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Description: Last week in this blog there was a story on Apple’s move to reduce waste by no longer shipping a charger block with its new iPhone 12 models. This week Tim Horton’s picked up on the theme by announcing it would no longer double-cup your hot beverage. Don’t panic though; the coffee chain will still give you a cardboard sleeve to protect your hand from the heat of the double-double.

Date:  October 21, 2020



Discussion points:

1) Are you a Tim Horton’s fan? Is there a Tim’s outlet on your campus?

2) What strategic factors do you think Tim’s looked at in making this decision?

3) On page 9-27 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you will read about franchises, something that is a key part of Tim Horton’s business model. If you purchased a franchise for a Tim Horton’s, where would you place this asset on your balance sheet? Would you amortize it?

12 Responses to “The End of Double-Cupping”

  1. Drew Besco, Montana Branch, Shashank Arvindan, Sophie Austin

    1) Are you a Tim Horton’s fan? Is there a Tim’s outlet on your campus?
    Our group was split, as half of the people enjoyed Tim Hortons, and half did not. The positives involved the convenience of Tim Hortons, and readily available it is. While the negatives according to our member is that their menu is not appetizing enough to go out of the way for.

    2) What strategic factors do you think Tim’s looked at in making this decision?
    They are definitely trying to cut back on their waste, as they saw Apple do that. Like with Apple there are no repercussions to doing so as they save money from the reduced number of cups, and they gain a positive image that is marketable.

    3) On page 9-27 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you will read about franchises, something that is a key part of Tim Horton’s business model. If you purchased a franchise for a Tim Horton’s, where would you place this asset on your balance sheet? Would you amortize it?
    A franchise is a contractual arrangement under which the franchisor grants the franchisee the right to sell certain products, to provide specific services, or to use certain trademarks or trade names, usually within a designated geographic area. The franchise you purchase becomes an intangible asset that goes on your business balance sheet and is recorded as a non- current asset. Yes, you would amortize it, as it is a large sum that you cannot pay off all at once.

  2. Dylan Corkum, Chacha Dominion

    1) We are indeed Tim Horton’s fans in our group. They have good coffee and donuts, but we do not have a Tim’s on the Mount Allison Campus.
    2) We believe that Tim’s considered the savings associated with ending double cupping by being able to save upwards of 200 million cups annually. Tim’s also could have thought about being socially and environmentally responsible, while saving money.
    3) If we purchased a franchise like Tim Horton’s, we would place it under Intangible Assets on our balance sheet. The franchise acts like a license, is an asset to us, but is not tangible. We would amortize it if it had a limited useful life, and amortize it over the shorter period between either legal life or useful life.

  3. Andrew Warner, Emile Wold, Katherine Waller

    1.) We are all huge fans of Tims Hortons love their farmer wraps especially and there donuts. There is not a Tim’s on campus but their is one approximately 10min away so we do have a way of getting it but would be more preferred on campus.
    2.) We believe Tims uses the social trends as their main strategic factor. Saving the environment is a huge concept trending around the world now so if Tims, becomes the leader of it it will be incredible for their business. This will also means that costs would be reduced as well
    3.) Franchise would be listed under intangible assets on the balance sheet.

  4. Lauren Simmons, Hayley Smith, Jacob Simpson

    1) We are Tim Hortons fans, sadly their is no Tim’s outlet on our campus but their is one close.

    2) We think that Tim’s strategics factors that were looked at when making this decision had to do with marketing. Getting rid of double-cupping will be beneficial to the environment and we think that the fact that Tim’s is trying to better the planet will make people want to choose Tim’s over another coffee place.

    3) Purchasing a Tim Horton’s franchise would be a long-term asset on the balance sheet. We think that yes, you would amortize it.

  5. Katherine Hanscom, Anna Hardie, Shaobo Gong

    1) Our group has a mix of Apple users and Android users. We all use Macbook products for our laptops as we like both the aesthetic and security offered by Apple. For those of us who also have Apple iPhones, we enjoy the fact that the product line all works seamlessly together to form a whole system. For instance, the watch can be used to check emails, texts, etc, allowing users to leave their cell phone at home while exercising. Unlike the pager system of the 90s, we are able to fully use our cell phones remotely through the Apple Watch. Myself and another group member have been dedicated Apple customers since the late 2000s. Notably, we have discussed the enclosed software environment and impeccable security offered by Apple products.

    2) Unlike the action taken by RBC, which restricts new coal companies, we believe this move made by Apple to remove the free charger from iPhone 12 is nothing more but fishing for fame and reputation. Apple indicates that they are doing this to reduce e-waste, which is an environmentally friendly act; however, many customers will be unhappy about it. Firstly, iPhone 12 is the first iPhone model using USB Type-C, which means most customers will not have a USB Type-C charger. In that case, buying an Apple USB Type-C charger is almost always necessary for iPhone 12 users. We disagree that removing the free charger from iPhone 12 is an environmentally friendly act — as iPhone 12 users have to purchase a charger while buying iPhone 12, the charger will come in a separate package from the iPhone 12 package. They claim that the changes made for iPhone 12 have cut “over 2 million metric tonnes of carbon annually; it’s like removing 450,000 cars from the road”.
    While this may reduce e-waste, it creates more waste by sending out more boxes. If Apple wants to protect the environment and build up a better brand image, the company should spend money and effort to achieve their goal. As mentioned in the article, this can be done by focusing on making their products from 100 percent recycled metals, use the GaN results in its charging adapter, and participate in the movement towards universal chargers across all smartphones. It is never favourable to shift the burden of environmental responsibility to customers nor make skin-deep claims on environmentally sustainability for marketable purposes.

    3) We first started off by defining Gross Profit Margin and Gross Profit. Gross Profit Margin is calculated as Gross Profit divided by Sales. In addition, Profit Margin is Net Income divided by Sales. Apple has a high gross profit margin because it has a low turnover rate and has more inventory in stock for longer than other marketable items such as vegetables. According to MacroTrends, over the past fourteen years Apple’s gross margin and profit margin have both increased from roughly 27% to 37% (MacroTrends, 2020). (Profit Margin Data: link) (Gross Margin Data: link)

  6. Jack Hooper, Alexa Kastner, Myaella Letourneau

    1. Yes, we like Tim Horton’s for the most part. There is not a Tim Horton’s on the university campus, however there is one right outside of it.
    2. There were a couple factors they looked at. Their first concern was likely cost-cutting. By removing the double-cup feature at their locations, they could be cutting their cup costs by up to double. They instead are opting for a cardboard sleeve. Their second concern is being eco-friendly. By removing their second cup, they are really cutting back on waste.
    3. When a franchise is purchased, it becomes an intangible asset for the company. Assuming that the franchise life is finite, you would amortize it.

  7. Hugo Power Rachel Price Dylan Rhyno

    1) we are all Tim Hortons fans, there is not one on campus however, there is one fairly close.

    2) Tim Horton’s decision to stop double cupping is a strategy used to target their consumers with environmental concerns. More recently climate change and our environment has been a more prevalent issue that the public has been concerned about. With this change in their company’s practice, they will be reducing the waste and working towards more sustainable actions. This strategy not only benefits the environment as a whole, but it will cause consumers to choose Tim Hortons over less environmentally friendly alternatives.

    3) If we purchased a franchise like Tim Hortons, we would place it under Intangible Assets on the Balance sheet. We would amortize it also, as a franchise would be a large initial cost that would need to be amortized.

  8. Samuel Power, Cole Peters, Zhixiang Qi

    1) Yes our group are Tim Horton fans, and although only 2 of us live in Canada at the moment there is still an overall liking for what they have to offer, and there is not a Tim Hortons on our campus but there is one nearby.

    2) The decision made by Tim Hortons not to double cup customers beverages had to do with a few factors, one would be the obvious cost reduction in overall supplies per store location, due to the amount of savings not double cupping would incur. Another factor could be viewed as an environmentally friendly one, the need for more single use materials has recently been frowned upon by many consumers wanting a greener lifestyle, so this tactic may be targeting that demographic in a small way.

    3) A Tim Hortons franchise would be placed as an Intangible Asset on our balance sheet. Also, due to the large cost associated with opening up this type of franchise, we think we would amortize it to make it more feasible to purchase.

  9. Akhilesh Penta, Jacob Myra, Efe Onal

    1. Yes, each member of our group likes Tim Horton’s. No, our university does not have a Tim Horton’s on campus. The nearest Tim Horton’s is opposite to the gas station.

    2. Tim Horton’s stopped or ended double cupping because it is a trend which is going on, taking Apple as an example. Tim Horton’s are also looking to invite more customers by going eco-friendly and then a take towards saving the environment. This decision of ending double cupping will also help Tim’s reduce the cost which will benefit them.

    3. We would have to amortize the organisation because it’s organisational life would be limited and the cost would be pretty high. This will result Tim Horton’s coming under intangible assets in our balance sheet

  10. David Elsinga, Ashley French, Nicolas Gauvin

    1) We as a group are fairly neutral towards Tim Hortons, we wouldn’t consider ourselves fans but we also wouldn’t say we don’t like Tim Hortons either.

    2) With a constantly evolving market that is leaning towards enviromentally friendly products it is no surprise that Tim Hortons is taking a step towards enviromentally friendly strategies, we think it is a fantastic tactic that Tims is using and is very marketable.

    3) If we were to purchase a Tim Hortons we would place this asset in intangible assets on the balance sheet, yes we would have to amortize.

  11. Jacob Myra, Efe Onal, Akhilesh Penta

    1) All of our group members like Tim Hortons, there is not one on campus but there is one close.

    2) The Decision made by Tim Hortons to stop double cupping is a marketing strategy to retain and target consumers with environmental concerns revolving around climate change and reducing waste which has been a growing public concern. By not double cupping Tim Hortons is reducing waste, cost and this will cause some consumers to go to Tim Hortons rather than other less environmentally friendly options

    3) Purchasing a franchise like Tim Hortons would be placed on a balance sheet as an intangible asset. We would also amortize it if we assume the organizational life is finite and have a substantial initial cost.

  12. Chris Heo, Ben Hopper, Will Fenton

    1) We are fans of Tim Horton’s because they are an iconic Canadian brand that offers consistent products across the country. They’ve done a good job of adapting to the modern restaurant market while keeping up their image as a traditional Canadian establishment. Canadians can count on Tim’s for a meal whether they are in Vancouver or St. John’s. There is not a Tim Horton’s on campus, but like almost any Canadian, we know where to find on close by.
    2) There are a few different factors at play. Firstly, decreasing the amount of plastic waste will reduce the cost it takes to produce their product. These savings can be passed onto the company as well as the consumer. Secondly, the act of reducing waste makes good marketing sense, in order to appeal to environmentally conscious consumers.

    3) We would place this asset under intangible asset. We would amortize it if it has a finite useful life because we cannot pay the large amount all at once.


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