contract shown below) to purchase a $500,000.00 business that is not worth anything!

Everyone buys a business to run it well and to sell it for a large profit in the end. Not if you own a Tim Hortons!!! Everyone signs the same contract unless your one of the many that get to operate the business and call yourself an “owner” by only signing an operating agreement and perhaps put down a $10,000 deposit, sometimes nothing (these are usually former District Managers). That’s correct, an “owner” just down the street that is competing against you paid nothing for the store (this also inflates actual sold stores).

Most people you know raking in over a $150,000 per year are genuinely happy people who you think would want to pay great staff fair wages. All of the spin Tim Hortons puts out there is because you the consumer are paying for it. 4% of everything that is purchased goes directly into advertising so they can spin anything they want and the media just prints it.

To all Canadian Taxpayers, do you want your hard-earned money spent to pay the debt that Tim Hortons hospital locations lose each year. Its costing us millions to support a company that is publicly traded and earns money for shareholders. It’s time for Tim Hortons to come clean and let the Taxpayers of Canada know what is really going on, that Tim Hortons has no solution to change this. If you are thinking of purchasing a Tim Hortons franchise you can contact us for help and guidance.  If you’re a store owner in trouble we know a way out and can help you get your money back. You can get a hold of us on the contacts page, it will be kept private.

Tim Hortons/Taxpayers

Categories: Uncategorized

Tim Hortons Franchise Lies

December 19, 2012 1 comment

coffee-and-donuts

“The history of our race, and each individual’s experience, are sown thick with evidence that a truth is not hard to kill and that a lie told well is immortal.” Mark Twain

So I’ve been getting asked why I am doing this and what is the purpose behind it. Honestly, this is about how big corporations can do whatever it is they like, with no regards for the law or the consequences to the people involved. This has destroyed a family, broken lifelong friendships, broken spirits and dreams, but the one affecting me the most is the fact I cannot move forward with my life. Tim Hortons is equated to a great Canadian Company, who helps communities and supports charities. Unfortunately this is bought and paid for by the consumer. Tim Hortons cares about their public image and what they associate with it. Take a look at my Dad undergoing chemotherapy treatment for cancer and still being told that none of his family can tell their story and no one is allowed to move forward with their life.

If you are someone interested in purchasing a franchise, contact us….or at the very least take the 2 clauses (section 6.05 and 11.2) that I expose below and show them to your lawyer. You do not need any more information but everything is provided in this site and why you should be very cautious doing business with Tim Hortons. People empowering people with knowledge so you can make an informed decision with your money.

A bit of background; Tim Hortons cut a deal on the first day of trial after blaming my brother for everything that went wrong, yet they defended the decision to release him in order to speed up the trial. Do you think my family cared if the trial was a week shorter after 10 years waiting to get there? No one in my family has spoken to my brother (or his 2 children) since Tim Hortons forced me and my sister to fire him and push him out of the business. How Judge Joyal is qualified to be a Judge presiding over a business lawsuit is beyond comprehension. Judge Joyal ruled that my brother could be freed from trial and he would put a percentage on what his amount would be if a judgment was ruled against us. Judge Joyal has to this day, never given what his percentage was (don’t know what that means for my trial) but my family ran out of money while trying to appeal the decision. Judge Joyal ruled in favor of Tim Hortons and now I have a judgment against me for over $1 million dollars. I can’t pay it, Tim Hortons knows this, but they won’t do anything either accept making me sign a confidentiality agreement, then they will let me be free. Before my father passed I promised I would either get the money they took back or I would tell our families story and show all the documentation to back up the facts. The other insane judgement from Judge Joyal was on day 2 of the trial after releasing my brother, he ruled the documents that state me and my sister had to fire our brother would not be allowed in court as evidence. Judge Joyal ruled these documents not allowed as evidence because they were bargaining an agreement to settle this. How this was allowed is beyond comprehension. So in 2 days of trial, my brother (the main person involved) was let go, free and clear in the trial with our rights do anything against him taken away, and on the second day all the evidence stating to fire my brother, barring me from showing my face in front of the store or answering a phone, was thrown out of trial along with a letter from Tim Hortons legal counsel that the stores in the Winnipeg market do not make money and cannot make money without having concessions (IE no rent, no royalties). In trial they portrayed us a poor store owners, yet click on the letter from the Vice President stating how well our store is run.

joyal

Judge Joyal

They can lie, hide behind the laws, and even more importantly, they had 7 lawyers to my family’s 1 and endless resources. Our lawyer stated to Judge Joyal, “My position my Lord with all due respect to my learned friend, is that I’m being sandbagged and blindsided at the same time, because it is obvious what we are having here is an attempt at a whitewashing, the plaintiff (Tim Hortons) wants to cut my feet out from under me.”  to which Joyal replied, ‘you’re smart Gene, with your years of experience you will figure something out’. Is that not ridiculous for a Judge to say. Read it, it’s right in the transcripts! Read all the documents, the transcripts, the contract, and see that current store owners are in the same boat, with a worthless business they cannot sell (stated right in the contract), what is going to happen to all these franchisees? The truth is here, watch the video of my Dad on You Tube and see how ruthless they are. Tim Hortons spent over $800,000 on lawyers to fight us, more than just giving us our money back. What Tim Hortons wanted to do and continue to do to this day is destroy families, take their money and not let them move forward. It’s been going on for a long time and now all this site does is expose it.  When everything you require is provided by them, then you find out that Tim Hortons does not even have any information on how the pro-forma (break down of sales and how much money you will make) was produced, who made it, what year it was made in, or what geographical location. All of these statements have the documents posted below.

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CEO Paul House

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Frank Iacobucci

Current CEO Paul House knows about the inside details of what happens to franchisees, why have no reporters asked him how on earth does anyone sign the contract to purchase a Tim Hortons Franchise when they get nothing for the business. This is proven in the buyback and transferability of interest clauses (section 11), you can view the entire contract below. Why does no one question why a retired Supreme Court Judge can sit on the board of directors? Frank Iacobucci retired as a Justice of the Supreme Court of Canada. How are decisions in 2 provinces side by side completely different? How does one franchisor lose a case in Quebec (Dunkin’ Donuts) but in the next province over in Ontario the decision is completely reversed for Tim Hortons? Is anyone involved in influencing these completely different decisions? Why is no one questioning how the courts can make completely different decisions with nearly identical cases? Perhaps Tim Hortons could answer these questions as it is impossible to make sense of these decisions that these Judges have made and why are the decisions going against these other franchisors but Tim Hortons can win time and time again?

So you see why I am doing this, they destroyed my family, my Dad has passed away with no conclusion, I am emotionally drained and no longer want to have this happen to another person. I’ve suffered long enough in silence. We tried our best, poured thousands upon thousands into the business, only to be sued, lose at trial, and not being able to move on? I am not afraid like all the others who have had this happen. I am passionate about helping people and only want a better life for anyone I know or see. I want to help anyone who thinks buying a Tim Hortons Franchise is a good idea, give them questions to ask and what they need to know. I want investors in this company to know how the profits are being earned. Margins are incredibly small and Tim Hortons franchisees sell all lunch menu items at a loss, no margins in the frozen donuts, and franchisees can be forced to sell any item at a loss as ruled in the class action decision in Ontario’s Court of Queen’s Bench!! This is not a simple commercial agreement like Judge Joyal ruled here in Manitoba….this makes no sense.

Ask any question or comments, contact us through the comments page. I have nothing to hide, I want to show everything. Tim Hortons wants this shut down, I guess we will see in due time but until then, the information is available to all. Current store owners, if you want out…..contact me. I can guarantee you a way to get your money and to get out!

Tim Hortons; A Look From The Inside

November 24, 2012 4 comments

Test Site moving shortly to www.timmieleaks.com Tim Hortons Court transcripts, Tim Hortons Court of Queen’s Bench Documents, and Affidavits now posted. 

Prior to viewing the site please go to YouTube to view the video of John Zaborniak  http://www.youtube.com/watch?v=Ks-spVpqE9w  to view his final recording of this horrific ordeal with Tim Hortons.  Please comment on You Tube, this site is dedicated to this great man, a loving, caring, compassionate human being that helped everyone he could. He is dearly missed and the inspiration behind this site. John Zaborniak September 1/1930 – October 14/2010

coffee and donut

The essence of due diligence is to provide the information that is needed for the franchisee to make an informed decision about the business investment.  If that information is not available for any reason – or is not sought out – then the ‘angels who fear to tread’ start getting nervous. 

The problem with ‘informed decisions’ is that it relies heavily on objectivity – which is often in short supply with an excited, ready to rock’n’roll, prospective franchisee.  Sometimes ‘don’t do it’ is the best, and only, advice you can give that cuts through.”  -By Simon Young
 

After careful consideration upon receiving a letter from the lawyers at Tim Hortons we have decided to take a different route to expose the truth of what is happening to Franchisees and the resulting court cases that have happened. To the average Joe, what do spread sheets of financials really mean?? Most ordinary people see a bunch of numbers and don’t understand or care what they mean. What we want to do here is make it as cheap as possible to help anyone interested in purchasing a Tim Hortons franchise to get the real truth and obtain the proper information and questions that need to be asked. The post below will be the easiest and cheapest way to conclude whether the purchase of a Tim Hortons franchise is the right one for you and your family with everything in .pdf to view.

If you pass all stages of the initial offer to purchase a Tim Hortons Franchise and receive the pro-forma (breakdown of sales) and the contract, take the contract to a contract lawyer (if possible) or regular lawyer and point out the clauses in the post below (can’t sell the store, depreciated at 20% per year, no goodwill paid, all right in the contract). We can supply additional information, court documents and court transcripts that back up the facts of how Tim Hortons operates once you sign the contract and what they can do.

Promissory notes, Gag Orders, Bullying, this is what in fact is happening and the documents show it. What this site will do is provide information to shareholders, potential franchisees, current franchisees,  and individuals who seek the truth about big business and Tim Hortons.

We wanted to show the documents and the truth but received yet again another letter stating what Tim Hortons will do to my family if we proceed in letting the truth out. We do not want to jeopardize our freedom anymore but we also must not be afraid to help and warn others. The 2 paragraphs below dictate why my family cannot move forward in our lives;

 The "letter"

So essentially Tim Hortons has prevented anyone from moving forward. Should one day I generate a large amount of cash, Tim Hortons can decide at anytime to enforce the judgement against us. We cannot move forward so we must let the truth out! Tim Hortons has decided to not release my family from the contract, even though the lawsuit is over, everything is done…..we cannot move forward so they left us no choice but to expose the documents to help others make an informed decision on their business purchase and not just a bunch of Lies from Tim Hortons. remember the person selling you the store is getting a large chunk of the purchase. It is Tim Hortons job to prey on your excitement and to assure you nothing bad will happen. Take a look around the site and ask yourself if this is a company you would like to be apart of?? Tim Hortons thinks the truth can be hidden behind confidentiality agreements and gag orders, but in this day and age of social media….that will not be the case.

Coaching a potential franchisee of Tim Hortons

November 16, 2012 3 comments

coffeeWhether or not you believe that this is actually going on at Tim Hortons, the undeniable truth from the court documents, the contract, and the transcripts speak for themselves. If we can help anyone make a more informed decision then we have achieved our goal. All you need to do is ask the question to see actual financials and tax records or if Tim Hortons is trying to sell you a new store, ask how the pro-forma was prepared, is it from actual stores, what year was it produced, what geographical location, and who made the document. If they can’t (and they won’t) answer any of those questions and provide that information to you, then I think you can take what is written here for the truth. 

Because of the clause in the contract where you cannot sell the franchise and must make the profit from day-to-day sales, then essentially you are buying yourself a job, a very expensive job where you pay Tim Hortons to work for them and then Tim Hortons can control you.  Is this not essentially slave labor?  Labor for no money.  You would be better off being an employee and getting a paycheck than an owner and having to put your hard-earned money in every month to pay the bills.

If anything, take the contract to any lawyer (preferably a contract lawyer) and ask about the clauses below, included is the full contract in pdf;

Tim Hortons Contract.pdf (in full)…takes some time to load as this is the entire agreement.

Also check out clauses; 13.01 (a), 15.00 (a), 16.13 (b)

 What about the fact you cannot sell the business or make any money from growing the business (goodwill). Right in the contract it states;

Article 11 Transferability of Interest

Section 11.01

Restrictions on Licensee’s Right to Transfer: The Licensee acknowledges that the rights and duties set forth in this Agreement are personal to the Licensee and that the Licensor has granted this license in reliance on the Licensee’s business skill and financial capacity. The Licensee therefore covenants with the licensor as follows: 

(a) in the event the licensee wishes to sell, assign, transfer, convey or give away the Tim Hortons Shop business carried on at the Premises pursuant to this Agreement during the first (5) years of the term hereby granted, the Licensee shall do so only by offering to resell the Tim Hortons Shop business to the Licensor at the depreciated value of the furniture, equipment, and signs, and “depreciated value” shall be as herein defined in subparagraph and 12.02(i). The Licensor shall have the option of repurchasing said business in accordance with this subsection within (30) days of receipt of written notice from the Licensee advising it wishes to sell the business. In the event the licensor does not exercise its option to repurchase the business in accordance with this subsection, the Licensee shall have the right to sell the business to a third-party at the purchase price set out in this subsection and in accordance with the terms of Section 11.02;

Tim Hortons is the only one who can purchase the business. No money for building the sales, this will happen to every store owner you see. They do not pay anything for the store. You can contact the site and we have the actual calculation Tim Hortons uses to depreciate the store. In the first year you will lose 1/3 of the purchase price and by 5 years the business has no value.

Buyback .pdf letter from Tim Hortons.

Section 11.02 (3)

Notwithstanding any other clause in this agreement to the contrary, the Licensee acknowledges that it is the policy of the Licensor (Tim Hortons) that the profitability of the Tim Horton Shop business should be derived from the day to day operations of the business and not from the resale of the business. The Licensee therefore covenants and agrees that the licensor may arbitrarily withhold its consent to any transfer of this Agreement in whole or in part if it feels that in its sole and absolute discretion the sale or transfer price to be paid by any proposed transferee is such that the proposed transferee will not be maintaining a cash flow consistent with the proforma-stated operating results contained in the Confidential Operating Manual, normalized as considered necessary by the Licensor acting in a reasonable manner, or if such transfer price is not consistent with the then current selling price of a Tim Hortons shop adjusted for the number of years remaining in this Agreement and for the ratio of its sales level to the preceding calendar year’s average store sales level of the “Tim Hortons System”

Section 6.05-

Inurement Solely to Licensor: The licensee agrees that all goodwill associated with the “TIM HORTONS SYSTEM” and identified by the Licensor’s Trademarks used in connection therewith shall inure directly and exclusively to the benefit of the licensor and is the property of the Licensor and that upon expiration or termination of the Agreement, no monetary amount shall be assigned as attributable to any goodwill associated with any of the Licensee’s activities in the operation of the Tim Hortons Shop licensed herein,or the Licensee’s use of the Licensor’s Trademarks.

All potential franchisees must sign this Independent Legal and Financial Letter .pdf  This was taken to a lawyer and fully gone over. The lawyer commented that this is a standard contract that everyone signs. The lawyer did not tell us that the business could not be sold, that no money is paid for goodwill. Tim Hortons will rely on this document in court.

What this means if you own a store, take what Tim Hortons will give you (store owners paid little to nothing for their stores, some will pay to have the store taken back, some paid $1, yes one dollar, and some cut a check just to leave!no goodwill, you will not be able to sell. It is depreciated at 20% per year (worth ZERO after 5 years…right in the contract). Interesting how it states right in the contract to not expect your profit from the sale of the store. Who would buy a Tim Hortons if you already know before hand that you will receive nothing for the Tim Hortons franchise. Stated right in the contract!!

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