Operation of the Store

The operation of the store is a very simple one. You only order from a few places, the deliveries vary but usually are week to week. To prepare and organize your staff is also easy and can vary slightly, but once a schedule is set all you need to do is fill the shifts. The preparing of donuts is simple now, all you do is heat them in an oven and apply the glaze, no longer is a baker required. You can control your inventory more closely with this method. The rest of the running of the business is no different from any other, bills come in and you pay them, counting the cash from each shift, filling out some reports, the usual day-to-day operations. All very easy and simple things to do by keeping organized. 

In other words, if you have the knowledge to come up with the capital required to purchase a franchise, you could easily run the business. This isn’t difficult in any way, shape or form. What Tim Hortons likes to do is find people with the capital to open a franchise but people with no business background in the restaurant industry.

Equipped with the knowledge that the pro forma does not hold any value (whether for purchasing or in a court of law) and your business plan gets approved no matter what (by way of comfort letter provided to the bank from Tim Hortons) so in essence you think you are doing your homework but in reality you are being sold something Tim Hortons knows ahead of time that will not make any money.

The business plan is flawed on low volume stores and the profitable high volume stores are already sold or will be sold to friends of the board. Almost all stores in Western Canada are considered low volume stores, and with the planned expansion of 1000 stores in Western Canada this will only erode existing stores and the others are being built in small towns which cannot support the costs of the store to operate. ANY small town getting a store from Manitoba through BC will have multiple failures and many operators going through the stores. *****the only difference maker would be if you owned the property the store was built on. Then you would see the rent from both sides which Tim Hortons profits on. This is a different scenario.*****

When a store being built in Oakbank, Manitoba which has a population of a few thousand and no busy highway nearby, is getting a store built that will pay the exact same rent as a store in downtown Toronto. This is where the business plan is flawed in so many ways. With the court’s ruling that they do not need to tell you the number of failed franchises (or even if the store location you are buying) has been owned multiple times, Tim Hortons is not required to tell you that information. The courts have ruled that all they need to tell you is that the I’s have been doted and the t’s have been crossed then they are good in the eyes of the courts. Even if you were to find out that the location has been sold multiple times they will either say the operators where poor at running the store and could have made money or that they retired from the business. But more than likely you will be looking at an existing store that is currently being run corporately or a new store (1 of the 1000 they plan on building). The new store will have no historic data and they will provide you with the pro forma to make your decision to purchase the store (of which the court of queen’s bench Manitoba letter states the y know nothing of the document) and they are also protected in the courts by the caution line that the sales from store to store vary (yet the rent and what you pay don’t in Oakbank MB vs. downtown Toronto)

******of great note is that the agent representing Tim Hortons (whether he is a VP or an employee selling stores) that they get a cut of the sale of the store. A cautionary line from them would be that this is a very hard business and we turn people away because of the great effort involved in running a store. Seems funny when you hear of owners having multiple franchises because you could never be at all locations at the same time!! They do this as a selling tactic to make you think that you are a successful candidate to purchase a location.**********

  1. Kim
    January 9, 2013 at 7:11 pm

    No business is guaranteed to be profitable…there is a risk involved in business no matter what it is. Also, most western Canadian stores are low volume?….. I think the top 5 grossing Tims are in western Canada.

    • January 9, 2013 at 10:03 pm

      Sorry you must not have read the contract. Site doesn’t state all stores are low volume. If you are not pocketing some serious coin then what would you do when it’s time to sell. Countless owners including myself have recieved $1, in case your not reading that correctly that’s one dollar. Any store can be purchased if you have the money. Lots of stores in Western Canada have operator agreements and are not owned. District Managers are being moved to ‘store owner’ but it is false and only inflates their ‘owner operator’ numbers. Take a look at the pro-forma, does it show any loss?? How many people will purchase a half million dollar business to only have day to day profits as the sole way to make money, and the GUARANTEE that you will get nothing for your store. READ THE BUYBACK clause!!!

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