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Spat breaks out between Tim Hortons franchisee factions over public complaints

Spat breaks out between Tim Hortons franchisee factions over public complaints

OAKVILLE, Ont. — Tim Hortons's franchisee advisory board has waded into a war of words between the brand's parent company and an outspoken restaurant owners association, attacking the group for publicly slandering the company and making complaints about it to the federal government and in the media.

In a letter sent to fellow franchisees this week, the board says recent "negative commentary," much of which stemmed from the Great White North Franchisee Association's criticism, is "corrosive and damaging to our brand, our livelihoods and that of our teams." 

The franchisee advisory board has 19 elected members — all whom signed the letter — who liaise with company executives and advocate on behalf of franchisees. 

The letter was triggered by the relationship between parent company Restaurant Brands International and the GWNFA, which became tense over the last few months, after the association attacked RBI for cost-cutting measures in the wake of Ontario's minimum wage hike, cash register outages and a $700-million renovation plan to spruce up restaurants. Their spat intensified in April, when a federal investigation was triggered after GWNFA wrote to Innovation Minister Navdeep Bains alleging RBI had failed to live up to promises made under the Investment Canada Act in 2014, when Tim Hortons was merged with Burger King to create RBI.

The letter called GWNFA's plea for a government investigation "a final straw."

"Without a doubt, this media attention has affected our brand in the eyes of the public – it has caused the public to watch and consider us more critically than they may have once done," the letter said.

"This second look has exposed issues that may have previously existed but were forgiven or overlooked. Issues such as service, accuracy or operational execution to name a few."

The board said it feared the public wrongfully perceives that GWNFA speaks for all franchisees and warned that "our guests are voting with their feet."

It noted that Tim Hortons had plunged from the fourth spot to the fiftieth in a recent annual brand reputation rankings survey looking at Canada's most adored companies.

RBI's stock also took a dive, reaching its lowest point this month since September 2017 as internal strife between the GWNFA and the company became public.

In an emailed statement, RBI noted it didn't have anything to say about communications between the sparring franchisee factions, but said it was committed "to improving our relationship with all of our franchise owners."

"We realize we have work to do, and welcome all opportunities for dialogue with franchisees in pursuit of that goal," the statement added.

Earlier this week, Tim Hortons president Alex Macedo told The Canadian Press the company has a "good" rapport with the franchisee advisory board.

On the topic of the letter GWNFA sent to Bains citing issues with RBI's commitments to maintain franchisee relationships, the company's rent and royalty structure for five years and existing employment levels at franchises across Canada, Macedo said only that "we have reported into Ottawa each and every year with everything we have done and we are happy to co-operate if anything comes up."

The GWNFA did not immediately respond to a request for comment.

Board member Lou Gossner would not agree to an interview on the letter, but said in an email that "we look forward to moving past our recent differences and getting back to doing what we love: serving our guests, our team members and our communities."

 

Companies in this story: (TSX:QSR)

Tara Deschamps, The Canadian Press