When you think of Canada, some of the iconic items that come to mind include hockey, maple syrup, and Tim Hortons coffee and doughnuts. Many franchisees of the legendary coffee chain, however, feel that corporate management is sucking the Canadian spirit out of their businesses, and have sued Tim Hortons’ parent company, Restaurant Brands International (RBI), in response.
Here’s why: After Burger King acquired Tim Hortons in 2014 to form the conglomerate now known as RBI, corporate bosses began to implement extreme cost-cutting and revenue-inflating efforts despite assurances to owners that everything would be “business as usual.” These measures included raising the price on coffee and other restaurant essentials that owners need to buy and scaling back funding for local community programs that franchises had hosted and run for years.
Workers have been laid off as a result of the new changes, and some owners even source supplies like sugar from Costco because it’s cheaper than what corporate now charges for new ingredients and utensils. The community has also noticed, as the brand has begun to lose it’s nice-guy image as the ability to continue the local neighborhood programs has been lost. Menu prices have also gone up enough to begin to irk Tim Hortons regulars.
As a result, Tim Hortons franchisees that are part of what’s known as the Great White North Coalition sued to prevent further destruction of the community-centered, friendly and low-cost brand image that has been cultivated over the years. While this union represents only half of Canadian owners, nearly half of the 700 U.S. locations have joined in the lawsuit, according to Bloomberg. The lawsuit claims that the money from all of the products sold to owners, which makes up 70 percent of RBI’s revenue, is being funneled towards other interests unrelated to the brand “at the wrongful expense of franchisees.” The coalition of owners is seeking $500 million in damages in this suit.
We’ll have to wait and see if Tim Hortons owners will be able to get their way in court and begin restoring their beloved Canadian personality to their locations.