3G Capital poises for accelerated growth in U.S. Tim Hortons by closing stores?

November 23, 2015

Number of closed stores and terminated Canadian franchisees is both unknown and unknowable because of lapdog disclosure rules.

20151123 Tim Hortons

Tim Hortons confirmed that stores across Maine and New York closed on Friday. RENE JOHNSTON / TORONTO STAR FILE PHOTO

An interesting article in Canada’s largest daily newspaper, Tim Hortons closes locations in New York, Maine, (subheadline:
Coffee chain refuses to say if it has closed any Canadian outlets. It has reportedly closed more than 20 stores in the U.S.):

Tim Hortons has closed down many locations across New York and Maine, only a few weeks after reporting a profit of $49.6 million (U.S.).

The coffee chain would not confirm if any Canadian outlets had been closed or how many U.S. stores shut.

And also in a press release:

“As we build the foundation for accelerated growth in the U.S., we have decided to close some restaurants in New York and Maine.

Comment on article by reader “Relax”: Apparently, Tim Hortons has figured it out. The best way to “accelerate growth” in the US is to start by closing stores.

Canadian Franchise Industry Much More Secretive: Franchisors in the United States are required to report the number of stores and franchisees closed, terminated, etc. each year. There is even public access to their Franchise Disclosure Documents (see California’s search template: Tim Hortons USA Inc). In Canada, provincial ministries do not require franchisors to publish this data. So sad for investors or journalists or the captured franchisees’ billions of investment $.

Additional coverage:

Franchisors have traditionally sent signals to their franchisees on how they would be treated if they’re not seen to be “on the team”. Normally, the most vocal are out first.

Word from Canada is that the franchisees has it that their stores have never been more profitable.

The real prize is on the (surviving but fewer) CDN franchisees’ income statements.

 


Reebok, adidas franchisees take protests into India’s streets

September 2, 2012

It is not hard to understand what this is all about: franchisees in any language are the least likely 99% protesters in the world.

1. Franchisees protest at company’s doorstep, Business Standard, Aughust 31, 2012:

Excerpt:

The tussle between a section of Reebok franchisees and German sports-goods maker Adidas took an ugly turn today, with about 100 people protesting at the gates of the company’s headquarters in Gurgaon.

The franchisees from the National Capital Region (NCR) were protesting against the new terms proposed by the German sports goods major for operating stores in India. The company had given an ultimatum to about 70 franchisees in the NCR region to either accept the new terms, or shut shop by August 31.

Together, these franchisees operate about 125 Reebok stores in the NCR region. The franchisees, who have formed a consortium called Delhi Reebok Franchisee Association, say the new terms and conditions aren’t viable. These terms seek to do away with the minimum guarantee (MG) model the franchisees were operating on so far. Under the MG model, franchisees were assured a minimum amount from the company, irrespective of sales. It was because of this model Reebok was able to set up about 900 stores in 325 cities and towns, becoming the largest sports-wear brand in India.

2. Reebok’s Delhi franchisees cry foul over notice to close shop, SmartInvestor.In, August 26, 2012

“Now they are asking us to close the shop in just 15 days. They are saying that once the goods are transferred, it is our responsibility,” Delhi Reebok Franchisee Association spokesperson told PTI.

The franchisees claimed that they received notices from Reebok India’s parent Adidas Group on August 13 for closing down their stores by August 31 if they do not accept the new terms of the agreement.

“They are purely holding us on ransom and are not ready to settle our claims at all,” they alleged.

And…

In May this year, Reebok India had filed an FIR, alleging that its former Managing Director Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat were involved in a Rs 870-crore fraud by indulging in “criminal conspiracy” and “fraudulent” practices over a period of time.

Currently, Serious Fraud Investigation Office and the Income Tax Department are probing the alleged financial irregularities in Reebok India Company.


For Canadian franchisees, there’s gold in the hills of unfair industry practices.

August 4, 2012

The Ontario courts have put real teeth into the Arthur Wishart Act (Franchise Disclosure), 2000.

Common industry practices are more and more being considered unfair or offensive to right to associate. The Justices are willing to award real cash to improve the vulnerable partys’ practical plan for improvement (proportionality), access to justice, and behaviour.

One example is timothy’s Coffees of the World Inc.: $50,000 award for franchisor’s breach of good faith duty. How many franchisees are in your system?

However, these claims must be mined, extracted and refined most usually within a functioning, patient independent franchisee association, IndFA.

Franchisees need outside, non-legal help to learn about these matters. IndFA leadership needs to be nurtured and supported in the next-to-unknown franchise power area. There is a role for the elite franchisee bar that’s developing in  Canada but the cannot develop franchisees from the ground-up. For sustainable gains, franchisees have to do it themselves (but with some help).

This is what IndFA  business consulting is all about.

To nurture efficient and effective franchisee-led collective gold mining through patient negotiation and litigation, if necessary.


Why should we try to form another independent franchisee association?

July 30, 2012

That’s a very good question.

Traditionally, franchisee associations get a few quick wins and when the leaders are bought off or banished. The gains (plus) are clawed back.

That doesn’t have to happen any longer. The gains can be permanent, quantifiable and anonymous.

Like all things, managing information has changed: this time in franchise investors’ favour.

To release the million of dollars, you’ll need  a pro to advise you.


Can you imagine yourself as a member of a union?

June 12, 2012

An independent franchisee association is the only way to work toward justice.

It may, however, require you to think beyond a 5th grade level.


War if necessary but not necessarily war

November 10, 2011

Canadian Tire is a rare franchisee success story.

At one time, Canadian Tire,  grocery and auto dealers all used to have real power with their franchisor. The grocers and auto dealers went south over the decades.

Only Canadian Tire consistently stood up to their franchisor and resisted being betrayed by their “professionals”.

Anytime the franchisor had a stupid idea, slam, the CT franchisees hammered them.

  • Smart. Tough. Cohesive.

Capital must accumulate and patiently wait

November 8, 2011

A for-profit, multi-share  corporation is the only effective means of preventing future franchisor opportunism.

Only got non-profit, dues-supported IndFA after 3 years?

  • License for impotence at best, failure at worst.

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