Tim Hortons Prez Touts Plan to Change Narrative
Product innovation is one of three "pillars" that Tim Hortons President Alex Macedo is touting to franchisees.
When Alex Macedo (muh-SEE-doe) took the president’s role at Tim Hortons in December 2017, he stepped into the midst of franchisee dissent on both sides of the border. Like the executives before him since 3G Capital bought the storied Canadian coffeeshop chain and merged it with Burger King in 2014, at first he stayed in the background.
Starting the first week of May, he’s trying to change the narrative by taking management’s story to the public and to the franchisees. “A lot has been said. It’s not clear to me what’s true and what’s not true,” he said in an interview with FT on May 4, the first he or any other Tim Hortons executive has given about the problems. (I’ll feature the latest battles and Macedo’s responses in the next issue of Franchise Times, but meanwhile present some excerpts from our conversation.)
“Listen, we’ve had a tough time communicating with the franchisees and making clear the plan, and now we’ll have a plan to fix that,” Macedo said.
The plan is called “winning together,”which has three pillars. “One is restaurant experience, which has to do with all the touch points when they’re in our facilities,” he said. In March, Tim Hortons launched a renovation program with a new image. “Our plan is to get 50 percent of the system with the new image by 2021.”
The second pillar is “product excellence, having a great pipeline of superior product innovation,” he said.
Third is “brand communications. It’s talking about your brand position, bringing the best of Canada to the communities we serve.”
I asked him if he viewed his new post as representing a “turnaround” from former executives, who have been characterized among other things as demanding unrealistically aggressive development deals.
“Actually I look at it from a little bit of a different angle. I came into it to make our guests happy about the brand and the franchisees more profitable. One thing depends on the other.”
Macedo joined Burger King in 2011 as head of marketing. “In 2013 I took over as president of North America, and we grew system sales by $2 billion; we doubled franchisee profitability; we remodeled 70 percent of our restaurants. We were opening about 50 restaurants in the United States in 2012; last year we opened more than 225," he said. “So it was really a transformation story, and all along we forged close relationships with our franchisee community.”
The problems at Tim Hortons have been well documented in these and other pages. Macedo believes the complaints are from a loud minority, and the “overwhelming” majority of franchisees are backing the plan he began rolling out the first week of May, with visits to three cities in Canada.
“It’s about openness, transparency and working for increasing profitability and driving guest satisfaction.”
I asked him about complaints that RBI’s mode is to buy companies and slash costs to the bone in order to boost shareholder value, without regard to franchisees. Franchisees at Popeyes, the most recent brand RBI acquired, are starting to join that chorus, I said.
“But that’s not true, because Popeyes is growing double digits in system sales around the world. Burger King is growing same-store sales around the world," he said.
“We’re an efficient company and we’re proud that we keep costs down," he said about RBI. "But ours is totally a growth story.”
I asked, is part of the strategy to get more multi-unit operators who can do more aggressive development deals, and reduce the number of small, one- or two-shop operators? “No, absolutely not,” he said, noting that in Canada, especially, “we have predominantly small operators.”
He declined to specifically address the claims and counterclaims from franchisees. “I can’t unfortunately comment on the legal matters. The allegations are absolutely false, and what we’re going to do is we’re going to work with our franchisees, with our advisory board in the United States” on a number of initiatives “that will increase profitability.”