The article discusses the positioning of Tim Hortons expansion relative to how Burger King expanded under its new ownership.

Appropriate Subject Area(s):

Marketing, business ownership, finance

Key Questions to Explore:

• What is the relationship between profit and sales?  What impacts an organization’s ability to generate profit?

New Terminology:

• Softness in the market, food-at-home deflation, master franchise agreement

Introduction to lesson and task:

This lesson is designed to help students understand some of the challenges faced by franchisees and franchisors with respect to profit and loss.

Action (lesson plan and task):

• Ask students if they go to Tim Hortons. How often? For what? What are their expectations when they go?
• Review franchising as a form of business ownership. What are the key elements in franchising? What are the advantages and disadvantages?
• Distribute the article for reading.
• In pairs, have students record responses to the following questions:
  • What does “overall softness in the so-called quick-service restaurant sector” mean?
  • Speculate on the reasons.
  • Discuss why McDonald’s has been able to exceed growth expectations if eating at home is the cause of the decline in growth for Tim Hortons and Burger King.
• Have students share their responses with the class.
• What strategies can be applied that result in profit increasing while sales are not increasing at the same pace?
• Restaurant Brands, the new owner of Tim Hortons is moving to align its franchising methodology with that of Burger King, which it has owned for sometime. What steps are they taking to do this? How does this impact the franchisee’s ability to earn?

Consolidation of Learning:

• Using a T chart, have students differentiate between a master franchise agreement and an individual franchisee.
• Following that, have students discuss the advantages and disadvantages of each.

Success Criteria:

• Students understand how activity affects profit and sales in an organization.

Confirming Activity:

• In pairs, have students prepare a poster outlining factors important to guests in the quick-serve restaurant sector. Have each pair explain their poster to another pair, outlining how these points impact profit and sales.