Frequently Asked Questions

The initial investment required for a U.S. Tim Hortons will vary, depending on your particular needs and choices. If the complete franchise package for a standard store is purchased through Tim Hortons and if the franchisee leases the premises from Tim Hortons, the total cost of the US franchise package will vary between approximately $337,000 to $439,800 (USD) for the equipment cost (plus sales tax if applicable), approximately $2,400 to $28,000 (USD) for real property cost, and franchise fee of $35,000 (USD). There are also additional required pre-opening expenses that range between approximately $35,000 to $62,900 (USD).

* Please read more about our Franchise Incentive Program under "Franchising Program" (especially relating to a lower unencumbered capital requirement of $55,000 to $82,900), available in select markets.

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For a standard U.S. store franchise package you will need unencumbered capital ranging from approximately $146,600 to $247,200 (USD) (includes 30% deposit of equipment and installation, applicable sales tax, franchise fee, special shop development and required pre-opening expenses). This unencumbered capital needed varies due to equipment costs, sales tax (which is different from state to state for new and existing shops) and your additional required pre-opening expenses ranging from approximately $35,000 to $62,900 (USD). This range does not include immigration costs or moving cost. The balance of the standard store U.S. franchise package cost can usually be financed through various bank lending programs, subject to fulfillment of their usual credit requirements.

* Please read more about our Franchise Incentive Program under "Franchising Program" (especially relating to a lower unencumbered capital requirement of $55,000 to $82,900), available in select markets.

You may be provided with the following:

• the acquisition and development of the real estate where your Tim Hortons restaurant will be located;
• all of the equipment, furniture, display equipment and interior signage which are required to operate a Tim Hortons restaurant and which are owned by you;
• a 7-8 week training program during which you are taught all facets of the operation of your restaurant. This training program is held at our National Training Center in Oakville, Ontario. In addition, we also provide a 10-day shift in-store training program in the United States which typically runs about 1 1/2 weeks after your Oakville training program;
• the assistance of our Operations Staff with the opening of your restaurant. The Operations Staff remain with you for up to 17 days and help you hire and train staff, clean and prepare the restaurant for opening and provide general assistance and guidance to you in the running of your restaurant;
• the loan of all Tim Hortons Operation Manuals which contain recipes, formulas, operating procedures, equipment maintenance guidelines, record keeping systems and general reference materials for guidance in the proper manner of operating a Tim Hortons restaurant;
• a team of personnel, experienced in all facets of our system, who are available on an ongoing basis for operational support and guidance;
• the right to use Tim Hortons trademarks, which are applicable to your franchise in connection with the operation of your restaurant for the term of the franchise.

In addition to other expenditures, you are required to make the following payments on an ongoing basis during the term of the franchise agreement:

• a weekly royalty of 4 1/2% of your restaurant's gross sales;
• typically the rent during the initial term (usually 10 years) is 8 1/2% of monthly gross sales. Rent for the renewal term(s) will typically be computed on a percentage rent basis, subject to a minimum base rent;
• a monthly advertising fee of 4% of gross sales from your restaurant.

* Please read more about our Franchise Incentive Program under "Franchising Program" (especially relating to a lower unencumbered capital requirement of $55,000 to $82,900), available in select markets.

The Tim Hortons franchise agreement typically provides for a ten (10) year term. Also, you typically have an option to renew for an additional aggregate period of ten (10) years, subject to your fulfillment of certain renewal conditions. There is no additional franchise fee charged for the renewal term.

This business is a most demanding one. It requires and responds to personal attention. It is most important that you personally be involved with all facets of the business, and that you reside in the United States, within a 30 mile radius of the restaurant. You must be able to operate your restaurant in accordance with Tim Hortons standards of service, quality and cleanliness. You must set the example for your employees to follow. These demands require not only a firm personal commitment to the business, but at least initially, many, many long hours. The new franchisee should provide a substantial amount of personal manual labor, especially during the first year of operation. You should be prepared and have the ability, if necessary, to do any and all tasks for your restaurant, including production, if needed. In addition to production skills, you must also understand and be able to perform all of the sales and maintenance functions required to ensure successful restaurant operations.

These demands on you personally can be minimized by your ability to attract, motivate and retain capable production and storefront personnel. We provide you with the basic procedures and guidelines to use in recruiting, training, retaining and motivating your personnel. Instruction in their use is given to you during the initial training program and by your District Manager once you are in your restaurant. However, we do not operate your business for you. We will train you and advise you, but the responsibility for developing a sound personnel program and employee relations is yours.

We are committed to locating restaurants in markets where real estate and market research analysis indicate new restaurants can be supported. Our marketing plan of concentrating restaurants in an area is designed to provide for strong brand identification, efficient supervision, effective advertising and the development of a strong competitive position. Because of this strategy and the rapidly changing and complex considerations that enter into site selection, we do not promise a franchisee an exclusive territory.

In the implementation of our expansion programs, one restaurant could very well lose some business through the placement of another restaurant in the area, even though we attempt to ensure that the placement of a restaurant in a market does not significantly affect the sales and profits of any other Tim Hortons restaurant in the market. However, the ultimate development of the marketing area with its attendant brand identification, competitive strength through greater advertising and higher operating standards is intended to result in an overall long-term benefit for all restaurants in the Tim Hortons system.

We do accept multiple-unit franchisees who have demonstrated the ability to successfully operate one restaurant, and who also will work full-time supervising the additional restaurants they acquire.

A. There must be two (2) owner operators who:

• Both have equity in the business and will commit their full and entire efforts to the business
• Both have no other business venture
• Both are ready to sever relationships with their current employer prior to beginning our 7-8 week training session
• Both live in the U.S. within 30 miles of their Tim Hortons Shop

B. Unencumbered Capital of $146,600 to $247,200 (USD)

• 30% of the complete franchise package (equipment and installation, applicable sales tax, franchise fee and special shop development)
• $35,000 to $62,900 (USD) for additional required pre-opening expenses (please refer to Item 7 of the FDD under the headings of Training, Start-up Supplies and Initial Inventory, Professional and License Fees, Insurance, Initial Advertising and Promotion, Security Deposits, Additional Funds)
• These funds must be unencumbered - no debt accounts
• These funds do not include immigration costs or moving costs

Upon receiving a completed franchise application, we will review it and respond to it accordingly.

The franchisee approval process is designed so that both parties can gain a deeper understanding and insight into each other and determine if there is a fit to ultimately enter into a franchise agreement and become a Tim Hortons franchisee.

The approval process is made up of a series of meetings, allowing the applicant to meet with a variety of individuals from our organization, as well as some of our franchisees. After 1-2 initial meetings, we will ask that you invest some time and effort by working in at least two (2) in-store shifts. This will allow you to gain a hands-on perspective of restaurant operations. Your work will be done on a volunteer basis and there is no remuneration paid by us or by the restaurant owner. Also in this timeframe, we will conduct background and financial checks. As part of the financial check, we request a letter of liquidity from you i.e. evidence of unencumbered cash or assets by way of a statement from a financial or investment institution.

Candidates are advised (in writing) as to whether or not they meet the profile of becoming a Tim Hortons franchisee within 30 days of our receipt of their completed application. Once a candidate meets our minimum requirements they will become 'active' in consideration of any opportunities that may become available.

When an opportunity is identified, suitable for a new operator (whether this is an existing store or a new store), all candidates who have identified that particular area as a location preference, will be considered. The most qualified candidates will be contacted for the first interview. Consideration is not based on the length of time that a candidate has been on file.