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Tim Hortons reportedly closing in Brainerd: Coffee-doughnut eatery shutters amid statewide rollback, corporate infighting

Tim Hortons in Brainerd is expected to close at the end of day Tuesday, May 28, following multiple reports from customers who said they were told of the closure by employees. Steve Kohls / Brainerd Dispatch

It looks like it's the end of the line for Tim Hortons—at least in Brainerd, anyway.

Multiple customers reported to the Dispatch they were told by employees of the coffee and doughnut shop on 520 Washington St. it would shut its doors for the final time at 6 p.m., Tuesday, May 28. Employees declined to address requests from the Dispatch, noting "(they) weren't supposed to talk about that," directing inquiries to the corporate office.

Brainerd's closure comes on the heels of a statewide rollback by the Canadian powerhouse after an ambitious Minnesota push in 2016 sputtered out and cracks emerged amid business dealings between franchisee ownership group Tim-Minn Inc. and Tim Hortons. The two partners are currently in legal proceedings against each other after allegations of impropriety were leveled by both sides. All Tim Hortons across the Twin Cities metro area have closed down, while in Greater Minnesota, Bemidji's location was set to close Tuesday and International Falls shuttered Monday.

In a statement to the Dispatch, Jane Almeida, head of brand communications for Restaurant Brands International Inc., the U.S. arm of Tim Hortons that also operates Burger King, expressed dissatisfaction in Tim-Minn's decision to shutter stores across Minnesota. Originally slated to open 280 locations in the state, the company's 14 operating locations are rapidly dwindling in recent months.

"We are disappointed the franchisee made the decision to close these restaurants without our approval," Almeida wrote in an email. "Since we have a pending dispute with this particular franchisee, we decline to comment further at this time."

Despite dominating Canadian markets, the company has struggled in the United States. Since 2015, the year after the chain's merger with Burger King, Tim Hortons' U.S. sales have fallen by 17%, including a 5.1% decline in 2018, according to data courtesy of management consulting company Technomic.

As the Dispatch previously reported, during the Tim Hortons ribbon-cutting in winter 2016, Paul Durigon—CEO of Restaurant Development Partners, the developer of the Tim Hortons brand in Minnesota—said he hoped people would give the restaurant a chance.

"It just feels like the demographics and character of the town feels a lot like Canada," Durigon said at the time. "It just felt like it was a good area to locate. We thought a lot of Brainerd, putting it in our top five. It just felt like it was a good area to locate."

While the local presence of the company struggled to gain a foothold, the relationship between its statewide and international parent corporations rapidly deteriorated.

In a civil complaint filed Wednesday, Feb. 20, Tim-Minn said Tim Hortons USA Inc. and its parent, Restaurant Brands International Inc., "took advantage" of the new franchisee's inexperience. The complaint alleges the Canadian company charged high markups on supplies and sold used equipment to Tim-Minn restaurants at current market value.

"They baited my client with these figures from the data pack (or market analysis), which had no basis in reality," said Tim-Minn's lawyer, Jerry Marks of the New Jersey-based firm Marks & Klein LLP, in a statement to the Financial Post. "My clients have been operating these 14 stores ... and they don't produce the type of income that the data pack said they would produce."

Gabriel Lagarde

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