Tim Hortons’ profit slipped amid high inflation, commodity costs in latest quarter
Global News
Restaurant Brands Internationalsaid the average Tim Hortons restaurant in Canada made $220,000 last year in earnings before interest, taxes, depreciation and amortization (EBITDA).
Tim Hortons’ parent company released new financial figures on Tuesday for the coffee and doughnut chain’s locations in Canada that appear to illuminate concerns raised by some franchisees about restaurant-level profitability.
Restaurant Brands International Inc. said the average Tim Hortons restaurant in Canada made $220,000 last year in earnings before interest, taxes, depreciation and amortization (EBITDA), with the average franchisee owning four locations.
The last time the company revealed restaurant-level figures was for 2018, when the average location earned $320,000 and the average franchisee owned 3.5 locations.
The numbers suggest Tim Hortons franchisees earned on average $880,000 before interest, taxes, depreciation and amortization in 2022, a drop of more than 20 per cent from $1.1 million four years ago.
The slipping profit has become a mounting issue among some franchisees.
Restaurant Brands executive chairman Patrick Doyle, who was appointed to the role in November to “accelerate growth for franchisees and shareholders,” said the company will now disclose restaurant-level EBITDA annually to “elevate our accountability to our franchisees.”
Restaurant profits are down due to recovering traffic post-pandemic, all-time high commodity cost increases and soaring inflation, he said.
The company has a plan to improve profitability but franchisees also need to “do their own part,” said Doyle, who is credited with leading a transformation at Domino’s Pizza in his former role as CEO of the chain between 2010 and 2018.
