Tim Hortons offers career counseling to employees

David Morelli, a spokesman for the company, said that although franchise owners, not the company, are technically responsible for providing severance benefits to their employees, Tim Hortons had decided doing so would be "the right thing to do."

November 12, 2010

Tim Hortons offers career counseling to employees
Ian Holliday


Tim Hortons at the corner of High and Oak streets in Westerly is among the casualties. DANIEL HYLAND / SunPhotos

When local Tim Hortons employees went to work Wednesday, they had no reason to expect that by Thursday they'd be out of a job, but that's exactly what happened.

The company announced Wednesday night that it had closed all of its full-service stores in Connecticut and Rhode Island, and would be closing the rest of its locations in the two states, mainly self-service kiosks in gas stations, in the near future.

Employees and franchise owners met with Tim Hortons representatives Thursday in meetings around the two states, including one at the Mystic Marriott. The meetings were held to discuss severance packages and other services the company would be offering.

One former employee of a Stonington-area Tim Hortons, who spoke on the condition of anonymity for fear of jeopardizing her severance pay, said she was "blindsided" by the decision to close.

"I'm at a loss for words," she said.

Stonington First Selectman Edward Haberek Jr. said he was "very disappointed" by the news of Tim Hortons' decision.

He said he had spoken with Steve and Cynthia Forster, owners of the downtown Pawcatuck and Mystic Tim Hortons stores, to express his condolences and thank them for their commitment to the town.

"Steve and Cynthia have been tremendous community members," Haberek said. "It's going to be difficult … Those places were institutions, even going back to when they were Bess Eaton."

David Morelli, a spokesman for the company, said that although franchise owners, not the company, are technically responsible for providing severance benefits to their employees, Tim Hortons had decided doing so would be "the right thing to do."

Morelli said employees had been offered career counseling, while franchise owners had been offered the opportunity to relocate to one of the 300 new U.S. locations the company plans to open in the next four years. He said the company has already heard from some franchisees interested in relocating.

"We're doing our best to take care of them," Morelli said. "These are people who had really made every effort to help make Tim Hortons successful."

A total of 36 full-service Tim Hortons stores in New England have been closed. That figure includes 20 in Rhode Island, 11 in Connecticut, two in Portland, Maine, and three in southeastern Massachusetts.

Morelli said the company owns or rents all of the buildings that house its restaurants, which means former franchise owners will not be responsible for either selling the properties or reopening them as other businesses.

Haberek said the Pawcatuck and Mystic locations had been rented by Tim Hortons, and will likely be reopened as restaurants.

"I look forward to working with the owners of those locations to bring new restaurants to those downtown areas," Haberek said.

In its third quarter earnings report, released Wednesday, Tim Hortons said it had lost $4.4 million on the 36 now-closed locations since they opened. The Canada-based coffee chain opened its first Rhode Island locations in 2004, when it purchased Bess Eaton, which was headquartered in Westerly.

Tim Hortons' Morelli said stiff competition from similar businesses made it hard for the Canadian company to break into the region.

"It was just a highly saturated market of quick service restaurants," he said. "It was not just one competitor. There were several. This also allows us to reinvest and focus resources and money from those areas into our growing markets."

Tim Hortons moved into southeastern New England in 2004 when it paid nearly $42 million for 42 coffee shops belonging to the Rhode Island-based Bess Eaton chain of coffee shops. It previously closed about 15 of those shops in 2008.

Morelli said the company doesn't know how may people are losing their jobs because they were employed by local store operators. He said the company was working to find positions elsewhere in the company for the 11 affected people employed directly by Tim Hortons, and said the company also hopes to relocate some franchisees.

Sharon Doyle, a Tim Hortons employee who attended a meeting of laid off workers Thursday in Warwick, told Providence station WJAR-TV that she and her coworkers received no notice.

"We're out of a job and it's five weeks to Christmas, Thanksgiving," she told the station. "These people have families they have to support."

Tim Hortons is left with 567 locations in the United States, and plans to open 300 more stores by 2013, Morelli said.

It has 3,100 locations in Canada.


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