Contract Page

If anything, take the contract to any lawyer and ask about this clause below; 

Tim Hortons Contract pdf in full….takes some time to load as 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 1/3 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) or 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!!

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  1. Jeff H.
    November 24, 2012 at 7:34 pm

    Really?? Next time I talk to a store owner I want to ask him this question!!

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