Tim Hortons ready for international stage, new owners say

When the new owners of Tim Hortons took over Burger King in 2010, sales were falling and franchisees were suing the burger chain for products and practices that were driving them out of business.

In contrast, 3G Capital, which acquired Tim Hortons and combined it with the U.S. fast-food chain to form Restaurant Brands International late last year, doesn’t have that problem in Canada.

“I think the starting point for Tims is very different,” Josh Kobza, the new company’s head of finance, said on Thursday. “They’re working well.”

MORE: Goodbye Tim Hortons, hello … Restaurant Brands International

Kobza was singing the praises of the iconic doughnut and coffee chain at a conference hosted by CIBC, saying there is little need for 3G to drastically alter the business plans for Tim Hortons, other than to embark on an ambitious strategy to grow Tim Hortons south of the border and in markets abroad.

“The beauty of Tims is that it has a product that is loved around the world,” Kobza said, noting coffee – which many Canadians will tell you Tim Hortons does pretty well – is now a globally consumed beverage, transcending cultures much more easily than other menu items such as hamburgers and fries.

MORE: Canadians are opening their wallets wider at Tim Hortons

The goal is to get the expansion ball rolling more quickly, and pursue the model 3G forged at Burger King of signing “master” franchise agreements with domestic operators who have the local know-how to succeed.

“We need a more aggressive approach to grow faster. Thankfully, the underlying business is doing quite well. That profitability is what’s going to allow us to attract new franchisees,” Kobza said.

No impact

Restaurant Brands International slashed about 350 jobs in January, weeks after forming the new business. The move wasn’t a surprise to watchers of 3G, an investment company based in Brazil. Tim Hortons’ majority owner has famously acquired a reputation for buying well-known businesses, such as Heinz – and now Kraft – and implementing deep cost cuts.

“3G is the most notorious cost-cutter,” Perry Caicco, retail analyst at CIBC said during a question and answer session with Kobza.

Restaurant Brands execs said Feb. 17 they have largely completed cost-reduction efforts and were now turning their focus toward growth.

MORE: Tim Hortons finished making cuts ‘at this time’

Kobza reiterated that on Thursday, playing down the possibility of further significant changes to the Canadian business, at least where the consumer is concerned. “I think you’ll see us make much less of an impact on marketing and menu” than the firm did at Burger King, he said.

Restaurant Brands has a five-year agreement in place freezing certain costs it charges Canadian franchisees who operate the vast majority of Tim Hortons’ 3,600 domestic locations. Similar to the approach taken with Canadian consumers, Kobza said Restaurant Brands aimed to maintain the status quo with its franchisees.

“We don’t want to have any impact on the consumer experience or how the franchisees interact with us,” he said.