Canadian coffee shop chain announces ambitious joint venture agreement with Cartesian Capital Group to open 1,500 stores over a 10-year period in China
Canadian coffee chop chain Tim Hortons has announced its first foray into the Chinese coffee shop market.
The ambitious plan to open more than 1,500 stores over the next 10 years will be delivered through an exclusive master franchise joint venture agreement with private equity firm, Cartesian Capital Group.
“We have two main priorities at Tim Hortons: building and strengthening our brand in Canada – and expanding our iconic Canadian brand to the rest of the world,” said Tim Hortons President Alex Macedo in a press statement.
“China’s population and vibrant economy represent an excellent growth opportunity for Tim Hortons in the coming years,” he added.
New York-headquartered private equity firm, Cartesian Capital Group, already holds the master franchise for Burger King in China and claims to have expanded the fast food chain from 56 restaurants in 2012 to more than 800 in 2018.
Cartesian Managing Partner, Peter Yu, said the firm would “draw on 20 years of experience building businesses in China” to build Tim Horton’s presence in the country.
The announcement comes as Tim Hortons attempts to sooth tensions between some franchisees and parent company Restaurant Brands International (RBI) in its native Canada. Many store owners have publicly criticised RBI’s handling of the company, claiming that cost-cutting measures related to minimum wage rises and sluggish sales had damaged operating standards.
In June 2018 the coffee shop chain announced it would invest CA$100m in improving its Canadian distribution network
after complaints that some Canadian sites were being poorly served.
Even if Tim Hortons succeeds in its 10-year plan, it will still have less than half the number of Starbucks’ 3,000+ Chinese stores in operation today. The world’s largest coffee shop chain plans to have more than 6,000 stores in mainland China by 2022.
Tim Hortons will also have to contend with Beijing-based Luckin Coffee, which was recently valued at $1bn and has opened more than 500 sites just six months of operation