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I was always brought up to study hard, go to university, get a stable job. I have achieved all, but as i get older, i get more and more disillusioned by the corporate rat race and long to do my own thing. So as i sip my double double, i am increasingly intrigued by the pay-offs of franchising , for example franchising a tim hortons. The cash flow seems to be significant. Not knowing anything about what this entails, would anyone be willing to educate me as to the pros and cons. Some questions i have:

1. What are the costs of franchising? How much do you have to put as a downpayment? How much does a reasonable franchise cost?
2. I hear that there is a waiting list to buy a good franchise at a good location which can be a few years long. True?
3. There are lots of issues with ppl stealing money etc. and managing the day to day affairs, i can imagine this to require significant monitoring...

4. What do people think of developing a franchise as a passive income stream? What are the pros and cons (other than the obvious cost of paying someone to run a franchise)? I think i really would get bored running this myself.

Any answers would be appreciated.
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I have an aquaintance who has 4 Tims locations.

Believe me when I say this...they are not passive income. He has worked very hard for many long years. And still has to oversee the day to day operations, banking and staffing. They are profitable, but I think only b/c he is on top of things.
 

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There are answers to many of your questions if you go to Tim Horton's website and search for their franchising info. If I recall, from when I looked a year or so ago, franchise costs varied but were typically ~$400k. (It's the building cost, however, which is the real killer, as its cost depends largely on where you live / where you're planning to build.)

3. There are lots of issues with ppl stealing money etc. and managing the day to day affairs, i can imagine this to require significant monitoring...

4. What do people think of developing a franchise as a passive income stream?
Well, as per your question #3: yes, it would probably require significant monitoring, but thankfully, you'll be working behind the counter every day, so that shouldn't be a problem.

With respect to question #4: Tim Horton's won't allow you to buy a franchise and let someone else run it. They're very specific, on their website, about the fact that they expect you to quit your current job, attend training for a few weeks/months at their corporate training headquarters, and then get to work at your donut store.

(This is all, of course, assuming that they approve you.)


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There are answers to many of your questions if you go to Tim Horton's website and search for their franchising info. If I recall, from when I looked a year or so ago, franchise costs varied but were typically ~$400k. (It's the building cost, however, which is the real killer, as its cost depends largely on where you live / where you're planning to build.)
WOW! $400k? Inflation sure is a killer.

When I looked into this about 5 years ago with my dad, you needed $250k cash, then on top of that, needed additional assets (not as collateral but I believe they wanted you to demonstrate you weren't putting all your 'donuts' into one Timmy's franchise).

Maybe we should wade into the Tim's vs. Timmy's name debate also? :p
 

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The only income sources I can think that come even close to passive is dividend stocks and to a lesser degree RE flipping.

Dividend stocks will require some monitoring on a weekly/monthly basis and there's always risk of yield cuts but, other than that, it's fairly passive.
$400K invested in dividend stocks instead of a TH store should give you decent passive income at a fraction of the effort compared to managing a TH outlet.

RE flipping requires some effort in terms of working with lawyer, banks, etc. and in renovating, fixing, painting the property before flipping but again it's a fraction of the effort compared to managing a retail outlet like TH or Subway.
 

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Maybe we should wade into the Tim's vs. Timmy's name debate also? :p
Note that here in Québec at least, they have to call it Tim Hortons (without any apostrophes), because the apostrophe would make it English. The signs all lack the apostrophe; I rarely travel in Canada outside of Québec so I don't know if this is true in other provinces as well. I think the same thing happened with Ogilvy; at one point it was Ogilvy's and they got in trouble for that. I'm not sure how Second Cup got around it; maybe they were grandfathered somehow, but they don't have to call themselves Deuxième Tasse.
 

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Note that here in Québec at least, they have to call it Tim Hortons (without any apostrophes), because the apostrophe would make it English. The signs all lack the apostrophe; I rarely travel in Canada outside of Québec so I don't know if this is true in other provinces as well. I think the same thing happened with Ogilvy; at one point it was Ogilvy's and they got in trouble for that. I'm not sure how Second Cup got around it; maybe they were grandfathered somehow, but they don't have to call themselves Deuxième Tasse.
It's Tim Hortons without an apostrophe here in Ontario as well. But a Tims franchise will be a lot of hard work. I wouldn't call it passive income at all.
 

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The problem is the trade-off. If you invest in a higher risk franchise then it will cost less and perhaps they will allow you some rights and input. If you invest in a lower risk franchise (like Tim Hortons) it will cost you a fortune and your say will be almost meaningless.

When your Tim Hortons goes up, you will think that area needs one badly and the other franchise owner, 6 blocks away is just a complainer. When 10 more go up later, about the same distance away, you will become the complainer. Oh well, no one will listen anyway and you won't be able to do anything about it, so I guess it doesn't really matter.
 

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Tims

I have a friend with multiple (12 and counting) tims, and he and his wife work their collective arses off.

What I CAN say is I bet he could have retired 5 years ago at the ripe age of 35 and counted his money full time.
 
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