It is safe to say that the last 24 hours have not been good for Canada. The nation has been gripped in fear following the announcement of the buyout of the iconic chain Tim Hortons by Burger King. Many Canadians are afraid that their beloved Tim Hortons may soon be gone, however these fears may be unfounded.
Still the same company.
According to a press release issued by Tim Hortons on Tuesday, Tim Hortons announced that the two companies would be run as separate entities, which will preserve the integrity of both companies. Also, Tim Hortons will continue its commitment to Canada. According to the press release,
Tim Hortons will continue to manage its own operations, headquartered in Oakville, and continue its significant community involvement, including the Tim Horton Children's Foundation, TimBits Minor Sports Program, Tim Hortons Coffee Partnership and its community, sustainability and charitable programs.
This transaction will not change the way Tim Hortons works with its franchisees or its business model. There are no plans to change the rents, royalty structures, customer-facing programs, Franchise Advisory Board or the franchisee-facing operational resources Tim Hortons provides to support its franchisees in building their businesses.
Likewise, there will be no changes to restaurant-level employment and the new company will rely heavily on the Tim Hortons talent pool to staff the new organization at all levels of responsibility. As a result, the global company's management and shared services operations will consist of a meaningful number of Canada-based executives.
As you can see, the buyout should cause little change within the company, or to the operating structure of Tim Hortons. In fact, both restaurants will operate independently. Now this does not mean that there will not be some changes that will occur. The biggest change will actually be a positive one for both companies.
A tale of two quick serve restaurants.
The biggest change to occur will deal with expansion. Each chain will be able to expand their customer base by operating on a more global scale. In order to understand this better, here is a quick look at both companies. Burger King is the third largest quick serve restaurant in the United States behind McDonald's and Chick-fil-A. Despite this position, Burger King still operates 14,000 stores worldwide. This buyout will allow Burger King to have a greater foot hold in the global market. "By bringing together our two iconic companies under common ownership, we are creating a global QSR powerhouse. Our combined size, international footprint and industry-leading growth trajectory will deliver superb value and opportunity for both Burger King and Tim Hortons shareholders, our dedicated employees, strong franchisees, and partners. We have great respect for the Tim Hortons team and look forward to working together to realize the full potential of these two extraordinary businesses,” said Alex Behring the CEO of Burger King and managing partner of BK's parent company 3G Capital.
Tim Hortons operates 18,000 stores throughout the world. This merger will allow Tim Hortons to stretch its brand further into the United States and abroad. Marc Caira, CEO of Tim Hortons made the following statement: “We are very proud of the great history of our organization and the progress we have achieved in creating value and delivering the ultimate experience for our guests. As an independent brand within the new company, this transaction will enable us to move more quickly and efficiently to bring Tim Hortons iconic Canadian brand to a new global customer base. At the same time, our customers, employees, franchisees and fellow Canadians can all rest assured that Tim Hortons will still be Tim Hortons following this transaction, including our core values, employee and franchisee relationships, community support and fresh coffee.”
As many Canadians are still reeling from the news of this buyout, there seems to be little evidence that Tim Hortons will be revamped. The only change that this examiner can see is that each company will have the opportunity to share their unique brands in new markets. This can only be a win-win for both companies, and should be embraced by all. So fear not Canada, your Tim Hortons is not going away, it will just enter into the USA.
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