Cyril Garland claims that the company has resorted to “harassment” and issued repeated “threats and reprisals.” Hortons has already declined to renew the licence on one of his stores and “other franchisees are, quite rightly, fearful of the same consequence should they express any sort of adverse opinion.” Arch Jollymore has endured even worse (if the evidence is accurate). It was during an Advisory Board gathering in July 2008, right after he filed his suit, that he claims Paul House uttered his infamous threat: “If I had a gun, I’d shoot the bastard.” Jollymore also claims that a Toronto franchisee recently “suggested that I should be caused physical harm” for forcing owners to reveal their profit margins.
For the record, House has authored his own affidavit, but it is among thousands of pages of evidence that, like the profit margins, have yet to be filed by Tim Hortons.
In the meantime, the main players aren’t talking. Garland and Jollymore declined to be interviewed for this article. So did Graham Oliver and most of the other “concerned franchisees.” Those who did speak were brief. “I can only say that the Always Fresh system improved our profitability and has made our life much easier,” says Brent Gabbani, an owner from New Liskeard, Ont. Miles Mattatall—the Advisory Board member who wrote that Jollymore “has the same goals that we all do”—says he does “not know of any franchisee” who want to go back to the scratch baking days. “I personally have a great working relationship with TDL,” he told Maclean’s in an email. “And if I could buy more restaurants, I would.”
Head office isn’t granting interviews, either. David Morelli, Hortons’ director of public affairs, said the company will “politely decline” to comment while the case is still before the courts. However, Tim’s side of the story is laid bare in a publicly disclosed affidavit authored by David Clanachan, a long-time executive who oversaw the Always Fresh conversion.
“I truly believe that anyone with an appreciation of the Tim Hortons business model and the facts will conclude that the claim is completely baseless,” Clanachan wrote. “It is unsupported and unsupportable by the actual facts.”
Clanachan says every store owner—with the exception of Garland and Jollymore—understands that although the price of the frozen donuts are higher, franchisees have benefited from the convenience and the obvious labour savings. “Always Fresh Baking was and remains a business and economic success for every reasonably diligent franchisee,” he wrote. “The store margins have not been hurt by Always Fresh Baking. In fact, the margins are the same or better.” (Clanachan also denies that he or House ever told the owners that the new price of an unfinished donut would not exceed 12 cents.)
So why is Garland so adamant that the opposite is true? He is “an embittered franchisee” with “an unremittingly bad attitude,” Clanachan says. “We simply hear him out or read his memos and as politely as we can register disagreement and move on. Garland has major blind spots but he is not a stupid man and I am sure the situation is as frustrating to him as it is to us.”
And Jollymore? “As to why (if it is true) Jollymore hasn’t achieved labour savings when the average Ontario store owner has been able to, I can only say that it is likely that it stems from his abilities as a manager and a failure to follow the training provided with the necessary discipline,” he wrote.
Clanachan also addresses the issue that matters most to customers: the quality of the current donuts. Jollymore claims that the frozen versions have “a shorter shelf life,” and some do “not have the same aroma or taste.” Says Clanachan: “Our experience does not bear out this assertion.” To the contrary, he says Hortons has “received more positive comments about the aromas in the stores since Always Fresh Baking, since product is cooked more often.”
One man would certainly disagree: Ron Joyce. In his book, the Hortons founder writes that although the frozen donuts “have improved greatly” since they were first introduced, “they will never be as good as the fresh product we prepared completely in the stores.”
Near the end of his autobiography, Joyce also seems to foreshadow the current legal battle. “Since my departure in January 2001, senior management at Tim Hortons has begun altering its relationship with franchise owners by placing pressure on their margins,” he wrote. “When I owned the company, the number one customer of TDL was the restaurant owner. They were the backbone of the company; they were what made the system work. They are on the front lines, dealing face to face with the customer, and are therefore integral to the company’s success. Any change to that could have dramatic ramifications for the company in the long run.”
Like his cousin, Joyce declined an interview request. But Aileen O’Rafferty, the president of his charitable foundation, did pass along this message: “He still strongly believes in that statement and stands by it today.”
