All four remaining Tim Hortons doughnut and coffee shops in the St. Louis area permanently closed Saturday afternoon.
Eric Sigurdson, president of Show Me Hospitality, the local franchisee for the Canadian restaurant chain, confirmed the closures to the Post-Dispatch.
The closings — affecting locations in St. Louis, Maplewood, Frontenac and O’Fallon, Ill. — are the result of a legal dispute between Show Me Hospitality and Tim Hortons USA, Sigurdson said.
When Sigurdson’s Show Me Hospitality signed a franchise agreement with Tim Hortons in early 2014 to bring the chain to St. Louis, the franchisee agreed to open 40 standalone restaurants and smaller spaces within arenas or hospitals in the St. Louis region over five years, with an option to add 90 restaurants in 15 years. The expansion to St. Louis at the time was part of a larger push by the chain to add 300 U.S. restaurants by the end of 2018.
But before Show Me Hospitality opened its first location, Tim Hortons was acquired by Burger King, then became a subsidiary of Restaurant Brands International, a company controlled by Brazilian investment group 3G Capital.
After the change in ownership, Sigurdson alleges, Tim Hortons representatives wanted Show Me Hospitality to commit to open 205 restaurants in the St. Louis area within a decade and invest $20 million in capital, which was not part of the initial agreement.
Tim Hortons slowed down its process for approving new sites in the St. Louis area after Show Me Hospitality refused to sign a new franchise agreement, according to a lawsuit Show Me Hospitality filed against Tim Hortons USA in federal court in Miami in July.
Through their attorney, Tim Hortons USA has declined to comment on the litigation.
In late November, Show Me Hospitality closed Tim Hortons in downtown St. Louis and the Central West End but said at the time the remaining area locations would remain open.
“They responded to our two closures by terminating all of our agreements,” Sigurdson said, adding the terminations meant his company could no longer receive supplies to operate the stores here.
“Under this new ownership things have changed drastically,” Sigurdson said. “We have not had the kind of marketing support that was required in this market. We’ve been challenged to run the restaurants on an unprofitable basis.”
Those difficulties were reflected in public records, which showed the Missouri Department of Revenue revoked Show Me Hospitality’s sales tax license this year. Businesses’ sales tax licenses are revoked for failure to remit sales tax collected from customers or failure to remit income taxes withheld from employees.
About 50 employees worked at the remaining Tim Hortons restaurants. Sigurdson said he will work with them to find employment opportunities elsewhere.
By Lisa Brown
(c)2017 the St. Louis Post-Dispatch
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