A Tim Hortons store in Shaoxing City, Zhejiang | Photo credit: Tims China

Restaurant Brands International (RBI) and New York-based private equity firm Cartesian Capital have agreed to invest up to $50m into their Tims China joint venture. 
 

Formed by RBI and Cartesian Capital in 2018, Tims China opened its first Tim Hortons store in Shanghai in 2019 and reached more than 900 outlets across China in the first quarter of 2024.  

In a press release, Toronto-based RBI said the move reflects its confidence in China, which overtook the US as the largest branded coffee shop market in the world by outlets in 2023. 

“China is one of the most compelling long-term market opportunities for Tim Hortons. Today’s announcement allows Tims China to redouble its focus on quality restaurant development and providing Chinese consumers with our high quality Tims coffee and food offerings,” said Rafael Odorizzi, President of Asia Pacific, RBI. 

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Following four years of rapid expansion, Tims China significantly reigned in outlet growth in the first quarter of 2024 – ‘pruning’ underperforming Tim Hortons sites and opening just four net stores – amid an ongoing price war among China’s largest coffee chains. 

Market leader Luckin Coffee and fast-growing rival Cotti Coffee have pushed the promotional cost of beverages to as low as 9.90 RMB ($1.37) per cup, with heavy discounting a key feature of both coffee chain’s marketing strategies.  
 

“We are pleased to announce this major funding package, which underscores the commitment of our founding shareholders to this dynamic business. This year will be a pivotal one for us, and fortifying our balance sheet is an important step forward towards ensuring our long-term success in this highly competitive market,” said Tims China CEO Yongchen Lu in a separate statement. 

As part of the investment agreement, RBI will gain the right to appoint two directors to the Tims China Board and will increase its equity ownership in the business to 18%, on an as converted basis.  

In a separate deal, RBI has agreed to acquire the Popeyes China business from Tims China on a cash-free debt-free basis based on an enterprise value of $15m. Tims China relaunched the fast-food chain in China in February 2023 and opened 14 stores across Shanghai.