The famous American fried chicken company Popeyes has inked a new collaboration with Tims China, the China-based offshoot of Canada’s coffeehouse chain Tim Hortons.
On February 9th, Tims China announced that their proposal for a merger with Popeyes was accepted. According to Jiemian News, once this transaction is fully complete, Tims China will obtain the exclusive rights to distribute products and services within China under the banner of the Popeyes brand. Tims China told Jiemian News that both companies will benefit greatly from the greatly enlarged business scale brought by the transaction.
Tims China started business in China in 2019, operating as a joint venture between the Canadian multi-national fast food holding capital Restaurant Brands International (RBI) and the private equity firm Cartesian Capital Group. It currently has 600 stores in China and plans to get that figure to 1,000 before the year is out. It was listed on the Nasdaq stock market in September 2022.
Popeyes is another one of the brands currently under RBI, but it has had less of an easy time since diving into the Chinese market. In August 2022, seven Popeyes restaurants closed overnight after a surprise announcement that RBI would be sharing the brand’s franchising rights over to the private equity firm Cartesian Capital Group, after previously operating Popeyes under a joint venture with TAB Food Investments, a Turkish fast food operator.
Ge Xiantong, a partner at the venture capital firm Interface Capital, said of the new deal, “Tims China’s merger with Popeyes is ultimately a reflection of the special shareholder resources it has behind it. This kind of capital operations is uncommon, for the reason that there are not many large global restaurant groups with multiple strong restaurant brands on the level of RBI.”
The new merger is no guarantee of success. The competition will be fierce for Popeyes since Mcdonald’s, Burger King, and KFC all have well-established consumer bases in China, with KFC being particularly well-known among Chinese consumers for its dynamic marketing campaigns.
In 2021, Mcdonald’s reportedly opened a new store every 15 hours in China. With only 9 of its stores having opened so far, Popeyes has a long road ahead. But if it can leverage the popularity of interactive digital marketing campaigns and exclusive offers, Popeyes has a good chance of changing its fate. At the same time, Tims China clearly hopes to diversify out of the coffeehouse market and gain ground in the hugely popular fast-food world.
