Tim Hortons Inc. executives have been grounded.
The iconic coffee-and-doughnut chain has put up for sale its Gulfstream 100 business jet following its recent merger with U.S. fast-food giant Burger King Worldwide Inc.
“It is listed with us,” said Jamie Spears, head of Toronto-area aircraft dealer and broker J.A. Spears & Associates.
The sale marks the latest cost-cutting move since last year’s merger of Oakville, Ont.-based Tims and Miami-based Burger King under the name Restaurant Brands International Inc., majority owned by Brazilian private equity firm 3G Capital Inc.
In January, about 350 jobs at Tims Hortons’ head office, regional offices and distribution centres were slashed.
3G and the chief executive officer of Restaurant Brands – 34-year-old Daniel Schwartz – are notorious for their single-minded dedication to efficiency and cost controls, including staff cutbacks and fat-trimming at acquired companies. Mr. Schwartz – a 3G executive – was put in charge of engineering a turnaround at flailing Burger King before being appointed CEO of Restaurant Brands.
It nixed corporate jets at H.J. Heinz Co. after its 2013 takeover and at Burger King after a 2010 deal. After the Heinz transaction, made in partnership with legendary investor Warren Buffett, the 105-year-old ketchup plant in Leamington, Ont., was shuttered, putting about 740 people out of work.
After the 2008 merger creating global giant Anheuser-Busch InBev SA, Anheuser-Busch executives were told they could no longer get free cases of beer, according to reports. Well-appointed offices for Burger King executives – known as Mahogany Row – were done away with and staff told to use Skype for long-distance calls instead of running up fees on their mobile phones, Bloomberg said.
“3G has made a decision and I respect it,” said Mr. Spears, who rebuffs criticism that business jets are just a costly luxury item for pampered executives.
For former CEO Ron Joyce, axing the Gulfstream is “not a big deal, is it?
“What they’re doing is cutting overhead,” said Mr. Joyce, who joined the fledgling Tims in 1965, a year after the first shop in Hamilton was opened by Toronto Maple Leafs star Tim Horton.
Mr. Joyce, an aviation enthusiast who runs his own jet charter operation out of Hamilton, said that having an executive plane made sense when he was travelling huge distances across Canada building the Tims chain, but that it is now harder to justify.
“It was a necessary tool for me to get around all over the country,” he said in a telephone interview.
Selling the six-seat Gulfstream – which goes for about $4-million (U.S.) used – is “a prerogative of [the new owners],” Mr. Joyce said. “They see things where they think they can save money.”
“We politely decline to comment” about the status of the business jet, Tims spokeswoman Michelle Robichaud said in an e-mail message.
Calls to a public-relations firm for Restaurant Brands International and to Burger King were not returned.
Patrick Horan, a principal at Toronto-based Agilith Capital Inc., said it makes sense for Tims to sell its jet.
“That’s smart by 3G. You have to ask yourself, ‘Why would Tim Hortons have a jet?’ It’s pretty clear it’s just a big perk. Good for 3G for doing that.”
Tims has made headlines before with its business jet. In 2007, the company said it was reviewing a policy allowing management to make use of the plane for personal trips. It did so after disclosing in securities filings that two members of its executive team used the Gulfstream for flights not related to business in the previous year.Report Typo/Error