Tim Hortons Franchise Analysis 2026

Investment & Fee Data

Investment Overview

Franchise Fee$30K

Total Investment$300K – $700K

Royalty Rate5.5%

Ad/Marketing Fund3.0%

Total Fee Burden8.5%

System Size & Growth

US Locations600

Unit Growth Rate-1.5%

Founded1964

Franchising Since1966

FDD Item 19Yes ✓

🔒 Premium Data Available

Avg Unit Volume (AUV)$1.1M

Owner Earnings$75K

SBA Default Rate7.2%

5-Year Survival89%

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💡 What This Means For You

The combined fee burden of 8.5% is within the industry average of 8-10%. Beyond the listed investment, expect approximately $138K in hidden costs (working capital, legal, insurance, tech fees) — bringing your realistic total closer to $638K.

Financial Performance & Risk Analysis

Financial Performance

Avg Unit Volume (AUV)$1.1M

Net Profit Margin10%

Est. Owner Earnings$75K

Breakeven20-28 months

Payback Period5-7 years

Capital Requirements & Operations

Liquid Capital Required$150K

Net Worth Required$350K

Staff Required15-25

Training8 weeks

TerritoryAssigned territory

Multi-Unit RequiredNo

Term Length20 years

Risk & SBA Safety Data

SBA Default Rate7.2%

5-Year Survival89%

Renewal Fee$5,000

Transfer Fee$7,500

💡 Financial Analysis

A revenue-to-investment ratio of 2.2x is solid and in line with industry norms. At estimated owner earnings of $75K/year, the simple payback period is approximately 6.7 years.

Due Diligence Deep Dive

The data franchise brokers don't show you — real costs, owner lifestyle, franchisee satisfaction, exit options, and FDD transparency.

💰 True Cost of Ownership

Working Capital (6 mo)$80K

Legal & Accounting$15K

Insurance (Annual)$10K

Tech/Software (Monthly)$800/mo

Lease Deposit Est.$20K

Grand Opening$12K

Total Hidden Costs$138K

👤 Owner Reality Check

Hours Per Week50-65

Absentee Owner Friendly?No ✗

Manager-Run Possible?Yes ✓

Seasonal VariationLow

Labor Cost (% of Revenue)34%

Early morning production for breakfast items. 50-65 hours/week for hands-on owner. Moderate complexity with beverage+bakery model.

📊 Franchisee Health

Satisfaction Score62/100 (Fair)

Annual Turnover Rate7.8%

Litigation Count (Item 3)10 cases

5-Year Closure Rate8%

Avg Franchisee Tenure4 years

Franchisee AssociationYes ✓

🚪 Exit Strategy & Resale

Resale Value Multiple1.5-2.2xx earnings

Transfer RestrictionsFranchisor approval required

Non-Compete Period2 years

Non-Compete Radius3 miles

Avg Time to Sell12-24 months

Exit DifficultyDifficult

📋 FDD Transparency Report

Item 19 QualityModerate

Item 19 Includes:

✓ Revenue summary

✓ Cost overview

Territory ProtectionLimited

Territory assigned; limited exclusivity

Required Suppliers?Yes

Supplier Markup RiskModerate

Renewal Terms20-year renewable

🚩 FDD Red Flags & Green Flags

⚠️ Watch Out For:

7.2% SBA default rateNegative unit growthHigh franchisee turnover

✅ Positive Signals:

Established brand heritage600 unit presence

💡 Due Diligence Verdict

Exiting this franchise is rated as difficult. Plan your exit strategy before you buy — not when you're ready to leave.

AI Disruption Risk Assessment

🤖

AI Risk Analysis

See how AI will impact Tim Hortons over the next 5-10 years — threats, moats, and disruption timeline.

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Territory Saturation Analysis

0.18

Units per 100K pop.

0.02x

Saturation Index

vs. Coffee & Beverage avg (8.72/100K)

States with Presence

Low Saturation

Tim Hortons has significant whitespace opportunity relative to its category.

Geographic Distribution

No units

High density

Most Saturated States

State	Units	Population	Per 100K
Wyoming	11	581,000	1.89
Washington DC	12	671,000	1.79
South Dakota	13	887,000	1.47
Rhode Island	15	1,095,000	1.37
Delaware	11	1,031,000	1.07

Least Saturated States

State	Units	Population	Per 100K
California	19	39,029,000	0.05
Texas	19	30,503,000	0.06
Florida	22	23,555,000	0.09
Georgia	11	11,370,000	0.10
North Carolina	12	10,849,000	0.11

Growth Opportunity States

High-population states where Tim Hortons has minimal or no presence — potential expansion territories.

Pennsylvania Tennessee Nevada Arkansas North Dakota

Investment Thesis

Tim Hortons carries a CAUTION signal with a FutureScore of 52/100. A troubled Canadian import trying to expand in the US. Negative unit growth and 7.2% SBA default rate signal struggle. Skip in favor of Dutch Bros or Starbucks.

Ideal Investor Profile: Conservative investor seeking stable income (not growth)

Strengths

Established Canadian heritage600+ US locations provides some presenceBreakfast/lunch daypart diversification$1.1M AUV acceptable for category

Risk Factors

Negative unit growth (-1.5%)7.2% SBA default rate (high)US expansion struggling (Canadian legacy brand)8.5% combined fees (moderate-high)Coffee category saturation

Tim Hortons

What is Tim Hortons?