The franchise owner for Tim Hortons in St. Louis is closing down two locations amid a fight with the chain’s new ownership, though the O’Fallon location is safe for now.
Tim Hortons on Tucker Boulevard and in the Central West End closed over Thanksgiving, putting 24 people out of work two years after opening, according to news reports.
“The closings are directly related to the failure of … Tim Hortons USA to meet its obligations in its agreements with Show Me Hospitality,” read a statement posted on Tim Hortons STL’s website.
The other locations will remain open for now, including the O’Fallon location, according to Eric Sigurdson, president of franchisee Show Me Hospitality.
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“It saddens us to close restaurants,” Sigurdson said in his statement. “The agreement we signed with the original ownership group was fueled by a deep passion for the Tim Hortons brand. Our franchisor’s repudiation of its obligations under the original agreement derailed our business plan and scared off great new partners, leading us to have to evaluate our operations and locations, both now and in the near future.”
Sigurdson told the Post-Dispatch that his original contract with Tim Hortons agreed to open 40 locations in five years, with an option for 90 in 15 years. But then Tim Hortons was purchased by Burger King, which was then purchased by a Brazilian investment group named 3G Capital.
The new owners then wanted a new agreement for 205 restaurants within 10 years, Sigurdson said, and he is now in federal court pressing a $50 million lawsuit over the requested changes, according to the St. Louis Post-Dispatch.
When Sigurdson wouldn’t agree to a new contract, he alleged, Tim Hortons suspended its national marketing in St. Louis and began charging unreasonable mark-ups on equipment, and refused to approve cart-style kiosks at Ballpark Village, the Saint Louis Zoo, and Gateway Motorsports Park in Madison.
The other locations remaining in operation are in Maplewood, Lafayette, and Frontenac, Missouri, as well as O’Fallon, Illinois.