Tim Hortons is just about everywhere in Canada’s major cities. It’s a successful franchise that has made it outside of Canada into multiple countries around the world. So, if you’re looking to capitalize on that popularity, read on to find out what you need to know about owning a Tim Hortons franchise.
Tim Hortons is one of Canada’s most iconic brands, right up there with activewear brand Lululemon and bag brand Herschel. With this level of status, it’s no surprise that becoming a franchisee is a lucrative and worthwhile business opportunity. But how much does a Tim Hortons franchise cost, and how do you even begin to open a franchise?
The History of Tim Hortons: From Small Town Donut Store to International Chain
Tim Horton wasn’t just the founder of the Tim Hortons quick-service restaurant chain, but one of the greatest defensemen in the National Hockey League (NHL) in the 1950s and 1960s. As a budding entrepreneur, he wanted to start his own business, and thus, opened a coffee and donut shop—the first Tim Hortons location—in Hamilton, Ontario, in 1964.
Who Owns Tim Hortons?
The Tim Hortons chain is currently a subsidiary of Toronto-based company Restaurant Brands International, who also owns Popeyes, Burger King, and other food-related businesses. It was initially founded by Tim Horton and Jim Charade, and passed onto investor Ron Joyce after Horton’s death in 1974.
How Many Tim Hortons in Canada Are There?
Across Canada, there are over 4,000 locations, with over 50% in Ontario. After Ontario, the provinces with the most franchises in order are Quebec, Alberta, and British Columbia.
How Much Does a Tim Hortons Franchise Cost?
The initial investment in a Tim Hortons franchise can vary quite significantly, ranging from $680,900 CAD to $1,906,300 CAD. The number depends on whether you decide to open a standard shop or a kiosk, where standard shops will sell a wide variety of goods and include a seating area and a drive-thru. Meanwhile, kiosks will usually have a smaller menu and only be positioned for drive-thru service and takeout. Costs will also depend on where your franchise is located, whether in a major city like Toronto or in a smaller town.
When you open up a new store, you’ll need to factor in initial setup fees and operating costs such as real estate taxes, restaurant equipment, training fees, initial inventory, and lots more. For example, building costs in a more rural area could cost as low as $13,857, while that in bigger cities could set you back $1,197,253.
How Much Can You Earn From a Tim Hortons Franchise?
Statistically, Tim Hortons is Canada’s fifth-most valuable brand, which means you’ll have a massive and loyal clientele as a franchisee. The average gross sales for a franchise is benchmarked at around $1.16 per location. With a 15% operating profit margin, you could earn $174,000 in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) a year.
Note that there is also a mandatory royalty fee on gross sales of 4.5% to 6% for all franchisees, as well as an advertising and marketing fee of 4% gross sales.
What Does Tim Hortons Offer its Franchisees?
Tim Hortons homes in on its identity as a tight knit community that represents Canada. Franchisees can already benefit from the established branding, commitment to customer experiences, and in-depth operational knowledge that the company has, along with:
- Deep training and access to resources
- Dedicated teams within the business
- Support to secure funding
- A well-developed community of 1,500+ owners
How Do You Become a Tim Hortons Franchise Owner?
Becoming a franchise owner isn’t easy because it requires such a high upfront investment and requires you to have ample knowledge and experience running a business, managing teams, and recruiting and training staff. It’s not a venture that anyone can just start.
- Pre-qualification stage – To see if you qualify to become a franchisee, you’ll have to complete a pre-qualification questionnaire and have the minimum net worth requirement of $500,000. The company also needs you to have $100,000 in readily available liquid assets.
- Discovery call – If you meet the requirements, the franchising team will contact you for a call. Qualified? Your next steps include doing a criminal and credit check and signing an NDA.
- Operations interviews – The interview stage isn’t over just yet, as you’ll need to schedule two or more interviews with Operations Representatives. In one of these interviews, you’ll be tasked with preparing a business case presentation.
- Restaurant experience task – After paying the registration fee, you’ll spend two days at a real Tim Hortons restaurant to gain experience. Note that at this point, you still aren’t officially approved as a franchisee.
- Interview with the senior leadership team – You’ll then speak to a member of Senior Leadership, whether the President of Tim Hortons or the Head of Operations.
- Final approval – If you’ve passed all the steps and interviews, you’ll finally be considered for any franchising opportunities coming up, whether there is a Tim Hortons for sale or if a new location is being considered. In some cases, you can also suggest a new market. Before you can operate your franchise, you’ll also need to complete a seven-week training program at Tim Hortons University to learn the ropes and up to 10 shifts doing on-the-job training.
Other Franchise Opportunities You Can Consider
Tim Hortons has a rich history and reputation in Canada as a native quick-service food franchise, which is why so many Canadian franchisers seek out the opportunity to own one. With this long-standing reputation comes a demand and expenses that not everyone is equipped to meet. That being said, those who are interested in becoming a Tim Hortons franchisee but don’t feel as though they have the qualifications to meet the requirements can consider other food-related businesses for sale.
Whether another large chain or a business with a more local presence, there are a great variety of restaurants, stores, and cafes that may have the franchise fee, investment, and capital that align with your net worth and goals.