It has everything to do with Tfw.
Tim Hortons: The Canadian icon Canadians won't work for
Tim Hortons is a Canadian icon a great number of Canadians don’t want to work for. It’s not just Timmies that’s having trouble finding domestic workers, of course. Across the country, restaurants complain they can’t fill openings. Much of the focus has rightly been on the question of whether restaurants should be paying more to attract Canadian workers. But at the core of the issue is a problem that’s been mostly overlooked: Many restaurant chains now rely on a business model based on blanketing the landscape with locations in order to generate growth. It’s a fundamentally flawed strategy, and Tim Hortons is only the most obvious example.
You can see this play out by looking at the chain’s same-stores sales figure, which reflects the performance of only those stores that have been open for at least 13 months. It’s a handy measure that lets investors peer through all that dust from new-store construction to gauge the underlying health of a chain. In the case of Tim Hortons, average same-store sales have been deteriorating for years. In its most recent quarter, Tim Hortons posted overall sales growth in Canada of five per cent. But same-store sales grew just 1.6 per cent. Were it not for the 160-odd new stores added over the previous 12 months, Tim Hortons sales and profits would likely have been considerably less.
Tim Hortons’ chief coffee slinger knows he has a problem. In February, while unveiling a new growth plan, Caira warned that opening more stores can’t be the company’s only path to growth. More product innovation is needed, he said, and he vowed that Tim Hortons’ long-struggling expansion into the U.S. would finally start to pay off, with profits rolling in by 2018.
Then, to no one’s surprise, Caira announced another massive round of expansion: 500 more stores in Canada over the next five years. (The chain already operates 3,600 locations here, almost all of them owned by franchisees, up by half from a decade ago.) The message was clear: The old growth strategy may be broke, but while we fix it, here’s another restaurant 500 m closer to wherever you happen to be right now.
Now here’s why this matters to the TFW debate. A growth model that relies on opening vast numbers of new stores every year also relies on nearly unfettered access to cheap labour to keep profit margins from getting crushed. Tim Hortons has regularly said as much in its annual reports, in the section where it lists all the potential risks to its business: Any labour shortage due to “the cessation or limitation of access to federal or provincial labour programs, including the temporary foreign worker program,” could lead to declining revenues, profits and brand reputation.
In the past, Tim Hortons has said it employs around 4,500 temporary foreign workers, equal to about five per cent of its 100,000-strong workforce. That may not seem like a lot, but think of that temporary labour force as a release valve when local labour markets overheat with the addition of new stores. Then multiply it by all the other chains pursuing a similar strategy. You quickly arrive at an industry dependent on TFWs to fuel its exponential expansion. The question is: Since when did it become the job of government to subsidize flawed business models?
Tl/Dr businesses like Tim Horton's makes profits by saturating the market with franchises. The model is one which cannot be indefinitely supported as existing stores lose revenue because the market is over saturated with franchises. One way to offset costs and growing losses for stores is using tfw whom they can pay less and obtain secondary incomes through their food, board and handling of applications.
