Tims China Moves to Add Popeyes China Rights, Pointing Toward a Multi-Brand Platform

This is an English adaptation of a FoodBud historical article originally published on February 8, 2023.

On February 9, Tims China, the exclusive operator of Tim Hortons in China, announced that its board had approved a proposal to pursue the exclusive operation of Popeyes in mainland China and Macau. Completion of the transaction was subject to definitive documents and closing conditions, with the company’s independent audit committee authorized by the board to oversee the deal and its completion.

Tim Hortons and Popeyes are both well-known brands under Restaurant Brands International (RBI). Popeyes, with a 50-year history, had more than 3,900 stores worldwide and had become one of the world’s largest fried-chicken quick-service restaurant chains.

Why the Deal Matters

Tims China chairman Peter Yu said Tims had performed well in China, with more than 600 stores open, and that the company was moving steadily toward a year-end target of 1,000 stores. He said Tims China aimed to build another strong brand in China and expected significant synergies between Tim Hortons and Popeyes in operations and development.

Tims China’s management had previously built successful restaurant brands in the China market. For Popeyes, the company said it would keep the brand’s core identity and products while localizing flavor and experience through product R&D, store development capabilities, and a digital platform.

CEO Lu Yongchen said both brands would benefit from larger business scale, a stronger financial model, and synergies in areas such as supply chain and new restaurant development. He also noted that Tims China was ready to offer fried chicken and sandwiches to consumers, including more than 11 million loyalty members.

Transaction Structure

After the proposed all-stock transaction, Tims China expected to obtain exclusive operating and franchise rights for Popeyes in mainland China and Macau. The acquisition was also expected to inject a significant amount of cash into Tims China, further strengthening its balance sheet.

FoodBud’s Read

FoodBud had previously discussed this possibility with Tims China CEO Lu Yongchen before Tims China’s listing, asking whether Cartesian Capital might place the Popeyes China rights into Tims China. At the time, because Tims China was close to listing, the topic could not be discussed in depth.

At this stage, placing Popeyes China into Tims China suggested a path toward building another Yum China-style multi-brand restaurant platform.

Burger King China’s agency rights were held by Turkey’s TFI, beginning June 15, 2012, with a 20-year term ending June 15, 2032. If Cartesian Capital wanted to add another brand into the platform, FoodBud viewed Burger King China, or a pizza chain franchise, as relatively logical possibilities, noting that pizza chains still had room in the market.

One notable signal: soon after China reopened inbound travel, TFI CEO and Burger King China chairman Korhan Kurdoğlu flew directly to China and said the company planned to restore its pre-pandemic store-opening pace of 200 new stores per year.

Yum China’s market capitalization at the time was US$25.1 billion. If Tims China followed a Yum China-style playbook and ultimately reached one-quarter, or even one-half, of Yum China’s market value, FoodBud argued that would already represent a very strong outcome.

Note: Forward targets, transaction expectations, IPO/listing context, and market-cap figures are historical as of the original February 2023 article.