Franchisees question whether Tim Hortons has raised the prices for goods restaurant owners must purchase from the coffee chain more than is necessary during this period of inflation
A new fight is brewing between Tim Hortons and franchisees, as some restaurant owners say their profits are being squeezed by rising food and supply costs. The rising tension at the Canadian coffee chain is another stark example of conflicts in the food sector stoked by a surge in the rate of inflation.
The franchisees’ complaints hang on a question that has become more urgent over the past year: who should absorb the effects of inflation, as the cost of basic goods has soared? The Alliance says that Tim Hortons has raised prices for items including food and paper products, the majority of which franchisees are required to buy from the company. Meanwhile, menu prices – which Tim Hortons also dictates to restaurants – have risen slightly, but not enough to cover those rising costs. Mr.
Mr. Lush says the group is also concerned about an increase the company imposed last year to the contributions franchisees must make to its advertising fund – an additional cost that restaurant owners say is ill-timed with concerns around inflation and. Mr. Oliveira responded that an ad fund contribution of four per cent of sales is part of franchisee agreements, and that there was a temporary decrease to the ad fund contributions to 3.5 per cent, which ended last year.
Restaurant Brands settled two lawsuits with the franchisees in 2019, after a public dispute during which the parent company issued notices to the group’s board members – who were also franchisees – over alleged breaches of its media and brand protection policies. A former president of the alliance had his franchise license revoked.
The franchisee group’s board of directors has also been replaced over the past year, with all of its members now made up of franchisees: board president Ron Fox, former association president Mark Walker, Louise Harshman, Daniel Martel and Jeri Horton-Joyce now sit on the board.
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