Who is best to consult to a few Tim Hortons franchisees in their relationship with 3G Capital?

January 18, 2016

I did the franchising industry forensic accounting (diminishing gross margins) for the National Bread Network.

20160118 NBN card front

A membership program was developed and executed. The initial ROI leverage was impressive to 100% of the Canada Bread franchisees. See one of three direct mail pieces.

20160118 NBN card back

In the end, the few elite investors made much, much more.


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.

 


Minister Moore: Please recognize within federal insolvency law the interests of franchisees, their staff, and families.

February 12, 2015

Since 1970, United States federal and state regulations have recognized the distinctive vulnerabilities within the franchisor:franchisee relationship.

James Moore MP

The 1,140,000 employees, 76,000 franchisees, and $15.2-billion invested within franchised outlets in Canada deserve to be as protected just as well as our friends to the south.

Source

The Target and potential for Tim Hortons are good examples of the Harper government’s commitment (via immediate Ministerial discretionary powers) in proving the Canadian entrepreneurial class is not useful only as cannon fodder.

Some of the laws that may need updating.


How long will CDN organized labour & the NDP fiddle while 96,000 Tim Hortons franchisees’ staff and management burn?

January 31, 2015

Makes a citizen democrat want to burn up his orange card.

ndp card

How about the nearly 1,100,000 other Canadian employees/families that work in franchised outlets?

Don’t the union and NDP brainiacs understand that 3G Capital will be forcing the franchisees to do their dirty work by laying off tens of thousands of their hourly and managers, many of them personal friends? Hello: jacking up franchisees cost of goods to +32%, driving their “equity” into the red, makes layoffs inevitable.

Franchisees dislike unions true. But the fear and loathing for the vulture capitalists is profound, notwithstanding the company-man, shill franchisees.

Smart, silent current franchisees know the sewer they’re being sent into: Country Style, Second Cup, Coffee Time, Bakers’ Dozen, etc.

Franchise Industry Statistics, 1998

  • Number of Employees: Ontario 400,000 to 600,000 (Canada 760,000 – 1,140,000)
  • Annual Retail Sales: Ontario $45 to 50 billion (Canada $90 billion)
  • Number of Franchisees: Ontario 40,000 (Canada 76,000)
  • Total Investments: Ontario $2 to 8 billion (Canada $3.8 – 15.2 billion)
  • Number of Franchisors: Ontario 500 (Canada 1,300)
  • Franchised Retail Sales (% of Total Retail): 40
  • Number of new lawsuits per year in the Ontario Franchise Industry: 5,000 Ontario Government

I’d like to know:

  1. How many NDP executive positions in joint provincial/federal ridings (Simcoe Grey and Barrie-Springwater-Oro-Medonte) do I have to volunteer/toy with to get an audience from the ON NDP? Monthly payer?
  2. Maybe Ms. Nash MP should ask Charlie Angus ($15 per hour minimum wage?) about the work that Tony Martin former MPP and MP and I did,
  3. Or maybe Mr. Singh and Ms. Horwath need to check their egos and start bragging about what the entire Hampton caucus did to get Ontario’s 1st franchise law and the de facto Canada-wide statute after 30 years of all-party broken promises?
  4. Maybe check with the Fightfor15.org people to find out why they are very, very interested in knowing more about franchising?
  5. btw: McDonald’s (franchisor and franchisees) has just been fined by the U.S. National Labor Relations Board because they judge McDonald’s as a “joint employer” (see here, here).

Full Disclosure: I was a franchisee (twice), studied poli sci, a member of the Teamsters’ union, and continue to be viewed as a “union organizer” by franchisors and their toadies.

Based on the theory that your enemy’s enemy, is your friend, you’d think it’d be Palm Sunday for Mr. Stewart and the Canadian Alliance of Franchise Operators rather than a type of amateur hour.

Kathleen Wynne Les Stewart

With friends like this, it almost makes a guy see red.

Dale Carnegie moment: Of course, saying you care about the lost jobs is a lot easier than having to co-operate with people that have, like, technical knowledge of the most sophisticated form of international commerce: business format franchising.


Why won’t Tim Hortons franchisees talk to the media?

January 31, 2015

Franchisees behave as if they were prey creatures. Under extreme stress (in the clutches of a predator) they “freeze”.

Gazelle single

The “lifers” have learned to become hyper-sensitive to danger. They cope in the one way they can: keep their mouth shut, especially to outsiders.

Franchisee Trauma is the Franchisors Stock-in-Trade: Only franchisees and their spouses know the pain of the abuse (violence in word form) that their franchisors have doled out over the years. Name-calling, intimidation, vulgarity, threats, shame-humiliation: intentionally done in front of your peers and staff. Opportunistic behavior designed to demonstrate who is “it” and who is siht. That you have lost control of your life. That you are the weak; that you are worthless. Impotent.

But most of all: alone and dependent.

Mammals has evolved over millions of years to survive in only 3 ways: fight, flight or freeze.

Tim Hortons franchisees cannot talk for many explainable reasons:

  • experts in trauma psychology know that voicelessness is very closely aligned to powerlessness.

 


Serruya family buys Kahala, Cold Stone and others

August 23, 2013

Multi-tradename franchisors often are (how should I say this) the least sensitive to franchisees’ investment concerns,

BMM Cold stone

A very good article on Blue MauMau by Janet Sparks, Kahala Acquired in Auction by Serruya Family:

TORONTO – The Serruya family today announced that they have acquired a controlling interest in Kahala Corp., owner of Cold Stone Creamery and many other franchised brands. The transaction was completed on Monday.

The Serruya family brings substantial experience in franchising to Kahala. They are planning for growth of Kahala brands in both international and North American markets.

The new franchisors seem to have to prove something to knowledgeable franchisee advocates.

Former Cold Stone franchisee Cecil Rolle, who has been engaged in litigation with the franchisor said, “I’m hoping the acquisition of Kahala Corp by the Serruya Family is a watershed moment for Cold Stone Creamery franchisee profitability and the harmonization of the franchisor to franchisee relationship, which has been as contentious as they come. The Serruya Family will have to prove to me they are serious about the concerns of the franchisees and their families. Rolle has been an advocate for current franchisees, assisting them in profitability and other issues.

Some of the comments about the buyers from a related Globe and Mail article are speak to all the franchisees might be in for:

10. Sniktaw
Have to agree with the general thrust of the other posts here. These scumbags are right up there with Marc Tellier re ability to engineer massive shareholder value destruction whilst at the same time garnering obscene riches for themselves.
11. 911c2
i also got creamed owning their stock. Also, rode up the swisher stock that coolbrands turned into. That stock was jacked up to $10 now its at $1 again!! I will run away from anything that they are selling. No more stocks from them. won’t even try yogurtys since they r involved. Are they still doiong business deals with Jack Banqueseus aka Jack Banks who had four public shell stocks?
this post is all in my humble opinion

Franchisees have much, much less protection against opportunism than do owners of publicly traded stock.


Use legal, organizational and technological leverage to move your franchisor

November 9, 2011

Multiply your efforts by using the laws of our society intelligently.

Accelerating Relationship Leverage

A private for-profit corporation (anonymous franchisee shareholders) AND a 100% locked-down, franchise law-specific indexed document database (wiki) pivoting WITH a highly public attorneyless franchise network.

Benefits

  • solves the information and resource imbalance endemic in franchising,
  • takes less than 3.0 per cent of franchisees needed to start as shareholders,
  • valuation of for-profit calculated annually (franchisees will clamour for 0.1% share in 5 years),
  • allows innovators and early adopters to carry at first,
  • focuses attention on a single, credible voice for franchisees that is respected because it is in the franchisor’s  self-interest to do so,
  • shareholder anonymity balanced with managerial control (no one shareholder can highjack the agenda),
  • accesses the most cautious investors (overcomes stigma of betrayals and organizational collapse),
  • retains franchisee “equity” (for-profit franchisee corp. directly aims to support and increase re-sale value),
  • prevents much of future franchisor opportunism: self-interest with deceit (franchisee cost avoidance),
  • voluntarily shifts capital from franchisee’s “equity” (temporary, illusory) to group equity (real),
  • more able to reform system rather than just legally fight and be forced to leave,
  • facilitates: vendor programs, franchisee self-borrowing, stock purchase PADs, training, life:work balance,  buying/selling franchises,
  • each franchisee is issued a membership in the attorneyless franchise network and a share in the for-profit corporation (one share),
  • enables former franchisees to invest (if desired),
  • strategically positioned to defend against private equity vultures,
  • builds trust with shareholder group (external investments, reducing risks, development),
  • accesses and retains expertise that dues-paying organizations cannot afford, and
  • capitalizes on the fact that CDN, ON Court decisions have shifted economics on dispute resolution in franchisees’ favour.

Costs

  • takes time, need for long-term perspective,
  • 24 franchisee shareholders to start “risking” 2% of their cash they’ve made in the last 10 years,
  • requires patient shareholders (no interest payable initially).

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