The parent company behind Tim Hortons, Burger King, Popeyes Louisiana Kitchen and Firehouse Subs says the primary deal will see Popeyes China acquire Tim’s China, which operates Tim Hortons franchises within the country.
Serving greater than just coffee
RBI estimates the acquisition to be value $15 million, noting that Popeyes China has opened 14 restaurants in Shanghai since opening in August 2023. The Toronto-based company plans to work with local partners and establish a “master franchisee” model for Popeyes just like the model in place in other countries. RBI also plans to work with Cartesian Capital to speculate as much as $50 million in Tim’s China through three-year convertible notes, of which it can receive as much as $30 million.
These moves come several months after the corporate said it needed to extend its investments in China to fuel further growth, with executives optimistic in regards to the country’s expansion potential.
“China is one of the most attractive long-term market opportunities for our Popeyes and Tim Hortons brands. Popeyes China is off to a strong start and we look forward to capitalizing on its development potential,” said Rafael Odorizzi, president of Asia Pacific, in a press release. “…Today’s announcement allows Tims China to double down on its focus on developing high-quality restaurants and offering our high-quality Tims coffee and food offerings to Chinese consumers.”
By investing in Tims China, RBI could have the precise to appoint two board members and its stake in the corporate will increase to as much as 18 percent, the corporate said.
The RBI had sounded a cautionary note about expansion in China just five months ago when it used the discharge of its fourth-quarter financial results to melt its forecast for the region. The RBI had originally expected net restaurant growth – a metric that takes into consideration each openings and closures of locations – to rise by not less than five percent between 2023 and 2024.
“A key factor in this level of growth was our expectation that our development in China would accelerate in 2024 from 2023 levels,” RBI chief Joshua Kobza told analysts in February. “We now believe this outlook is less certain and have updated our outlook to reflect a lower level of net unit additions in China this year.”
Consolidation of net growth within the hospitality sector
The company said on the time that it expected consolidated global net restaurant growth within the mid-4 percent range this 12 months, which might then speed up in 2025.
