How Much Does a Tim Horton’s Franchise Cost?

First Coffee & Donuts – Now, A World of Food Items
The Tim Horton’s franchise chain began with a single location in Hamilton, Ontario [Canada] in 1964.  The restaurant was named after one of its ownership partners, National Hockey league star Tim Horton.  Tim Horton’s franchises originally sold only coffee and donuts, growing especially popular with its Canadian clientele after developing two specialty donuts, the Apple Fritter and the Dutchie.  Items were continually added to the menu throughout the 1970s and 1980s – mostly treats but eventually soups and sandwiches.  Even after Horton lost his life in a car accident in 1974, the franchise continued to grow exponentially under his name.  Franchises were eventually opened in the United States as well as across Canada.

Tim Horton’s Franchise Review
There are more than 350 Tim Horton’s franchise locations in the United States, plus more than 2,750 stores in Canada.  The company’s Canadian operation is said to be more than 95 percent franchise-owned, with a similar goal in mind for operations south of the border.  In 1995, Tim Horton’s merged with Wendy’s International Inc., which is what helped spur growth in the United States.  Nearly every U.S. Tim Horton’s franchisee is located east of the Mississippi, primarily in New York, Ohio, Pennsylvania, Massachusetts, and Michigan.  The company has shown strong growth over recent years.  The most current corporate figures (Q1 2009) show sales of $507 million, which is a 10 percent increase over the same period in 2008.   Same-store sales grew at 3.4 percent in Canada and 3.2 percent in the United States.  Twenty-eight new franchises opened in the first quarter of 2009, with 20 of them in Canada.

Tim Horton’s Franchise Information & Costs
The initial franchise fee for a Tim Horton’s franchise for sale is $35,000, and one’s total investment should expect to range from between $400,000 and $675,000.  The franchise agreement states that at the franchisee must come to the table with a minimum of $144,000 in unencumbered funds, plus an additional $50,000 in operating capital must also be unencumbered.  Part of the Tim Horton’s franchise information includes details on a Franchise Incentive Program, which provides short-term financing of equipment, store fixtures, furniture and indoor signage that gives franchise buyers a financial break.  First, the franchisee commits a $20,000 down payment, with the remainder placed on a promissory note.  For the first 24 months of operations, royalty payments are reduced from 4.5 percent to 2.5 percent of gross sales, and rent is cut by one-half percent (from 8.5 to 8.0).  Then, at the end of the 24-month period, the note is due and payable.  The expectation is that the franchise owner will set aside the money saved by the two trice cuts and use that accumulated nest egg to pay off the note.  There is an additional advertising fee of four percent, but this remains the same throughout the life of the franchise agreement.  A franchise agreement is typically in force for ten years, with an option to renew for an additional ten years.  Franchisees do not receive a guarantee of territory exclusivity, but the parent company goes to great lengths to ensure that any new operation in the area will not affect sales at existing franchise locations.

Training Is Extensive
The Tim Horton’s Training Centre in Oakville, Ontario, is the place where franchisees learn how to operate their business.  Every new owner to buy a Tim Horton’s franchise undergoes eight weeks of training there, and the facility includes classrooms plus a fully operational store.  There is special emphasis placed on proper food-handling and hygiene processes, plus maintenance of store equipment and employee relations.  Once a franchisee has graduated from this program and is ready to open for business, the corporate office sends along a store-opening crew who remain on hand for a maximum of two weeks.

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3 Responses to “How Much Does a Tim Horton’s Franchise Cost?”

  1. Donna Branson Says:

    If you are looking at going into business for yourself, and got the capital available, a franchise will most often be the most ideal solution for exploring your business ambitions and aspirations while getting expert guidance on all levels along the way. Although it still isn’t a 100% guarantee of success, the franchise route is definitely one of the safest options towards ensuring some medium of success.

  2. GM Choudhary Says:

    I like to need full info about Tm Horton Coffee store please … ?

  3. Refaat Says:

    I am hard working, honest and have high working ethics. I am also committed to the success of Tim Horton’s in Texas.

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