Tim Hortons Franchise – What’s Involved?

14/09/2018 08:00 | Start a business

Tim Hortons franchise

If you've ever visited Canada, chances are you've seen or tried a Tim Hortons coffee. As the iconic franchise expands its operations in the UK, we thought it would be a good idea to take a look at what makes the business unique and why it might be a good investment opportunity.

 

Tim hortons franchise UK

Often considered a Canadian national institution and inextricably associated with the coffee culture in its home country, Tim Hortons is a coffee and doughnuts franchise with a lot of history. Founded in 1964 by ice hockey legend Tim Horton, the business sold doughnuts and coffee for 10¢ and quickly built a large local following. By 1967, the company had its first franchisee, and ten years later the franchise had grown enough to expand into francophone Quebec. In 1984, Tim Hortons jumped across the border and opened its first US location in Tonawanda, NY.

By the early 1990s, Tim Hortons had 500 restaurants in operation. However, this was a decade of significant growth for the business and, having merged with Wendy's International Inc. along the way, the franchise opened its 1000th restaurant in 1995. For Tim Hortons businesses, the 1980s and ‘90s were a time of innovation and change, with new products and promotional campaigns being introduced on a regular basis. These included pastries, bagels, flavoured lattes, sandwiches, soups, chilli, and the famous “roll up your rim to win” competition. At the turn of the millennium, Tim Hortons opened its 2000th restaurant. In 2014, it celebrated its 50th birthday and was acquired by Burger King and 3G Capital, who merged to form Restaurant Brands International.

In 2017, the Tim Hortons franchise made the journey across the Atlantic and opened its first UK restaurant in Glasgow. Today, the business has 17 restaurants across England, Scotland, Wales, and Northern Ireland and is actively looking for individuals to facilitate further expansion.

Industry Context

Though Tim Hortons has long been established as the dominant force on the Canadian coffee scene, it's relatively unknown in the UK. The business faces stiff competition from many other established chains and franchises. While the high street coffee market is dominated by companies like Costa, Starbucks, and Café Nero, smaller, independent cafes are also thriving by offering a higher-quality, "artisan" product.

However, Tim Hortons does boast several unique qualities that may help set it apart from the competition. Its long history means that it can make use of a great deal of experience and industry expertise, while its parent company – Restaurant Brands International – can provide it with the financial clout necessary to expand. The franchise isn't afraid to innovate, either. The introduction of new products and the refinement of certain services, such as the drive-thru coffee experience, has ensured it has developed a strong and loyal UK customer base.

Tim Hortons basics

The franchise specialises in serving high-quality coffees in a wide variety of styles, shapes, and sizes. Though it initially focused its food menu on doughnuts, the modern menu is extensive and diverse. A profitable breakfast menu is supplemented by sandwiches, toasties, muffins, and bagels. The ever-popular doughnuts are still present, alongside a Canadian favourite, the Timbit – a small sphere of fried dough marketed as representing the missing dough from the centre of a doughnut. In some respects, this focus on coffee and fresh food makes Pret a Manger the franchise’s most similar competitor.

As one of the most iconic companies in Canada, Tim Hortons can rely on a vast amount of cultural capital in its home country. That this will translate to the UK market is highly doubtful. However, if the franchise can offer a unique experience, provide customers with high-quality, affordable foodstuffs, and carve a niche for itself, there's every chance that it will be successful here.

Tim Hortons franchise cost

Currently, there is little information as to how much a UK franchise unit will cost. However, in the US, applicants must have a net worth of $1.5 million and at least $500,000 in liquid assets to qualify for a franchise. This is likely to be a great deal more substantial than the financial requirements required for UK ownership, as the brand is much more established in the US and therefore contributes greater value to the business. Typically, franchise agreements are signed for a 20-year term, at a typical franchise fee of $35,000. Again, this figure indicates what UK-based franchisees can expect but is likely to be more than UK franchisees will actually pay.

What do franchisees get in return for their investment?

In return for your investment, franchisees are granted the rights to trade under the Tim Hortons name and utilise its brand and trademarks. You'll also be offered access to a world-class support system that guides the franchisee through the setup process and helps you grow and develop your business. This includes assistance when selecting a location, fitting the restaurant, and preparing for launch. On-going support is also provided, and the central franchisor team has a strong reputation for efficiency and helping franchisees cut costs.

What kind of franchisee is Tim Hortons looking for?

Tim Hortons is looking for franchisees with previous management experience, particularly in the food service and restaurant industry. Candidates will also need to be able communicators and display an aptitude for staff management. A basic understanding of business and financial processes and procedure is also useful, as are leadership qualities.

Finally, all applicants must meet the financial qualifications and be willing to declare and divest of any businesses or commercial interest that could be perceived to compete with the Tim Hortons franchise.

Tim Hortons in the UK is an exciting proposition. Its long Canadian history ensures that it has the experience necessary to deliver a high-quality product, though it may struggle to establish itself in a competitive market. However, for franchisees who get in early, the business could prove an excellent investment. The 17 existing stores are thriving, and more are due to be opened. This suggests that a small franchise network is sustainable at the very least.

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