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Tim Hortons Franchise Costs $124K – $2.1M (+ 2024 Profits)

Tim Hortons, a staple of the North American quick-service restaurant sector, was founded in 1964 in Hamilton, Ontario by Canadian hockey legend Tim Horton and businessman Ron Joyce. The brand is known for its signature coffee and doughnuts, though its menu has expanded significantly over the years to include a wide range of beverages, baked goods, and quick meals.

Tim Hortons stands out in the competitive fast-food industry through its community-oriented approach, with initiatives like the Tim Hortons Foundation Camps and various national sponsorship programs supporting local communities and sustainable practices.

Tim Hortons began franchising in 1967, and after Horton’s untimely death in 1974, Ron Joyce took full ownership and spearheaded the chain’s aggressive expansion. The franchise now operates as part of Restaurant Brands International and maintains a major presence in North America with thousands of locations. Its headquarters are in Oakville, Ontario, reflecting its deep Canadian roots.

a financial plan for a franchise
a financial plan for a franchise

Initial investment

Type of ExpenditureAmount
Initial Franchise Fee$50,000
Real Estate Taxes, Personal Property Taxes and CAM Charges$5,000 – $70,000
Equipment$300,000 – $410,000
Real EstateSee Note 5
Planning and Development and Design Costs$20,000 – $100,000
Site Development Costs$100,000 – $230,000
Building Costs$440,000 – $745,000
Training$20,000 – $27,000
Start-up Supplies and Initial Inventory$7,000 – $14,000
Professional and License Fees$1,500 – $10,000
Insurance$2,500 – $21,500
Security Deposits$0 – $15,000
Additional Funds$25,000
Total*$971,000 – $1,718,000
* for a Standard Shop: New Mode

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee for a Tim Hortons franchise is $50,000, which is non-refundable.

Royalty Fee

Franchisees are required to pay a royalty fee ranging from 4.5% to 6% of their gross sales.

Marketing/Advertising Fee

A marketing/advertising fee of 4% of gross sales is mandatory for franchisees.

Transfer Fees

Transfer fees are set at 5% of the full purchase price.

revenue

Revenue & Profits

a financial plan for a franchise
a financial plan for a franchise

Franchise pros and cons

The Pros:

  • Third-party financing: the brand has built strong relationships with 3rd party financing institutions to provide funding to its franchisees
  • World-class support: the brand’s 6-decade experience goes into supporting new restaurant owners. The chain offers ongoing support to help franchisees run and manage their businesses. This includes site selection, field operations, online support, security and safety procedures, and lease negotiation
  • Franchise training: the brand offers comprehensive training to help its franchisees launch successful businesses. This begins with a 7-week training program at Oakville’s Tim Hortons University. The training emphasizes food handling, hygiene, equipment maintenance, security systems, and team member relations. Upon completing this training, new restaurant owners get 179 hours of on-the-job training from a full-service Tim Hortons
  • Marketing support: the brand provides its franchisees with detailed and useful marketing support to promote their businesses. To maximize growth and attract potential customers, franchisees get access to regional advertising, national media, email marketing promotions, ad templates, website development, and social media
  • Growth potential: the restaurant chain presents lots of growth opportunities to franchisees looking to tap into the local and international markets

The Cons:

  • No exclusive territory: the brand doesn’t provide exclusive territorial protection to its franchisees. This exposes the franchises to stiff competition from other fast-food chains 
  • No absentee ownership: Tim Hortons doesn’t provide passive investment opportunities. Franchises must be actively involved in the day-to-day running of the business operations 
  • It can’t be run from home or as a mobile unit: franchisees must run the restaurant either from a retail facility (ie no food truck) or an office space if administrative functions are run remotely
  • Can’t be run part-time: Tim Hortons doesn’t offer part-time business opportunities to its franchisees. The brand carefully selects hands-on owners who can commit to running their restaurants on a full-time basis.
  • Competition: Tim Hortons faces stiff competition from other coffee chains: Dunkin’ Donuts, Krispy Kreme or even Cinnabon just to name a few.

How to open a Tim hortons franchise

1. Initial Inquiry and Pre-Qualification

  • Submit an Inquiry: Express your interest through Tim Hortons’ official franchising channel.
  • Complete the Pre-Qualification Questionnaire: Fill out a questionnaire to assess your financial and business qualifications.
  • Financial Requirements: Ensure you meet the financial requirements, including a net worth of $500,000 and unencumbered funds of $100,000.

2. Discovery Call and Background Screening

  • Initial Contact: After your questionnaire is reviewed, if you meet the initial requirements, the franchising team will contact you for a discovery call.
  • Background Checks: Undergo credit and criminal background checks to further assess your suitability.
  • Asset Verification and NDA: Provide verification of your assets and sign a Non-Disclosure Agreement (NDA).

3. Operations Interviews

  • Interview Preparation: Prepare for and complete a business case presentation.
  • Interviews with Operations Representatives: You will have multiple interviews with operations representatives to discuss your business plan and capabilities.

4. Restaurant Experience Days

  • Participate in Experience Days: Spend two days at a Tim Hortons restaurant to understand the day-to-day operations and confirm your interest and suitability.
  • Registration Fee Required: A fee is required to register for these experience days.

5. Senior Leadership Team Interview

  • Interview with Senior Leadership: Interview with a senior leadership team member, such as the Head of Operations or President of Tim Hortons Canada.

6. Final Approval and Training

  • Approval Process: If all previous steps are successfully completed, you will be considered for a franchise opportunity.
  • Mandatory Training: Complete 3-5 weeks of training at Tim Hortons before you can operate your franchise.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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