Tim Hortons expanding overseas

Feb. 6, 2011

Tim Hortons has inked a master license agreement with Apparel Group in Dubai for up to 120 multi-format restaurants in markets in the Gulf Cooperation Council (GCC).

The contract calls for both standard and non-traditional units. Locations will be developed and operated by Apparel Group in the GCC markets of United Arab Emirates, Qatar, Bahrain, Kuwait and Oman. The initial goal is to open five restaurants this year.

The agreement with Apparel is based primarily on a royalty model.

"Our top strategic priority is continuing to grow our Canadian and U.S. businesses, which are the primary drivers of shareholder value. We also believe there is an opportunity over the long-term to explore international opportunities and seed the Tim Hortons brand in various markets outside of North America,” said Don Schroeder, president and CEO, Tim Hortons.

Schroeder added that the company’s approach is targeted and will minimize capital requirements while still allowing for other international growth opportunities.

“Our due diligence has identified the GCC as an international development opportunity for the Tim Hortons brand based on our premium coffee and baked goods offering, value positioning and friendly, efficient in-store experience," Schroeder said.

Apparel Group operates more than 50 leading international brands – including Tommy Hilfiger, Kenneth Cole, Aldo, Aeropostale, Nine West and Cold Stone Creamery – and runs more than 600 stores in 14 countries.

The announcement of an overseas expansion will be Tim Hortons’ initial growth outside of North America. The chain includes 3,649 systemwide restaurants, with 3,082 in Canada and 567 in the United States.

Based on success in this initial market entry in the GCC region, Tim Hortons’ growth strategy is designed to then evaluate potential additional regional market entries.

The company is also in the middle of a North American expansion plan, which aims to achieve 900 openings within the next three years.

Topics: Business Strategy and Profitability , Coffee/Bakery/Donut , Franchising & Growth , International , Operations Management

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