Tim Hortons China receives further financing, arrangement with Popeyes restructures

On 1 July, the exclusive operator of the Canadian Coffee shop chain in China, Tim Hortons China (Nasdaq: THCH, shortened to Tims locally) announced that it had secured an aggregate of up to 65 million USD of financing and additional funding from founding shareholders Cartesian Capital Group, LLC and Restaurant Brands International (RBI).

At the same time, fast food restaurant chain, Popeyes, which has been operated by Tims since March 2023, has had its operation in China acquired by RBI for 15 million USD. This means that Tim Hortons China has now returned to being a single entity instead of the multi-brand platform which it has been a part of for the past year or so. According to the brand, Tims is now placing its focus back on coffee. It is also going to leverage its popular coffee + warm food strategy to differentiate from competitors.

Currently, Tims and Popeyes have 917 branches combined (14 of which are Popeyes restaurants), across 70 cities in China. The original plan was to open over 2,750 profitable branches by 2026. Tims has three modes of franchising, city franchising, KA (key account) franchising and partnership programmes. City franchising involves local franchisees and KA franchising works with large chains to open in locations such as petrol stations and convenience stores. Partnership programmes were opened last September for individual franchisees. Combined with directly operated locations, Tims is increasing the density of its branches in cities where they already have a presence, while launching in tier 2 and tier 3 cities such as Huzhou and Huizhou.

It opened individual franchising for almost all regions in China and included both Tims Go and Tims Red type of branches. The budget required for franchising has also decreased from 610,000 RMB (83,927.22 USD) to 560,000 RMB (77,047.94 USD). Pundits at the time saw this as the chain getting aggressive in the franchising competition to expand. Indeed, with Starbucks moving to include bagels, a Tims staple, on its menu, Tims is facing competition from more than just local competitors. With extra funding and refocusing on coffee, it would seem Tims has a new strategy to face the tides.


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