Tim Hortons Franchise FDD, Profits, Costs & Fees (2024)
Tim Hortons, founded in 1964 in Hamilton, Ontario, by hockey legend Tim Horton and Ron Joyce, is a staple in North American quick-service restaurants. Famous for its coffee and doughnuts, the menu has since expanded to include a variety of beverages, baked goods, and quick meals.
The franchise stands out with its community focus, including initiatives like Tim Hortons Foundation Camps and national sponsorship programs that support local communities and sustainability.
Tim Hortons began franchising in 1967. After Tim Horton’s death in 1974, Ron Joyce led the chain’s rapid expansion. Now part of Restaurant Brands International, Tim Hortons has thousands of locations across North America. Its headquarters in Oakville, Ontario, reflects its strong Canadian roots.
Key Franchise Stats
Tim Hortons
Number of units: 642 franchises
Initial investment: $124,000 - $2,138,000
Average revenue (AUV): $1,157,000
Initial Investment
It costs on average between $124,000 – $2,138,000 to start a Tim Hortons franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location and whether the franchisee chooses to lease or purchase the property. Indeed, Tim Hortons offers 4 types of franchises:
| Shop Type | Initial Investment Range |
|---|---|
| Standard Shop: Within Petro | $236,500 – $835,500 |
| Standard Shop: New Model | $971,000 – $1,717,500 |
| Standard Shop: Other | $1,001,000 – $2,137,500 |
| Non-Standard Shop | $124,000 – $396,800 |
We are summarizing below the main costs associated with opening a Standard Tim Hortons Shop: New Model franchise.
For more information on the various types of franchises and its costs, refer to the Franchise Disclosure Document (Item 7).
Standard Tim Hortons Shop: New Model
| Type of Expenditure | Amount Range |
|---|---|
| Initial Franchise Fee | $50,000 – $50,000 |
| Real Estate Taxes, Personal Property Taxes, and CAM Charges | $5,000 – $70,000 |
| Equipment | $300,000 – $410,000 |
| 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 – $25,000 |
| TOTAL | $971,000 – $1,717,500 |
Average Revenue (AUV)
A Tim Hortons franchised restaurant makes on average $1,157,000 in revenue (AUV) per year.
Here is the extract from the FDD showing how much revenue Tim Hortons franchised New Model Shops made on average in 2023 (monthly sales):
This compares to $1,812,000 yearly revenue for similar restaurant breakfast-style restaurant franchises. For example, below are 10 Tim Hortons competitors:
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Tim Hortons Franchise Disclosure Document
Frequently Asked Questions
How many Tim Hortons locations are there?
As of the latest data, Tim Hortons operates around 5,400 locations globally. The majority of these are in Canada, where over 4,000 of its stores are based. The brand has also expanded internationally, with locations in the United States and countries like China, India, and others.
What is the total investment required to open a Tim Hortons franchise?
The total investment required to open a Tim Hortons franchise ranges from $971,000 – $1,717,500 for the Standard Shop: New Model.
What are the ongoing fees for a Tim Hortons franchise?
Tim Hortons franchisees are required to pay a 4.5% to 6% royalty fee on gross sales. Additionally, there is a mandatory advertising and marketing service fee of 4% of gross sales, which includes contributions towards national and regional advertising efforts.
What are the financial requirements to become a Tim Hortons franchisee?
To qualify as a Tim Hortons franchisee, you need a minimum net worth of $1.5 million and at least $500,000 in liquid assets. These financial requirements ensure that franchisees have the resources necessary to successfully operate their business
How much can a Tim Hortons franchise owner expect to earn?
The average gross sales for a Tim Hortons franchise are approximately $1.16 million per location. Assuming a 15% operating profit margin, $1.16 million yearly revenue can result in $174,000 EBITDA annually.
Whilst EBITDA does not necessarily represent the owner’s pay, it can serve as a proxy for how much the owner can pay herself/himself as dividends.
Who owns Tim Hortons?
Tim Hortons is owned by Restaurant Brands International (RBI), a multinational fast-food holding company. RBI was formed in 2014 after a merger between Tim Hortons and Burger King, with 3G Capital, a Brazilian-American investment firm, holding a significant stake in RBI. The company also owns other major brands, including Burger King and Popeyes.
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