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Five things we learned about Tim Hortons from the recent Maclean’s exposé

Always fresh? (Image: Ann Baekken)

The paradox represented by Tim Hortons‘ “always fresh” frozen doughnuts got a thorough examination last week in a long Maclean’s feature examining why Archibald Jollymore, former executive vice-president, and others are launching a whopping $1.95-billion class action lawsuit against the doughnut chain. The case pits Jollymore, a cousin of Tim’s co-founder Ron Joyce, against current president (and Joyce’s successor) Paul D. House, and is laced with the family feuding, backhanded commentary, executive rivalries and all the other prerequisites for a juicy corporate scandal.

Here, five things we learned about Canada’s doughnut titan.

1. Publicly traded Tim’s just sold its 50 per cent stake in Maidstone—the Brantford, Ontario, bakery where all its “doughnut and muffin delights” are made—to a Swiss company called Aryzta AG for $475 million. More and more, the company is becoming less and less Canadian.

2. The cost of purchasing a frozen doughnut from Maidstone, which flash-freezes them using the “par-bake” method, is approximately double what it would cost franchisees to bake them from scratch on-site, according to court documents. Jollymore says this process ate into profit margins so much that he and his wife (both franchise owners) were forced to “eliminate or reduce free product donations to charities, school fundraisers and community events.”

3. Tim Hortons co-founder Ron Joyce admitted the famous donuts ain’t what they used to be. When the frozen method was introduced after he stepped down, he said, “I’ve tried them, and they’re certainly not the same.” One franchise owner who backs the lawsuit even calculated that the “always fresh” donuts are 14.3 per cent smaller than the actual fresh ones.

4. Current Tim’s president Paul D. House doesn’t have many friends—or, rather, he certainly has a lot of enemies—around the office. Joyce in particular has taken a few jabs at his successor, entitling his autobiography Always Fresh and deliberately omitting any honourable mention of House taking the reins of the company.

5. Alumni of the Joyce-era Tim’s are far from united in the lawsuit. Graham Oliver, owner of five franchises and Joyce’s nephew, is among many who oppose the suit, arguing that if the public knew how much franchisees earn, the whining rhetoric about profit margins would result in a serious blow to the company’s image, evoking franchise owners as “wealthy, greedy people.”

Tim Hortons’ extra large trouble-trouble [Maclean's]

  • Ben

    I’m ok with the owners being wealthy. But not with buying degraded quality baking. It was great before. Now it’s disappointing. The brand still seems strong-but I don’t find myself loving it anymore. The sandwiches and soups dropped in quality too. At one point my dad asked why their packaged coffee tasted different than what was served at the store: they said it was because the coffee is relabeled Maxwell House.

  • TIM DEVLIN

    ALWAYS FRESH IS DELIBERATELY MISLEADING…WHEN SOMEONE SAYS FRESH I THINK IT WAS JUST MADE FROM FRESH INGREDIENTS AND BAKED ON THE PREMISES. THERE IS AN ASTRONOMICAL PROFIT IN TIM HORTON AND THE FRANCHISES ARE DIFFICULT TO GET. IT’S WHO YOU KNOW NOT WHAT YOU KNOW…STOP BEING GREEDY…CANADA MADE YOU WHAT YOU ARE SO KEEP IT CANADIAN AND START BAKING BOYS.

  • fat chance

    If the public can’t tell the difference good product and bad product……….let those “greedy bastards” laugh all the way to the bank.

  • McNot

    I agree with ‘fat chance’ (September 14, 2010 at 9:38 am). It never ceases to amaze me how the Canadian sheeple line up to buy this (third rate) cafeteria food. Really, that’s what it is – from their coffee to their donuts. What garbage. What a f@%$# up country. Canadians are loath to support local, independent merchants and instead, queue up for the familiar – a long list of cookie-cutter, mediocre chains that serve up the best shade of gray. Canadians are the ‘gray’ people. Fat lovable ponces…. lovable lummoxes….

  • McNot

    Oh…. and BTW, GOOD LUCK in New York! Your gonna need it.

  • Les Stewart MBA

    Renting someone else’s business model causes problems, especially for mom-and-pop investors.

    “Blue chip” systems can be better at papering-over the single greatest risk to franchisees: franchisor over-reaching (opportunism) which difficult to defend against because of sunk costs and few franchisee associations.

    For many reasons, opportunistic franchisors make a higher ROI than non-predatory ones.

    Les Stewart MBA
    Midhurst ON Canada

  • mattagascar

    Thanks for the clarification Les Stewart, MBA.

  • AreThoseReal?

    I was going to say that Tim Horton’s (success)works mainly for the blue-collar class….until I saw Mr. MBA’s comment …WTF??? I mean really WTF???

  • Fact finder

    What’s fresher? A donut that was baked throughout the night shift, then served at 2pm – or one freshly baked at time of need. No system is perfect, but I’d sooner have one that may be warm then 6 hours old!!!! And if I were an owner – being able to bake on demand and not have to guess and throw the rest out at end or shift(or give them away, which is the best way to reduce waste of unservable product, in my mind) would certainly be beneficial – probably why the store owners “okay’d” it in the first place.

  • ~ Irit Jaye ~

    I think this is an absolute utter disgrace. I have fond memories of going to Tim Hortons as a little girl, you would be able to order a NORMAL SIZED doughnut and actual enjoy it. If only Tim Hortons then could see it now I’m pretty sure it would choke slam it. Tim Hortons is in need of some new QA’s with taste-buds.. SERIOUSLY.. they have the worst coffee I’ve ever had. I wouldn’t even serve to a third world country or their tiny cardboard doughnuts either. Shame on you for ruining another Canadian empire. Thank you! Lit Espresso Bar, T.A.N Coffee, Jimmy’s Coffee, Little Nicky’s Coffee and the rest of the little guys for existing to show the conglomerates how it’s supposed to be done.

  • itsme

    In the baking industry, lots of baked goods are baked and then frozen until needed. Did you think when you order a cake that someone in the back says “Yes, right away!” and bakes one off just for you? 6 hours later they come out with one cake? i’m a little confused by what’s bothering you, i don’t like Tim’s baking myself but freezing baked goods is perfectly acceptable practice and the best way to keep them “fresh”.

  • frozenisnotfresh

    I went to school for Baking & Pastry Arts, and once asked the baking lab instructor why so many bakeries use frozen pastries rather than just baking things fresh. He flew off the handle and screamed “Frozen IS fresh!!”

    I never brought it up in class again, and I understand how it can be more convenient, cost effective, blah blah blah. But there’s no way around it, if it’s ever been frozen, it’s NOT FRESH. Freshly baked goods mean just that. Made from scratch, baked, and served within a reasonable amount of time.

    I dream of one day opening my own bakery with strictly freshly made items, every single day. Sure, it’s a lot of work, but the difference in quality is extremely noticeable to anyone who truly loves the art of baking. I know I’d pay more for baked goods that I KNOW haven’t been sitting around in an overstuffed freezer for god knows how long.

  • Jim

    Thanks Les Stewart. Do you think anyone cares that you have an MBA?

  • brooklin99

    The donuts and coffee has gone downhill at Tim Hortons. I purchased the soup, bun & coffee deal last week from them and the bun is now a quarter of the size. Its funny how the price doesn’t shrink.

  • Darcy walker

    I agree, the sandwiches are crap. The croissants taste like bread and they got rid of Tuna!

  • chefzanne

    I couldn’t believe how terrible the Maple Pecan Danish tasted tonight. Gone is the flaky mouth watering pastry replaced by hard thick dough with no taste. Gross. That’s my last one. My husband can no longer eat the carrot muffin which used to be his favorite. He feels ill afterward.
    What a shame!

  • Gio

    Tim’s , McDonalds , Wendy’s , Burger King , Taco Bell , Olive Garden….et al….how can this be called ‘real food’…you get what you pay for….frozen, pre-packaged, pre-cooked, fake-flavoured, calorie-laden, garbage !

  • mikstik58

    I remember when I was a kid and Tims started. It was the place to go and the freshh smell of the coffee and real fresh made doughnuts they were baking day and night and you had such a good selection. My parents used to pick up a dozen at least once a week. Now with the prefrozen first whenever I go into a Tims I find the selection has diminished and if you go at the right time the shelves are empty. The coffe is definately not that great and now selling out one of the last canadian institutions we really have no pride anymore

  • sandy

    I challenged the American crispy-cream lovers to try Tim Horton’s a few years back. I knew they would have a new favorite – but not now. Sorry, but now I am the one looking for a great donut.

  • maRK

    Go check out the site http://www.thetdlgroupltd.com and see they many failed franchises dating back more than 15 years to today. Couple of posted stories and the fact they hide documents that already state the truth that many franchisees have lost everything and are forced to sign confidentiality agreements so the truth never gets out.

  • Utter Crap in Canada

    Tim Horton’s these days has terrible service and terrible foods. Interesting though, I have noticed they’ve really been pushing their employee’s to be extra friendly (i.e. fake North American b/s), which is just a sales tactic to get people to go back and buy the crap products.

  • Baker/Production

    Yous don’t take into count the fact that Tim Hortons is a growing, busy restaurant. It is impossible to bake from fresh ingredients and meet demands. Donuts alone sell by the dozens at any time. 5 dozen now, 2 dozen 2 minute later. It is a difficult and busy job keeping up with supply and demand as is and is no way possible without restructuring the building size and structure at every location. thus increasing cost, wasting time and money, hiring more staff. if you don’t like it, go to Coffee time….

  • Hank

    The margins aren’t in the donuts and muffins they are in the coffee. The cost of a cup of coffee is about $0.14 and only increases by a small amount as the size increases.

    And to clarify only the donuts and croissants are produced at Maidstone in Brantford. The muffins and tea biscuits are produced by Oakrun Farms in Ancaster and the cookies are done by Rich’s.

  • R. Hull

    The owners are greedy and content because its about money, buckets of toonies and loonies under the office desk from staff meals. Gift cert. (before the gift card) and camp day funds going right to pocket. Millions in tax evasion income and there morals and ethics page is a front of house bullshit. oh ya I have alot of little details. You would be surprised to know just how much a franchisee can get away with.

  • Richard Burns

    I for one would rather have my donuts made on site by members of the community and share to some degree in what is by all accounta a very profitable business

    Now that the subject of profit has come up, what are Tim’s employees earning and could they earn more and have more workers by having skilled or semi skilled baking jobs. The suggestion by one Horton’s insider that the public would be outraged by the profitability means they can likely afford well paid employees

  • Roger That

    There’s nothing fresh in Tim Hortons.
    The coffee is bitter and they haven’t made their own donuts on site in years.
    Frozen, thawed for consumption. There’s nothing fresh about that concept.

  • Dave

    Fresh is not frozen yet the Canadian government allows companies to say such crap without penalty.The reason for the lawsuit is that franchise owners are being charged almost twice as much more from a company to supply them donuts(frozen) than if they were to make them fresh on site.

  • madraili

    every single food item i have had from tim hortons if awful, got food posioning once from the sandwiches…donuts taste like shit, a bagel i have had was rock hard…tossed it in the dumpster and it sounded like a rock haha it has gone wayyy down hill from when i remember it as a kid . , not going there thats forsure
    to bad

  • ScottCA

    I read about this, and its now being taught in college courses as an example of a mistake not to repeat.
    Shame on Tim Hortons for their utter dishonesty in their marketing scheme and their abuse of their fanchisees and their customers.
    All those bakers should have jobs in those stores producing a better product at a lower cost. Tim Hortons is being led by imbeciles.

 

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