Tim Hortons Franchise Cost, Profit, Failure Rate 2024

The Tim Hortons franchise is well-liked by people who want to start a business. It has a strong history, and many people know this famous Canadian brand.

If you know about franchising or are just thinking about owning your business, Tim Hortons may be a good chance. It could be a way to make good money.

This article tells about the total investment needed, franchise fees, profits, training programs, renewal rules, and more.

This will help you see if buying a Tim Hortons franchise is good for you. Keep reading if you want to learn more.

Tim Hortons Franchise

About & History Of Tim Hortons

Tim Hortons began in 1964. It was started by Canadian hockey players Tim Horton and Jim Charade. The first store opened on May 17th in Hamilton, Ontario. The store sold coffee and donuts.

1967 – 2014

In 1967, Ron Joyce joined as a partner and made the business bigger in Canada. By 1975, over 200 stores were open in Ontario and Quebec.

Tim Horton died in a car crash in 1976. Ron Joyce became the full owner of the company.

Joyce made the business grow fast in Canada. He used strong marketing to make the company famous. In the mid-eighties, Tim Hortons grew in other provinces. They also started in the United States in 1984 with 3 places in Buffalo, New York.

In 1995, Tim Hortons went on the Toronto Stock Exchange. A year later, they opened their 500th store in Canada.

In the next 15 years, they opened stores all over North America.

In 2014, Burger King bought Tim Hortons for $11 billion. They became the third biggest fast-food chain in the world.

Today

Today Tim Hortons is a big brand in Canada, with 4500 restaurants in 14 countries. They own 17% of the coffee and doughnut market in Canada.


Tim Hortons Franchise Model

Cost or FeeAmount or Percentage
Initial Franchise Fee$50,000
Initial Investment $680,900-$1,906,300
Investment (Mid-Point)$927,000
Net Worth Requirement $1,500,000 – $10,000,000
Cash Requirement $500,000 – $4,000,000
Royalty Fee6%
Ad Royalty Fee 4%
Area neededBetween 1,000 and 2,300 square feet
Number of Outlets5100+

Tim Horton’s Ideal Candidates

To be a candidate, you must fill out a questionnaire.

The money needed is $500,000, and you must have $100,000 without any debt.


Tim Horton’s Selection Process

Tim Horton's Selection Process

First, you have to pass a check. If you pass, Tim Horton’s will talk to you.

Then, you must pass checks for credit and crime. You must also prove what you own and sign a paper that says you won’t tell secrets.

Then, there are two more talks with a person from the company.


Training Of Tim Hortons

New franchise owners get 4-5 weeks of training at Tim Hortons Training Center.

The team teaches how to handle customers and workers, take care of machines, and follow rules for food and cleanliness.


How Much Does Tim Horton’s Franchise Make?

The average sales of Tim Hortons franchise is $87,858, and the median sales is $90,431. Therefore, we estimated that Tim Horton’s franchise average net sales is $999,000.

If we consider a profit margin of 10%, the average profit for a franchise owner would be around $99,900 for that year.

This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%999000.00
Rent11.25%(112387.50)
Insurance5.63%(56193.75)
Salaries22.50%(224775.00)
Franchise Royalty Fees5.63%(56193.75)
Utilities2.25%(22477.50)
Cost of Goods Sold (COGS)28.13%(280968.75)
Labor (Variable)14.63%(146103.75)
Total (Expenses)90.00%(899100.00)
Net Profit10.00%99900.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Tim Hortons Payback Period

With a mid-point investment of $927,000 and an estimated 10% profit on the average net sales, the yearly profit will be $99,900.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment (Mid-Point) / Yearly Profit = $927,000/ $99,900 = 9.2 years

Hence, it would take around 9.2 years to pay back the initial investment for a Tim Horton’s franchise based on these figures. However, this time could be shorter or longer depending on many things like sales, costs, and how the business is conducted.


Tim Hortons Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2019727656-71
2020656633-23
2021633637+4

For the Franchised outlets:

  • In 2019, the failure rate was (71)/727×100≈9.76%
  • In 2020, the failure rate was (23)/656×100≈3.50%
  • In 2021, the growth rate was (4)/633×100≈0.63%

According to the above-mentioned calculations, the failure rate for franchised outlets is between 9.76% and 3.50% over the span of 3 years. However, the franchise experienced an increase in the number of outlets in the year 2021, showing a growth rate of 0.63% in the year.

If opening a restaurant franchise appeals to you, consider Sweetgreen Franchise, Cook Out Franchise, Underdog BBQ Franchise, Olive Garden, or Jack In The Box as viable options.


Tim Hortons Comparison

CompanyTim HortonsTaco Bell
Founded In1964 1970
Initial Investment$680,900-$1,906,300$525,100 – $2,622,400
Franchise-Fee$25,000-$50,000$25,000
Total Outlet5,1007,800
Annual Revenue$6.526 Billion$2.03 Billion

FAQs

What is Tim Horton's most popular cuisine?

The most popular cuisine of Tim Hortons is an English muffin sandwich.

How many Tim Horton's Franchises are there in the US?

There are more than 632 franchise stores in the USA.

Is Tim Hortons a franchise?

Tim Hortons is an international franchise brand that offers restaurant franchises worldwide.

How much does a Tim Hortons franchise cost?

The franchise fee for Tim Hortons is $25,000-$50,000, and their cost of investment ranges from $680,900-$1,906,300.

Who is the owner of Tim Hortons?

Tim Hortons is owned by Restaurant Brands International (RBI), a company formed in 2014 by merging two fast-food giants: Burger King and Canadian coffee chain Tim Hortons.

How many locations does Tim Hortons have?

There are currently 5,352 locations of Tim Hortons restaurants worldwide.

Who founded Tim Hortons?

Tim Hortons was founded in 1964 in Hamilton, Ontario. It was founded by Canadian Hockey player Tim Horton and Jim Charade.

Where is Tim Hortons Headquartered?

The headquarter of Tim Horton is in Oakville, Canada.

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