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]
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.
September 13, 2010 at 11:21 pm | by BenALWAYS 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.
September 14, 2010 at 9:26 am | by TIM DEVLINIf the public can’t tell the difference good product and bad product……….let those “greedy bastards” laugh all the way to the bank.
September 14, 2010 at 9:38 am | by fat chanceI 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….
September 14, 2010 at 10:36 am | by McNotOh…. and BTW, GOOD LUCK in New York! Your gonna need it.
September 14, 2010 at 10:54 am | by McNotRenting 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
September 14, 2010 at 11:35 am | by Les Stewart MBAMidhurst ON Canada
Thanks for the clarification Les Stewart, MBA.
September 14, 2010 at 4:54 pm | by mattagascarI 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???
September 15, 2010 at 11:20 am | by AreThoseReal?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.
September 15, 2010 at 7:47 pm | by Fact finderI 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.
September 16, 2010 at 3:50 am | by ~ Irit Jaye ~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”.
September 16, 2010 at 1:25 pm | by itsmeI 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.
September 16, 2010 at 4:50 pm | by frozenisnotfreshThanks Les Stewart. Do you think anyone cares that you have an MBA?
September 16, 2010 at 5:55 pm | by JimThe 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.
September 16, 2010 at 8:15 pm | by brooklin99I agree, the sandwiches are crap. The croissants taste like bread and they got rid of Tuna!
September 17, 2010 at 4:38 pm | by Darcy walker