Tim Hortons Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$124,000

-

$2,138,000

LOCATIONS

626

Emily

Updated

April 11, 2024

Is

Tim Hortons

a franchise?

Yes,
Tim Hortons
currently
accepts
franchise
applications

Founded in 1964 in Hamilton, Canada, Tim Hortons is a famous Canadian restaurant chain with presence in 15 countries globally. With its headquarters in the bustling metropolis of Toronto, Tim Hortons is renowned for offering a menu that's synonymous with coffee, doughnuts, baked goods, soups, and sandwiches.

The fascinating journey of Tim Hortons began with the collaboration of two visionaries: Canadian ice hockey defenseman, Tim Horton, and Montreal-born businessman, Jim Charade. Their dream took flight, and just a year later, in 1965, Tim Hortons started its franchising journey, setting the stage for its iconic coffee shops to flourish.

Adding an intriguing twist to its story, Tim Hortons got into a partnership with Wendy’s, a prominent American fast-food restaurant chain, in 1995. This partnership was destined to last a decade and left an indelible mark on the Canadian fast-food landscape.

However, in 2014, a new chapter unfolded when the Canadian fast-food chain was acquired by 3G Capital, a Brazilian private equity firm.

Currently, Tim Hortons enjoys a formidable global presence that spans across 5,352 locations in the US and 15 other countries.

How many

Tim Hortons

franchises

are there?

In 2022, there were
626
outlets in
the United
States, of which
622
are franchises, and
4
are corporate-owned.

What are the

Tim Hortons

franchise

fees?

Advertising fee

4.00%

Initial Franchise Fee: $50,000 for a 20-year term.

  • This fee is applicable when you sign each Franchise Agreement for a Franchised Restaurant.

Royalty Fee: 4.5% to 6% of Gross Sales.

  • This fee is due every Thursday based on the prior week's Gross Sales. The royalty is generally 6%, assuming that you have property control. Other franchisees may pay reduced royalties based on various factors.

Advertising Contribution: 4% of Gross Sales.

  • This fee is due within 10 days of the end of each month based on the prior month's Gross Sales.

Interest and Audit Costs: Costs of audit plus interest.

  • This fee is incurred as needed.

Additional Training: The materials fee will not exceed $1,000 per person.

  • This fee is incurred as needed.

Transfer Fee: 5% of the full purchase price.

  • This fee is due before the transfer.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Tim Hortons

franchise?

It costs between
$124,000
and
$2,138,000
to start a
Tim Hortons
franchise.

For those considering diving into the world of franchising with Tim Hortons, understanding the financial commitment is crucial. Here's a detailed look at the investment opportunities available:

Standard Shop:

Tim Hortons' Standard Shop model is the most traditional representation of the brand, offering a full range of products and services. There are three distinct investment opportunities within this category:

  • New Model (Franchise Agreement): This is the classic Tim Hortons setup, and the estimated initial investment for this model ranges from $971,000 to $1,717,500.
  • Newly-Built Co-Branded Shop: A fusion of Tim Hortons with another brand, this model requires an investment ranging from $695,500 to $1,837,400.
  • Tim Hortons Restaurant Renovated to Become a Co-Branded Shop: For those who already own a Tim Hortons and are considering a co-branding opportunity, the investment for renovation and co-branding ranges from $135,300 to $253,600.

Non-Standard Shop:

The Non-Standard Shop is a more flexible model, often tailored to specific locations like malls or airports. The estimated initial investment for this model ranges from $124,000 to $393,800.

Standard Shop Investment Breakdown:

Type of Expenditures Amount
Initial Franchise Fee $50,000 to $50,000
Real Estate Taxes, Personal Property Taxes and CAM Charges $5,000 to $70,000
Equipment $300,000 to $410,000
Planning and Development and Design Costs $20,000 to $100,000
Site Development Costs $100,000 to $230,000
Building Costs $440,000 to $745,000
Training $20,000 to $27,000
Start-up Supplies and Initial Inventory $7,000 to $14,000
Professional and License Fees $1,500 to $10,000
Insurance $2,500 to $21,500
Security Deposits $0 to $15,000
Additional Funds $25,000 to $25,000
Total $971,000 to $1,717,500

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Tim Hortons

provide

training

to its

franchisees?

Yes,
Tim Hortons
provides
training

Tim Hortons emphasizes the importance of equipping its franchisees with the necessary skills and knowledge to run their outlets effectively. Here's a detailed look into their training approach:

Initial Training:

  • Before starting their journey with Tim Hortons, franchisees are expected to undergo a structured training program. This program is tailored to provide them with a comprehensive understanding of the brand's operations.
  • The training includes both classroom sessions and on-the-job training. The classroom training, titled "Welcome to Tim Hortons," is an orientation session that lasts for 1 hour and is conducted in Columbus, Ohio.
  • On-the-job training, which mirrors the classroom orientation, also spans 1 hour, offering hands-on experience to the franchisees.

Training Supervision and Materials:

  • Franchisees are provided with a range of instructional materials during their training. This includes a production manual, various online training modules, and subject-specific written materials crafted especially for the initial training program.

Does

Tim Hortons

provides

territory

protection?

Franchisees may only operate their Restaurant at the Accepted Location specified by Tim Hortons. If a site for the Restaurant has not been accepted at the time of executing the Franchise Agreement, franchisees must select a location that meets Tim Hortons' site selection criteria within a specified site selection area. Franchisees will have no exclusive or protected rights in this site selection area.

Furthermore, franchisees may receive a territory with limited protected rights, known as an "Area of Protection." During the term of the Franchise Agreement, Tim Hortons commits not to establish or operate, nor license any other person to establish or operate, a Restaurant under the Proprietary Marks and System within this Area of Protection.

Can a

Tim Hortons

franchise

be run as

a passive

investment?

Franchisees of Tim Hortons are expected to retain a "General Manager", which may be a principal of the franchisee.

This General Manager should be trained in the "TIM HORTONS SYSTEM" and must be granted the authority to ensure that the day-to-day operation of the Franchised Restaurant complies with the Confidential Operating Manual, the Franchise Agreement, and other related agreements.

The General Manager is expected to devote full time and best efforts to the overall supervision of the Franchised Restaurant and any other Tim Hortons Shops owned or operated by the franchisee.

Additionally, franchisees must always employ at least one individual known as the "Restaurant Manager" responsible for the direct, personal supervision of the Franchised Restaurant. This Restaurant Manager, within six months of assuming the role, must successfully complete the training program described by the company.

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