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What’s the Exact Cost to Open a Tim Hortons Franchise in 2022?

Tim Hortons franchise is the largest restaurant chain in Canada, with 4,613 locations across nine nations. Coffee, tea, hot and cold beverages, snacks, and doughnuts are all available on the menu. 

tim hortons franchise

Franchises for Hortons restaurants provide fascinating possibilities for building a prosperous company. 

When an entrepreneur purchases a Tim Hortons franchise, they get support from the franchisor, a package of training, advice on how to balance franchise costs and profits, and tried-and-true marketing and management techniques. 

Today, with more than 5,000 outlets across 14 different countries, Tim Hortons is one of North America’s major quick-service restaurant companies. 

What’s the Exact Cost to Open a Tim Hortons 

It costs between $91,800 to $2,086,500 to launch a Tim Hortons site. The franchise cost is in the $25,000–$50,000 range. 

Additionally, a minimum net worth of $1,500,000 and $500,000 in liquid assets are needed. Find out if Tim Hortons is the ideal coffee brand for you by reading through this article. 

Financial Requirements and Fees

Understanding the costs and financial requirements before starting a Tim Hortons site is the first step. 

We’ve provided a summary of the key franchisee expenses that could be important to you as a potential franchisee. 

However, before we begin, allow us to clarify the financial terminology you must comprehend.

  • Liquid capital- refers to the total quantity of cash you will require and should have on hand at all times.
  • Net worth –  is the value of all of your financial and non-financial assets less the value of all of your unpaid liabilities.
  • Total investment – is the overall investment you will have to make in the franchise over time in order to get it up and operating.
  • The franchise fee – refers to the sum that you must pay the franchisor in order to use its resources and trademark.

Fees or Expenses

Financial Amount

Liquid Capital

$500,000

Net Worth

$1,500,000

Total Investment

$91,800 to $2,086,500

Franchise Fee

$25,000 to $50,000

Franchisees have the option of opening a regular shop or a non-standard/kiosk shop. For a non-standard or kiosk store, a franchise cost of $25,000 is needed, but a franchise fee of $50,000 is needed for a larger coffee shop

The highest investment allowed is $2,086,500, with a minimum initial commitment of approximately $91,800.

Cost Breakdown

The components of the expected initial investment are listed below as separate items:

NAME OF FEE

LOW

HIGH

Initial Franchise Fee

$25,000

$50,000

Real Estate Taxes, Personal Property Taxes, and Common Area Maintenance Charges

$1,000

$70,000

Equipment

$18,000

$435,000

Real Estate

Varies

Varies

Planning, Development and Design Costs

$10,000

$100,000

Site Development Costs

$0

$500,000

Building Costs

$10,000

$800,000

Training

$7,000

$15,000

Start-up Supplies and Initial Inventory

$2,300

$30,000

Professional and License Fees

$1,500

$10,000

Insurance

$2,000

$21,500

Security Deposits

$0

$15,000

Additional Funds

$15,000

$40,000

ESTIMATED TOTAL*

$91,800

$2,086,500

A prospective non-standard shop or a regular shop are the two options available to Tim Hortons franchise owners. 

The non-standard/kiosk shop is predicted to cost $91,800, whereas the normal shop is estimated to cost $2,086,500. 

The non-standard store may be a full-service cart or an integrated kiosk. The ordinary shop, on the other hand, can be a standalone location, an in-line location, or a location inside another building.

Other Fees

TYPE OF FEE

AMOUNT/DESCRIPTION

Royalty

4.5% to 6% of gross sales.

Advertising Contributions

4% of gross sales.

Interest and Audit Costs

Cost of audit plus interest.

Additional Training

The price of attending extra training, including travel, hotel, and food costs. The materials charge shall not be more than $1,000.

Transfer Fee

5% of the full purchase price

Indemnification

Will vary with the circumstances

Taxes

Any fees or other sums that a franchisee owes to the franchisor that is imposed on the franchisor by federal, state, and municipal tax authorities.

Maintaining Shop Premises in Good Repair

Varies

Refurbishing Shop

Varies

Lease for Franchised Restaurant Premises

Varies, but it typically ranges from 7% to 8.5% of gross sales for a standard shop and up to 13% of gross sales for non-standard shops and kiosks. additionally be liable to pay flow-through fees including CAM, insurance, property taxes, and franchisor administrative billing costs.

Reorganization of the Franchisee’s Business

Fair legal and administrative costs paid by the franchisor in handling modifications brought on by the restructuring of the franchisee’s corporate structure.

Smart Store Charges

$450 to $1,050 per month

Approved Suppliers Requested by Franchisee

Varies

Inspection Costs and Expenses

Varies

Products, Supplies, Equipment

Varies

Tim Horton Children’s Foundation

Varies

Background Check Fee

$280 – $15,000 

Average Sales / Revenue Per Year

Average Sales / Revenue Per Year

One of the biggest Canadian quick-service restaurant companies, Tim Hortons, has more than 5,000 locations worldwide.

Tim Hortons made $1.88 billion in revenues during the 2020 fiscal year and approximately $1 billion from its properties and franchises. 

Furthermore, QSR Magazine reports that Tim Hortons’ average unit sales in 2016 were $1,044,600.

Tim Hortons Franchise Facts

Total Units:

More than 5,000

Incorporated Name:

Tim Hortons Inc.

Franchising Since:

1964

Industry:

Quick-service restaurants / Fast-food restaurants

Subsector:

Donuts, Coffee, Baked Goods

By the company’s namesake, a legend of the National Hockey League, Tim Hortons was established in 1964. 

Tim Hortons Doughnuts was the name of the company’s first location, which opened in Ontario and solely sold coffee and donuts at the time. 

Eventually, the name was abbreviated to “Tim Horton’s,” and later “Tim Hortons” was adopted without the possessive apostrophe.

Tim Hortons and Wendy’s International, Inc. merged in 1995; the union lasted until 2006. Let’s go to 2014 now. 

A Brazilian business called 3G Capital, well known for owning the well-known fast-food brand Burger King, once again acquired the franchise.

Even though it is owned by a foreign corporation, Tim Hortons is nevertheless a well-known symbol of Canadian culture. 

Today, Restaurant Brands International, the parent company of Burger King and Popeyes, among other well-known QSR brands, owns the restaurant chain. 

Since more than half of Tim Hortons’ outlets are found in this northern nation, I like to say that the chain is practically Canada’s equivalent of Starbucks.

How Much Profit Does a Tim Hortons Franchisee Make Per Year?

Individual franchise owner earnings data is often kept private. However, the average annual income of a Hortons business owner in Ontario was recently discovered to be $265,558. 

That is the revenue from the sale of around 332,000 frozen doughnuts or 170,000 big cups of coffee annually.

The business gave a thorough summary of typical store profit margins from 2002 to 2008 during the legal dispute.

And the outcome? The company has really made money thanks to frozen donuts. Before interest and taxes, the typical Hortons restaurant made nearly $1.5 million over those seven years.

Profits were seen to rise from $174,280 in 2002 to over $265,000 in 2008. The most profitable areas for franchise owners were found in Saskatchewan, Canada. 

In Saskatchewan, the average franchise owner made more than $396,000 in 2008, an increase of 105% from 2002.

Advantages of Franchising Tim Hortons

Before making an investment in a franchise opportunity, many different variables need to be taken into account. 

You should take into account additional crucial elements, such as the availability of training and other characteristics of a franchise brand, in addition to a business’s cost, financial requirements, and profitability. 

Here are a few advantages that having a Tim Hortons outlet has over other businesses.

Established QSR Brand 

It has developed into Canada’s largest quick-service restaurant chain, specializing in consistently fresh coffee, baked goods, and homestyle lunches, thanks to its emphasis on quality, freshness, and community participation.

With $3.07 billion in revenue in 2013, Tim Hortons surpassed Starbucks to become the second-largest coffee company in the world.

Charitable Activities

 Tim Hortons may be the best brand for you if you’re an entrepreneur looking to invest in a business that values conducting charitable and community activities. 

Tim Horton Children’s Foundation and the Timbits Minor Sports Program are just two of the humanitarian endeavors the chain is participating in. In June 1974, the foundation was established in Tim Horton’s honor.

Multiple Funding Sources

Although opening a Tim Hortons franchise requires a sizable investment, the good news is that each franchisee has access to a variety of financial options

It’s critical for investors to evaluate whether a company offers funding sources or financial aid initiatives. 

You may require a reputable financial support program to obtain a low-cost loan if you want to buy a franchise but lack the necessary funds to do so.

Training Support

It’s crucial to pick a franchise company that offers you support. In this regard, Tim Hortons does not disappoint. 

According to the chain’s official website, they will offer training, knowledge of every facet of the business franchise, and built-in assistance for ongoing operations to franchise owners.

Support from Restaurant Brands International

Restaurant Brands International Inc., also known as RBI, is an international holding corporation for fast food. 

Some of the most well-known and recognizable quick-service restaurant brands in the world are owned by corporations, including Popeyes, Burger King, and Tim Hortons. 

For more than 45 years, these independently owned and managed companies have served their individual franchisees. 

You may be more assured that the business will be able to comprehend and adapt to shifting consumer trends with an established umbrella firm like this.

Challenges of Franchising Tim Hortons

Challenges of Franchising Tim Hortons

While having a Tim Hortons franchise has many advantages, there are certain drawbacks to take into account before submitting a franchisee application.

Regional Awareness

Despite the fact that Tim Hortons is a well-known brand worldwide, not all Americans are aware of it. 

Consider the South as an example, where it is difficult to locate a location. In less than two years, the place ceased to exist. 

Even if this is a tried-and-true, expanding global brand, you should still do market research to see if the idea would succeed in your community.

Plastic Pollutant 

Tim Hortons is regularly criticized for a number of issues that pertain to the fast food business in general.

For instance, unlike the majority of other businesses, Tim Hortons does not recycle their coffee cups.

If you are an entrepreneur who dislikes businesses that lack environmental activities, this could be a disadvantage. Look at other quick-serve options if you value recycling and green initiatives.

Previous Lawsuits

Numerous US franchisees of Tim Hortons have filed complaints against the firm, accusing it of engaging in deceptive business practices. 

The Great White North Franchisee Association USA Inc. is a group that essentially speaks for all American Tim Hortons franchisees. 

They claimed that by selling them materials at considerably higher costs, Tim Hortons and its parent company, Restaurant Brands International, had engaged in unfair business practices.

Is the Tim Hortons Franchise Right for You?

Depending on the region, opening a Tim Hortons may require an investment of more than $2 million. 

Whether you should seek a Tim Hortons franchise or not depends on your ability to pay for one and your interest in running a business.

Look within before making an investment to explore and evaluate your experience and interests. 

Do you possess the knowledge and expertise required to run a quick-service restaurant? Tim Horton’s official website states that multi-unit management and other establishments is encouraged but not required. 

Of course, experience is a benefit, but Tim Horton corporate also takes passion for serving customers into account.

Finally, evaluate your level of commitment to running your own business and whether you have a strong desire to lead both your local business community and the community at large. 

Before submitting the franchise application, do a comprehensive self-evaluation and be honest with yourself because Tim Hortons frequently considers these qualifications.

Conclusion

Tim Hortons’ founder passed away in 1964, yet this did not prevent the business from growing for a very long time. 

Ron Joyce, a Canadian billionaire, took over and assisted the business in surpassing McDonald’s as the top quick-service restaurant chain in Canada. The brand value of Tim Hortons is currently estimated at $4.5 billion by Forbes.

Frequently Asked Questions

This cost between $94,000 and $2,162,500 USD to open a Tim Hortons franchise in Canada.

Yes, it is a growing franchise in North America.

Sure, owning a Tim Hortons is profitable.

Tim Hortons owner makes $40,480 per year.

Taco Bell makes the most money.

Yes, you can.

How Much Does it Cost to Open a Tims?

Opening a Tims cost $25,000.

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