A bitter court battle is spilling intimate secrets about Tim Hortons’ hefty profits.
Michael Friscolanti at MACLEANS.CA reports that last year, customers spent more than $5 billion at Tim Hortons. Five billion dollars. That’s $13.7 million worth of coffee and doughnuts per day. Which, in theory, should leave everyone—head office, shareholders and individual franchisees—with plenty of proﬁt to go around. (Don Schroeder, recently fired as Tim’s CEO, pocketed $5.7 million just for walking away and keeping quiet.)
But not everyone agrees with how the pot is divvied up. Arch and Anne Jollymore, both long-time Hortons franchisees, were in a Toronto courtroom last week hoping to certify a hefty class-action lawsuit against the iconic company, arguing that Tim’s historic shift to frozen doughnuts nearly a decade ago has taken a huge bite out of their cash registers—while providing head office with “spectacular” returns. Their legal briefs are complex (the court file is tens of thousands of pages) but the couple’s claim boils down to this: Hortons “forced” franchisees to scrap their deep fryers, then sold them frozen fritters and crullers for triple the cost of the scratch-baked versions.
Three years after the lawsuit was filed, a judge will soon decide whether the action should be sent to trial or tossed out of court. But whatever the outcome, the high-profile case has already served up one revelation that some loyal double-double drinkers will have a hard time swallowing: the Jollymores aren’t the only Hortons operators who think they should be making more money.
Among the evidence disclosed so far are a number of internal emails that discuss “fear” and “discontent” among franchisees, some of whom “are just keeping their mouths shut for fear of retribution” from management. “Every owner that I have talked to has expressed dissatisfaction with the bottom line,” reads one note sent to Roland Walton, head of Tim’s Canadian operations, weeks after the lawsuit was launched. “[T]he feeling is that [the company’s] attitude is ‘We’re still the best game in town, if you don’t like it or aren’t happy, there is a waiting list to get stores.’ ”
The email concludes: “I have yet to be in the company of Tim Franchisee’s [sic] whether at meetings or social situations that there isn’t lots of bitching and complaining.”
Read more at: MACLEANS.CA