Delivery delays hit Tim Hortons franchisees as company announces new HQ

TORONTO — Some Tim Hortons franchisees are experiencing a delay in receiving supply deliveries from the fast food giant.

The company’s president Alex Macedo told the Canadian Press on Tuesday that upgrades and changes to its supply chain distribution centre were causing trouble with shipping out products.

The delays are the latest irritant in the relationship between franchisees and Tim Hortons, its parent company Restaurant Brands International and subsidiary TDL Group. In recent months, the two sides have tussled over everything from cost-cutting measures to a class-action lawsuit over the company’s alleged improper use of a $700 million national advertising fund.

Macedo said the company recently ”fell behind” on getting products out to franchisees, but the delays are “within the acceptable range” for a transition of this nature.

“There’s no shortage of any of the critical items,” he stressed. “We expect in the next five to seven days everything is back to normal.”

He was equally hopeful about the company’s relationship with restaurant owners, saying that Tim Hortons has a “good” rapport with the franchisee advisory board that represents all the owners.

“We still have a lot of work to do, but as we drive profits and sales we expect the relationship to get better,” he said.

Those remarks came days after a spokesperson for Innovation Minister Navdeep Bains revealed the federal government would investigate allegations that RBI failed to live up to promises made under the Investment Canada Act in 2014. A letter to Bains from the Great White North Franchisee Association, a group representing at least half of the Tim Hortons franchisees, cited maintaining franchisee relationships, the rent and royalty structure for five years and existing employment levels at Tims franchises across Canada as issues.

On Tuesday, Macedo said, “We have responded into Ottawa each and every year with everything we have done and we are happy to co-operate if anything comes up.”

Earlier in the year, Macedo and Tim Hortons faced intense criticism after two Cobourg, Ont. franchises moved to offset Ontario’s recent minimum wage hike by cutting paid breaks and forcing workers to cover a bigger share of their benefits. The move caused some customers to vow to boycott the brand.

Tensions flared again in late February when GWNFA threatened legal action against Tim Hortons after some franchisees experienced intermittent cash register outages that forced them to partially or fully shut down some stores.

In April, they were arguing over an outspoken franchisee, previously involved in a class-action lawsuit over the company’s alleged improper use of a $700 million national advertising fund. GWNFA accused the company of intimidation after it allegedly denied the franchisee a licence renewal for one of his two Tim Hortons locations.

Macedo didn’t directly refer to any of the incidents when asked whether Tim Hortons was doing anything to smooth over relations with the restaurant owners, but he stressed that the company “works closely” with franchisees.

He also mentioned that the company is moving its headquarters from Oakville, Ont. to a 6000 square-metre (65,000 square-foot) space in the Exchange Tower in Toronto’s financial district.

Macedo said the move will bring it closer to business partners, enable it to better use technology to serve customers and help it keep abreast of industry trends.

“Consumer trends are changing very fast. We want to remain an innovative company,” he said. ”We want to be able to react to guest changing behaviours so we thought being positioned in Toronto would allow us to do that.”

Macedo said all 400 employees at the Oakville headquarters will be transferred to the Toronto location at the end of the year, but the company’s “Tims University” training centre will stay put.

The company, he noted, has been situated in Oakville for more than 50 years, making the move a “very exciting moment.”

“It is a bittersweet feeling in the sense that Oakville has been so good for our brand and our community for such a long time,” he said. ”We feel this is a big investment on our part, but we feel it is the right thing to do to get closer to our guests and to make sure we run the business well for our restaurant owners in the future.”

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