Perversely, much more information is available via U.S. internet sources for Tim Hortons franchises than can be found north of the 49th parallel by an independent researcher.
Since 1979, the U.S. Federal Trade Commission has required all franchise disclosure documents to be publicly available (the Franchise Rule). As an example, this is the first of 555 pages of the free online copy of the 2013 Tim Hortons Traditional FDD. This is critical information; similar to financial market prospectuses.
It’s as easy as going to the Wisconsin site, typing in the name of the system, and more-often-than-not a free pdf shows an unbelievable amount of investment disclosure information.
How about getting the most recent filing for Tim Hortons in Canada? On Feb 17th, I emailed the new owners and asked for a copy and received this reply:
Dear Les Stewart:
Thank you for your message. All of the information we are able to provide the general public is available on our website. If it is not on the website, we regret to inform you it is proprietary in nature and we are unable to fulfill your request.
The TDL Group Corp.
Franchising Canada Representative
The Ontario law is called the Arthur Wishart Act (Franchise Disclosure), 2000. It’s disclosure requirements were modeled on the U.S. model.
Disclosure requirements (standard format, both U.S. and Canada)
- bankruptcies (p. 17 of the U.S. Tim Hortons Traditional FDD),
- litigation history, (p. 15),
- corporate-, franchisor-owned outlets (p. 72),
- franchised stores: terminated, non-renewed, re-acquired, ceased operation, transferred, and sold-but-not-opened (by category for 3 years, p. 72),
- fees (royalty, advertising, computer, other, p.17),
- franchisor’s financial statements (p. 85),
- list of current franchisees: name, address and telephone number (Exhibit O: p. 333),
- list of recent former franchisees: name, address and telephone number (Exhibit P: p. 387),
- restrictions on sources of products and services (and amount $ franchisor receives, Item 8: p. 32),
- entire franchise agreement (p. 133), financial representations (Item 19: p. 69) and
- leases, trademarks, etc.
The Ontario government/Wishart currently does not require either (1) public filing or (2) an online repository of documents.
I believe Canadian small business investors deserve as much access to this financial information than do our United States neighbours.
How can we have informed public policy without publicly-available, agreed-to data?