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A47/100FDD 2025
Tim Hortons — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Elevated Risk
13 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
13
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
47 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
26
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$14.6M
Avg loan size
$563K
Participating lenders
14
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 47/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-0.3% YoY) signals system contraction and potential market saturation
- 02MEDNo disclosed net income data prevents ROI validation; average revenue of $105,737 is extremely low for QSR and insufficient to cover typical operating costs
- 03HIGHMultiple active litigation cases including breach of contract, class actions on promotions/advertising funds, and no-poach settlements indicate systemic franchisor-franchisee disputes
- 04MINORNo protected territory creates direct competition risk from other Tim Hortons franchisees in same market
- 05MEDHigh royalty rate (4.5-6%) combined with undisclosed profitability suggests razor-thin or negative margins for franchisees
- 06MINOR20-year term locks capital with declining brand momentum in core Canadian market
- 07HIGHGoing Concern = False indicates potential financial instability at corporate level
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.