Tim Hortons

The franchise fee is $50,000 ($25,000 for non-standard shops). That's at the higher end of the QSR category — matching Jack in the Box ($50K) and Comfort Inn ($50K), significantly above Hardee's ($25K) and Bojangles ($35K). The development agreement requires a $25,000 prepayment on top of the franchise fee. Add a $10,000 training fee and the mandatory $50,000+ equipment package, and you're committing $135,000+ before construction.

The total investment range of $988K to $3.31M is driven by site development ($100K–$1.2M), building ($385K–$1.02M), and equipment ($335K–$500K). Working capital for three months is just $25K–$42K — the lowest in the comparison set outside Steak 'n Shake, which may be tight for a café-format business requiring labor-intensive operations from day one.

Ongoing: 6% royalty plus 4% advertising fund — 10% total. Plus a mandatory refurbishment cost every 5 years (amount not specified but restaurant refreshes in the fast-casual category typically run $50K–$200K). The annual Tim Horton Children's Foundation donation is a fee listed in the FDD — a charitable commitment built into the franchise agreement that adds to the cost stack. The effective fee burden including refurbishment amortization and charity fees is likely 11–12% of gross sales.

Tim Hortons discloses Item 19 data from 585 U.S. franchised restaurants. Average annual gross sales are $1,294,140; median is $1,237,464. The $57K median-to-average gap is small, indicating consistent performance across the U.S. system.

At median revenue of $1.24M and 10% fee burden, annual payments to the franchisor are $123,700. The café/coffee format (Tim's core product mix of coffee, teas, donuts, sandwiches) typically generates 18–24% operating margins on this revenue level. At 20% on $1.24M, operating income before debt is $247K. Against a $2.1M midpoint investment, payback runs 8–10 years — the 13.8-year derived figure suggests more conservative margin assumptions that account for the high fee burden and refurbishment costs.

The U.S. Tim Hortons opportunity is fundamentally about geography: the brand's strongest U.S. markets are Great Lakes states (Michigan, Ohio, New York) with proximity to Canada where awareness is highest. A Tim's in Buffalo, NY outperforms a Tim's in Phoenix, AZ by a margin that the Item 19 national median can't capture. Location intelligence — specifically proximity to the Canadian border and established U.S. Tims markets — is more predictive than the system average.

Tim Hortons U.S. has been consistently growing: 642 units in 2023, 663 in 2024, 693 in 2025. In the most recent period: 42 new openings against just 13 closures — the strongest opening-to-closing ratio in this comparison set alongside Buffalo Wild Wings GO. Unlike most growing brands where closures are hidden behind headline growth, Tim's 3.2:1 opening-to-closing ratio reflects genuine system health.

The brand is owned by Restaurant Brands International (QSR: NYSE), which also owns Burger King and Popeyes. RBI is a significant franchisor with deep development experience and marketing scale. The Tim's global system has 5,700+ locations — the U.S. program at 693 units is in growth mode, not maturity, which means development support and marketing investment should remain active.

The competitive context matters: Dunkin' has 9,500+ U.S. locations with deep market penetration and a loyalty app with millions of users. Tim Hortons wins on brand strength and value positioning, but it's fighting for the same morning daypart against a competitor with 13x the footprint. Tim's differentiator is authentic Canadian heritage and a specific customer base (Great Lakes, northeastern U.S., Canadian expats) that Dunkin' doesn't fully serve.

The 5-year mandatory refurbishment requirement is the most expensive ongoing obligation that doesn't appear in the fee percentage. Restaurant refreshes run $50K–$200K in QSR — and for Tim's, maintaining brand standards in a growing system means corporate specifications will evolve. The FDD discloses this obligation but doesn't quantify the cost. Over a 20-year franchise term, budget for three to four refurbishment cycles of $75K–$150K each — an additional $225K–$600K in capital requirements beyond the initial investment.

The $50,000 mandatory equipment package for standard shops suggests Tim Hortons controls the equipment spec tightly. Like McDonald's, this creates vendor lock-in and limits your ability to competitively bid for equipment. When Tim's requires a new equipment standard, you pay whatever the mandated supplier charges.

The U.S. geographic concentration risk is real: Tim's strength is in markets with Canadian cultural connectivity (Buffalo, Detroit, Cleveland, Columbus). Buyers in markets without that base — Dallas, Houston, Atlanta, Phoenix — are building brand awareness from scratch in a market where Dunkin' and Starbucks already own the morning mindset. The Item 19 median of $1.24M almost certainly overstates expected performance for a first-entry location in a non-trad market.