Question-and-Answer Session
Operator
Thank you very much, Mr. Bonikowsky. [Operator Instructions].
Our first question comes from the line of Irene Nattel from RBC Capital Markets. Please proceed.
Irene Nattel - RBC Capital Markets
Thanks, and good morning everyone. Clearly, the same store sales numbers were extremely strong in Canada and relative to the U.S. comp set, you are more than holding your own in the U.S. as well. I was wondering whether there were any regional variations, that particularly, you took note of, or whether you really just think strong consistent results across the board?
Paul D. House - Chairman, President and Chief Executive Officer
We have seen little growth in our sales, Irene, pretty much in every market which is very pleasing in the environment that we are playing in today.
Irene Nattel - RBC Capital Markets
And is it also fair to say, Paul, that you are seeing good strength across all day parts?
Paul D. House - Chairman, President and Chief Executive Officer
Yes that’s true. I mean certainly with the breakfast sandwich introduction, we are not rolling over that, but we have seen good growth in the morning day part because of breakfast. That’s certainly been a help as well.
Irene Nattel - RBC Capital Markets
And, okay, that’s fine. And just one other question, if I may, on finance lead. On the distribution centre you said that you did reach your target during Q3. But was Q3 a representative run rate or it is still little accelerating Q4 as you stabilize it?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
We reached the target at the point throughout the quarter, so we would expect that there will be as we have no full rollout, it will look and feel a little bit different. But again, I would remind you again, Irene, remember with respect to our distribution business, margins can be volatile because of commodities and other things . That’s very hard for us to predict on a go forward basis, what the margins will look like? We look at it as a pool of distributing contributions to our operating income and as we said before, we feel very good about that part of our business
Irene Nattel - RBC Capital Markets
That’s great, thanks, Cynthia.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Thanks, Irene.
Operator
Our next question comes from the line of Jim Duran [ph] from the National Bank Financial. Please proceed.
Unidentified Analyst
I just wanted to ask you accounting question on the cash card. Can you tell us how it will be accounted for, who will record the sale when, so we'd just have a sense of what the timing might be about distribution to the consumer versus impact on your income sale.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That’s good question Jim. With respect to the cash card, when the cash card is sold at store level, that’s not a recognition of revenue per se, because we're basically holding customer's money at that time. So we have an offsetting liability at that time. So it's really upon redemption of the cash card. So when the consumer comes back in and makes that purchase that’s when it gets reflected as a chain sale ultimately.
Unidentified Analyst
And just on the same topic. As far as the card itself, I assume it's a fairly small expense, are you selling it to the franchisees or how is that being handled?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That’s not something that we talk about in terms of our relationship with the franchisee and how we are handling that.
Unidentified Analyst
Okay. And then last question, same study. So has been some commentary in the industry about better cash management. So instead of the wrong change being handed back to the consumer, obviously with credit, it's pretty well 100% consistency. Does that benefit get accrued only to the franchisee because they're dealing with the actual cash or is there a benefit of that difference to Tim Hortons Inc.?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
The franchisees, because we are in Canada 99% franchisees, in franchise system and substantially franchised in the U.S. as well. That would be a store level issue but that’s not something that was really contemplated in the rollout of the card.
Paul D. House - Chairman, President, and Chief Executive Officer
The Card's more aimed at speedier service and convenience for the consumer and hopefully down the road that will result in increased sales.
Unidentified Analyst
Okay. Thanks, Paul and Cynthia.
Operator
Our next question comes from the line of David Hartley [ph] with BMO Capital Markets. Please proceed.
Unidentified Analyst
Yes, good morning. Just a quick question following up on Jim and the MasterCard. Could you talk a little bit about that launch and what it's doing in the early days in terms of speed of service. And anecdotally I would note that, I've used it in the past with the PayFast and I just find that a lot of staff are not necessarily properly trained on it, it actually takes longer. Do you have any comments on that and I just have a follow up.
Paul D. House - Chairman, President and Chief Executive Officer
Well it's very early into the system and I’m not surprised that our staff aren’t as quick with it initially as they will become because it is new to their environment. But, as we bring TimCard in, the cards will be of greater use and I think that that will smooth itself over time. But, we're very pleased with the way it's rolled out to-date and the job that they’ve done at store level and the training -- there's been extensive training put into the program. But repetition of use is what really gets you there and that will happen over time.
Unidentified Analyst
Okay. And is there any thought given to, if not now but maybe in later iterations of MasterCards or your TimCards or loyalty cards that yield? in the drive throughs, you 're actually moved them up in the process. Meaning when you order, you can actually swipe and pay there so that you save more time down the road. Is there technology available for that?
Paul D. House - Chairman, President and Chief Executive Officer
There’s technology available for just about anything today. But at some point, you may be able to pay right when you make the? at the speaker. As you may very well be able to do I, the store, if you went to a self ordering process. With the world of technology, the way it is today, there’s a lot of things that are going to change in the service industry as we move forward.
Unidentified Analyst
Okay. And just finally just on the sales. Could you give us a little indication in terms of volume increases, average ticket and the kind of mix changes you're seeing on average in Canada and in the U.S.?
Paul D. House - Chairman, President and Chief Executive Officer
That’s not something we divulge. I mean we're really early into the stages of it, but the primarily interest is convenience to the consumer and additional speed of service. But, I think this is a long-term growth vehicle, not a short-term.
Unidentified Analyst
Sorry Paul, I was actually just talking in general, non-card related, just your sales overall in terms of the volume, the average basket, the mix, that kind of thing.
Paul D. House - Chairman, President and Chief Executive Officer
Again we don’t break that down, we don’t divulge that for competitive reasons, really.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Well we talked about the fact that Canada had about 2.7% of pricing and the U.S. had about 0.3% and the balance of your growth is going to be a combination of the two things.
Unidentified Analyst
Okay, I tried, thank you.
Paul D. House - Chairman, President and Chief Executive Officer
Good try, David.
Operator
Our next question comes from the line of Joe Buckley with Bear Stearns. Please proceed.
Joe Buckley - Bear Stearns
Good morning, thank you. Could you walk through how the sensitivity to the different commodities and how that’s handled in the distribution business, is everything on sort of a pass-through basis so it affects reported margin but there is less profit, variability or just sort of the key metrics for a couple of the commodities including coffee or maybe wherever wheat would show up as well.
Paul D. House - Chairman, President and Chief Executive Officer
Joe, we buy ahead with most of our commodities that we use, anything that we use of substance. And so, there is a cost pass-through, but we buy in large chunks for over a large period of time. So I mean, margins will change because of the price that you are charging the franchisee. The percentages will change but the absolute margin dollars remain fairly constant.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
And coffee, Joe is an example that we use most frequently because of the penny profit. So, as you have changes in your underlying green costs, your margin percentages are going to move up and down depending on, if you have a high coffee market, underlying green market, the margin will be lower. And if you have a low underlying green market, your margins will look higher. But it’s again, it’s a constant kind of penny profit that we make on it. So that’s obviously one of the biggest things to go through our warehouse.
Joe Buckley - Bear Stearns
Okay. Would the run up in wheat have any impact or is that handled in a similar way?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Again, most of the products that we are purchasing now because of the always crash, we are purchasing finished products from, through our joint venture or through our third party suppliers. And cost of products have been reflected. The wheat buying that we have been able to do are reflected in those costs and are now appropriately set up at store level. I don’t know if there is anything that we would talk about with respect to that. Same principles apply.
Joe Buckley - Bear Stearns
Okay, so the earning sensitivity to the high commodities is not something which you ought to be concerned about?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Well we get overall concerned about it, because again, the health of our stores and our franchisees is extremely important to us. So passing on costs is not an easy solution because ultimately then, that impacts the consumer. And so absolutely, wide changes in the commodity cost will be of concern to us. But as we talked about it on a short term basis, we feel good about it and we continue to, as everyone else does, have concerns in the long term about what will happen to commodities. But again, that’s long range.
Joe Buckley - Bear Stearns
Okay. Thank you.
Operator
Our next question comes from line of Turan Quettawala with Scotia Capital. Please proceed.
Turan Quettawala - Scotia Capital
Yes, good morning. Just to go back a little bit on the margin compression in the quarter, I guess the question that I have is, assuming everything else remains constant, is this the full impact of Guelph or should we see some flow-through impact in Q4 as well.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
With respect to margin compression, I am not sure what you are talking about there. We talked about the mix shift. Distribution becomes a higher percentage of our business and overall that does have an impact on our margin. We have completed the rollout of Guelph and so most of it is reflected in the third quarter. But again, commodities in different changes can always impact the mix of your business, up from a distribution standpoint. But it's a very hard question for us to answer with respect to how it’s going to look in the fourth quarter.
Turan Quettawala - Scotia Capital
No, sure, I understand. But I guess so what you are saying is, if I am hearing this correctly, most of growth is already in there. I mean, just sort of looking at just that one line item, just from Guelph.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Yes, that’s fair; fair answer.
Turan Quettawala - Scotia Capital
And I guess if I have just one more slightly unrelated. Over at the franchisee convention, I guess you have mentioned it, was it like? is this in a range of $0.5 million or something or bigger than that?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
It’s not something that we are going to break out separately at this time.
Turan Quettawala - Scotia Capital
Okay, I guess just? could you just remind us how often that is? Is that every 10 years. Am I right?
Paul D. House - Chairman, President and Chief Executive Officer
No, it's not every 10 years. There’s no really set time but the last one we had, prior to this year was in the year 2000 and prior to that, it was in 1994. So there is a lengthy time between conventions but it isn't necessarily every seven years or every five years. It is as we look out and we determine that as we just go forward.
Turan Quettawala - Scotia Capital
Great thank you very much.
Paul D. House - Chairman, President and Chief Executive Officer
Thank you.
Operator
Our next question comes from line of Glen Petraglia of Citigroup. Please proceed.
Glen Petraglia - Citigroup
Thank you, good morning. I was hoping to ask a question about pricing, clearly, in Canada, your franchisees have been more aggressive than, I suppose you and your franchisees have been in the U.S.. And I am wondering, is that a function of competition, should we be thinking or expecting a price increase coming up in next couple of months here as you lap some of the price increases from last year? And specifically about competition in the U.S. do you think compete more with McDonald’s and Dunkin Donuts and you address some of the challenges or the challenging environment. Is that a competition issue or is that a consumer issue? Thanks.
Paul D. House - Chairman, President and Chief Executive Officer
Well I mean one of the biggest cost drivers is, doesn’t matter whether it's Canada, United States, is labor. And the Canadian marketplace because of the strength of its economy, we've had labor pressures, through minimum wage changes and supply of labor. And so the cost increases that we basically had, that we've implemented at store level have been a result of that labor situation. I have to keep in mind that there’s many markets in Canada so there probably will always be some price in our numbers because price changes in different regions at different times because of government regulations as far as minimum wage is concerned. And so there will be a variety over time. It's been more volatile, as I've said in Canada in the last couple of years than it has been in the United States.
As far as the U.S. is concerned, it's no different than Canada. McDonald’s is in every market and so McDonald's is truly the competitor. We believe in price value, that’s the cornerstone of our chain and we're always very competitive in the marketplace when it comes to the quality and the price valuation of our products. So, we will consistently continue to look at the markets that way.
Glen Petraglia - Citigroup
Thanks.
Paul D. House - Chairman, President, and Chief Executive Officer
Okay.
Operator
Our next question comes from the line of Richard Piticco with CIBC World Markets. Please proceed.
Richard Piticco - CIBC World Markets
Good morning. Actually Paul it’s the, your comment on wage inflation was, was my question and I just want to circle back. Is it fair to assume at this point that you have covered the majority of the wage cost inflation in both markets due to the price increases that have already been initiated. And if not, do you envision the need to up the ante for support to the franchisees?
Paul D. House - Chairman, President and Chief Executive Officer
Well, as I said earlier the reasons change across the country. We've had some elections, the Ontario market for example the current government that was elected to power has indicated that they wanted to raise minimum wage by $0.75 an hour for the next three years starting in 2008. If they go forward with that mandate then obviously we will have to look at our menu pricing. But at this point in time, election promises and what gets implemented, you know the reality of that. So we’ll look forward and as things occur we will react accordingly.
Richard Piticco - CIBC World Markets
But the inflation pressure to date has already been recovered through the pricing, Right? There is no residual overhang that the franchisees are absorbing?
Paul D. House - Chairman, President and Chief Executive Officer
I mean it's business as usual. We look at the markets. We adjust as best we can and go forward. There’s some margins in the restaurant business, will vary from time to time at store level.
Richard Piticco - CIBC World Markets
Great. Thanks Paul.
Paul D. House - Chairman, President, and Chief Executive Officer
Okay. Thank you.
Operator
Our next question comes from the line of Winston Lee with Credit Suisse. Please proceed
Winston Lee - Credit Suisse
Just a question on your operating expenses. For the G&A, Cynthia, when do you think it starts to normalize going forward with the exception of the bumps in the in the RSU?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That’s a tough question. I think what we have always said our goal here as a company is to have our G&A grow, slower than our top line growth and so that’s really how we look at it. But in G&A fundamentally when you have an expense that occurs in a quarter, you recognize it at that time and so it’s? there are a lot of things that don’t get smoothened out. So from time to time you are going to see some volatility in quarters with respect to G&A.
Winston Lee - Credit Suisse
So, are there any expenses that you'd recognize first before the revenue component comes in ?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Absolutely. When you have R&D type costs, those get expensed. When you are working on new products and whatnot, those get expensed when you incur them. And then you don’t start to see the revenues until you launch the product and some products never get launched. So there's all kinds of different things that take place within our business with respect to G&A cost.
Winston Lee - Credit Suisse
Thanks. And I just had a question, and you may have mentioned this already , I may have missed it. The other operating expense the $1 million, what was that about?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
The other, the other income expense?
Winston Lee - Credit Suisse
Sorry, the other income expense? Yes.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That was foreign exchange related, foreign exchange loss that we incurred in the quarter.
Winston Lee - Credit Suisse
But then the Canadian dollar has strengthened. I am not sure why you had a loss.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
If you are holding U.S. dollars and the value of the U. S. dollar declined, we spend a lot of money in the U. S. as well. We have to, it’s just a part of our business in order to have cash flows available for construction and our investments in the U.S. You are going to from time to time be holding U.S. dollars.
Winston Lee - Credit Suisse
Okay. So how much of that is now? like how much of the U.S. dollars are you holding? I guess, as you look at your data or cash and cash equivalents, and sort of net that?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That’s not something that we typically break out.
Winston Lee - Credit Suisse
Okay thanks very much.
Operator
Our next question comes from the line of Adina Bloom with TD Newcrest. Please proceed.
Adina Bloom - TD Newcrest
Hi, good morning. Wondering if you can talk a bit more about the impact of the dollar in your results going forward. Obviously your coffee roasting plans in the U.S. so I would imagine that would have some impact. If you can talk a bit about that?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Sure. I mean, foreign exchange impacts our business in many different ways but you know from a quality standpoint we purchase coffee in U.S. dollars. So that has a benefit but a lot of times that is offsetting what’s going on in the underlying cost of green. But there is obviously a product that we supply from the Canada to the U.S., have increased as a result of currency. And so that impacts the U.S. a little bit with respect to that. When you translate our US business into Canadian dollars that has an impact there. So it varies across parts of our business. But overall, because coffee is such a big part of our business and the Canadians bale the coffee, the strengthening of the Canadian dollar helps us our in our ability to procure coffee and keep those prices fairly reasonable for our store owners.
Adina Bloom - TD Newcrest
So, on a percentage basis, I don’t know if you have it available, what would be the impact of the dollar on the quarter?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
That’s not something that we can break out for you, Adina.
Adina Bloom - TD Newcrest
Okay. Thanks very much.
Operator
Our next question comes from line of Rachel Rothman with Merrill Lynch. Please proceed.
Rachel Rothman - Merrill Lynch
Hey, good morning, guys.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Hi Rachel
Rachel Rothman - Merrill Lynch
Can you talk about the number of US companies owned stores, it has been declining throughout the year. Is that because you've had success in refranchising those units? Are you closing some funds? And then maybe could you talk about how the health of the US franchise pipeline at this point looks given that you continue to open franchise stores in that market?
Paul D. House - Chairman, President and Chief Executive Officer
Our long term goal in the U.S. is to replicate the Canadian model and to be a total franchise system. And some of the stores, corporate stores as they reach certain sales levels, they refranchise them out. And we are going to continue to do that. The pipeline for franchisees varies by region, some areas we've got a good pipeline and in other areas we have to work to get people and those are usually in new markets. But overall that’s not been an impediment to our growth.
Rachel Rothman - Merrill Lynch
So the story, the declines that we have seen throughout the year has been refranchising the stores, not necessarily closures in the US, is that correct?
Paul D. House - Chairman, President and Chief Executive Officer
That’s correct. Operating agreements have variations but, yes, you are right.
Rachel Rothman - Merrill Lynch
Perfect, thank you so much.
Paul D. House - Chairman, President and Chief Executive Officer
Thank you.
Operator
Our next question comes from line of Keith Cowlet [ph] with Deutsche Bank Securities. Please proceed.
Unidentified Analyst
Yes. my questions over year about coffee sales in the US market, I am just worrying how the trend line is, there you got lot of new breakfast products or presumable that’s I don’t know I pressure that’s very good for coffee sales and also and my question is weather you are getting good momentum in your coffee party your business in US and what your thinking is with respect to specially coffee’s beyond the ice-coffees. Thanks.
Unidentified Company Representative
Coffees are important part of our business, breakfast sandwiches has certainly helped us to build that day part in the Unites States. We are very pleased with the results we had, we have been [inaudible] its been in US now almost two years that will be in January but in specially coffees. We're running some tests on specially coffees, but at this point in time we do not have any immediate plans for that into the system. But, we are pleased with the growth of our coffee business overall in the United States.
Unidentified Analyst
Thank you.
Operator
Our next question is a follow up question coming from the line of Jim [inaudible] with National Bank Financial. Please proceed.
Jim
Hi, I’m not sure if you’re going to be able to answer this for me but back when the Wendy’s spin off was done. Wendy’s provided some indication as to how long Tim Hortons will have to stay with the U.S. domicile situation so that it wouldn’t impede the tax free spin off. Has there been any change to that estimated time frame as far as you know?
Cynthia
No. At that time about 18 to 24 months its really major reorganization sort of thing like that and so there’s been no change in that.
Jim
Thanks Cynthia.
Cynthia
[inaudible]
Paul D. House - Chairman, President, and Chief Executive Officer
Operator its [inaudible]
Operator
Yes. Our next question comes from the line of Paul Westra with Cowen and Company. Please proceed
Paul Westra - Cowen And Company
Hey, thanks and good morning.
Cynthia
Good morning.
Paul Westra - Cowen And Company
A question. Just a couple left perhaps. I was wondering if you could talk a little bit more about you're larger strategic areas of focus going forward, maybe are I think [inaudible] in the past. I know you mentioned the egg sandwich and then the masterCard and I think you had commented even hot lunch is a sort of a next potential area of focus. I was wondering as you look out into ’08, ’09 what you might see key strategic missions will be focused on?
Paul D. House - Chairman, President, and Chief Executive Officer
Well , certainly lunch is something that we've targeted as a growth vehicle. We think that because of the success of the hot breakfast sandwich that our hot lunch offering is a natural evolution for the chain and as you go forward we've been known to have, to bring new things to the market place and we with that we’ll continue to be part of our strategy as to how we grow our business. There will be more new things coming.
Cynthia
Right we just began with the implementation of cashless payments but we still have the initiatives that [inaudible] through ’08 and ’09.
Paul Westra - Cowen And Company
Okay. so if you're, I would assume you will just be planning on small test and no big added equipment package or hot lunch. You went after it in a strong way would just be incremental or would it be potentially larger?
Paul D. House - Chairman, President, and Chief Executive Officer
Well I think that we have. We have the necessary equipment in our restaurants to do a hot lunch item. We did that we put that equipment in when we did the breakfast sandwich so it’s a natural to try to leverage that equipment and put other things with it and that’s what we will be looking at to do as we go forward into 2008 and so forth. We're testing a number of products as we speak and depending how they do in test will dictate when they come to market and so forth. Or whether they will come to market.
Paul Westra - Cowen And Company
Great. And then just one more follow up if you don’t mind. On your contract buying obviously we in corn being the big two [inaudible] coffee [inaudible] could give us the idea of when your most recent contracts were signed and how long they lasted [inaudible] or typically are they fixed [inaudible] six twelve month contract?
Unidentified Office Representative
On coffee we sometimes we are buying everyday, it depends on how the market is or the strength of the Canadian dollar and there are a lot of factors that dictate whether or not we buy them , there are times when we don’t buy at all so it’s kind of a variable type of thing and when we look at the market we see a window where we have a target for price, we have buyers instructed to execute it.
Unidentified Office Representative
When you hit that price it would be one month , two month or short term or will be six or twelve months?
Unidentified Office Representative
We tried to hedge or not hedge but covered in the market for six months [inaudible] and we have been pretty consistent with that in recent years. That philosophy is that we don’t want to buy at the top and we are not likely at the bottom as I said the philosophy and it has served us well for the last ten years I guess with that philosophy we have done very well with it and some of the you know the pressures that other people are feeling today we are not feeling them directly may be because of the forward buying that we have done, that keeps us protected with the hiccups in the market .
Unidentified Office Representative
Okay thank you.
Operator
Our next question is a follow up question that comes from the line Richard [inaudible] market.
Unidentified Office Representative
Hi Paul, I just want a follow up on your statement on the specific coffee not immediately coming to the system it’s just to clarify the idea initial past not meeting expectations or it’s just going to take longer to hold the system?
Unidentified Office Representative
Well we have just rolled the cash card and so forth you know like your system has a capacity to change and for things that you are doing and we always if it brings special coffee’s and it’s fairly a sizeable expenditure by a franchise group so we want to make [inaudible] sure that you are going to get a good return on the capital when we execute that so [inaudible[ number of things that you look at as for the timing and so forth so.
We are in no rush to do that in the sense all that if it makes sense will do it and if it doesn’t we won’t but [inaudible] test you know we are still on test so that tells you we are not discouraged with that. Our [inaudible] will try to squeeze in may be one or two more questions [inaudible].
Operator
Our next question comes from the line [inaudible] .
Unidentified Office Representative
Hi just on the tax rate Cynthia, you still expect it to be 24% [inaudible].
Cynthia
At 34 you mean.
Unidentified Office Representative
I am sorry 34.
Cynthia
We haven’t really you know changed any of our [inaudible] with respect to tax rate, we have always got approximately a 34% by tax because of the nature how you recognize tax discreet items, they come up in the quarter you can’t anticipate [inaudible] items by their very nature. Being a discreet item so it’s a difficult thing to forecast but again we have not changed our [inaudible] approximately 34%.
Unidentified Office Representative
Okay thank you.
Operator
Our next question comes from the line of [inaudible] with Research capital. Please proceed.
Unidentified Office Representative
[inaudible] G & A I know you said that , did you say that was there [inaudible] expense this quarter?
Cynthia
Yes, few expenses this quarter but last year we had about $ 4 million of higher out of [inaudible] expense that we had this quarter.
Unidentified Office Representative
In march if you remember you had a $ 2 million for the director’s insurance policy as well?
Cynthia
That’s correct.
Unidentified Office Representative
Which one to look at the quarter G & A excluding those items, if I am getting to number 28, 29, 30 million a quarter, is that a run rate we should be looking at going forward now .
Cynthia
Again you know our policy is not to comment on you know absolute dollars of G & A expenditures that in a particular quarter because of the nature of timings and certain items you know you are going to find some variability but again you know our goal is to keep our G & A at a growth rate slower than our top line revenue growth.
Unidentified Office Representative
Okay one more question if I could, if you say that you could possibly exceed the operating income growth item to 10% what’s the real [inaudible] that you know you don’t exceed that , you just committed 10%, what’s really the key item there you know cause that to come in line rather than exceed?
Cynthia
You know I think we have said that if trends continue that the company at this time expects to exceed that so that is what we are saying.
Unidentified Office Representative
Just one more may be on the Wall- mart announcement I know that initially you said that there is seven storey’s there but may be you could talk about the possibilities there above and beyond that and may talk about why you looked at Wall- mart and may be not like [inaudible] someone else in Canada.
Unidentified Office Representative
Wall- mart opportunity was presented to us, we have been in discussion with wall-mart of and on for a number of years and with their expansion with the grocery side of the business and increase in their foot print and the kind of traffic that generates makes it attractive as a place for us to put our stock and Wall-Mart they have worked to their consumers to what food offering they want in their stores and we desire to have and we are the top choice and so we are very pleased to occupy that position so we are the end of first seven and we will see where we go from now.
Unidentified Office Representative
Thanks very much.
Operator
One last question comes from the line of [inaudible].
Unidentified Office Representative
You had suggested some questions about some house keeping matters you mentioned in the second quarter conference call, the store development cost and franchise supports payment were year over year up and strained the cost line a bit , where were those in this quarter ?
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
Are you referring to, we talked about the store we designed [inaudible]. Yeah there was not a lot of that in this quarter that was unique to last quarter and I am not sure about the other that you are referring to.
Unidentified Office Representative
You mentioned the franchisees support was uploaded in the second quarter.
Cynthia J. Devine - Executive Vice President of Finance and Chief Financial Officer
The franchisee release cost, I mean it’s an ongoing part of our business and you know as you go into new markets and open new stores it’s an ongoing part of how you support franchisees in early days and you know it is in the results of this quarter as well.
Unidentified Office Representative
Thanks.
Operator
We have no other questions at this time I will turn the conference back to you.
Unidentified Office Representative
Thanks operator and thanks to all for joining us for the Q3 2007 Tim Horton earnings conference call on web cast, If you have any additional questions or topics that you wish to address, please feel absolutely free to call. You can reach me at 98053396186 or alternatively you can reach me by email at [inaudible], it’s an easy long mail address but there is . So with have a great day. Thank you.
Operator.
Ladies and gentlemen [inaudible] conference call for today, We thank you for your participation, I ask you to please disconnect your lines.
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