Tim Hortons to Open New Locations in Rural Areas

Tim Hortons plans to open new locations this year, mainly in Western Canada and rural areas nationwide. The brand continues to see strong traffic drive sales growth for its parent company, Restaurant Brands International (QSR.TO)(QSR).

Over the last few years, the number of Tim Hortons restaurants across the country has stayed flat. The company focused on boosting franchisee profitability by improving its product offering and expanding in the P.M. food category by launching new items like flatbread pizza. Net restaurant count at Tim Hortons was flat in 2024, rising just 0.3 percent, with restaurant count totaling 4,539 by the end of the year, roughly in line with the store count in 2023 (4,525) and 2022 (4,519). But that’s expected to change in 2025.

What Has Been Said?

“On the development front, we’re very excited for Canada to return to positive net unit growth in 2025, supported by compelling unit economics and ambitious restaurant owners looking to expand, especially in under-penetrated regions like western Canada and rural areas,” Joshua Kobza, chief executive of RBI, said on a conference call with analysts on Wednesday.

“Tim Hortons remains one of the only brands in Canada consistently growing traffic, which was up nearly 3 percent in 2024, and we’re doing it profitably.”

RBI

Over the last two years, RBI, which operates the Burger King, Popeyes, and Firehouse Subs brands, has focused on improving franchise profitability. On Wednesday, the company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) at Tim Hortons locations was an average of $305,000 this year, up from $280,000 in 2023 and $220,000 in 2022. Tim Hortons remains the bright spot for RBI, with its EBITDA average per location surpassing Burger King’s ($205,000), Popeyes ($255,000) and Firehouse Subs ($90,000).

Tim Hortons saw comparable sales, a key metric in the retail industry that excludes recently opened locations. This would increase by 4.3 percent in 2024. Kobza says this “significantly” outpaced major competitors in the market. This saw comparable sales decline 0.5 percent on average last year. The sales jump was driven by traffic growth, with the chain delivering its 15th consecutive quarter of positive traffic growth.

Kobza on Tim Hortons

The coffee and doughnut chain has also focused on improving drive-thru times. According to Kobza, the average weekday morning drive-thru time at Tim Hortons has been enhanced. This was done to about 28 seconds per car at the window. To which he says, “solidifies Tims as one of the fastest drive-thru concepts in North America.”

“Every one-second reduction in drive-thru time translates to approximately $30,000 incremental annual sales per restaurant.”

Sales

RBI’s total sales, led by Tim Hortons, reached $2.3 billion in the fourth quarter of the year, beating expectations. According to data compiled by LSEG, analysts had expected total sales to top $2.28 billion. Tim Hortons’ total sales reached $1.03 billion in the quarter. Adjusted earnings came in at 81 cents per diluted share. This is up from 75 cents per diluted share last year and above analysts’ expectations.

Shares of RBI jumped as much as three percent in early trading on Wednesday. This was done following the release of the fourth-quarter earnings. The stock ended the trading day at $93.93 per share on the Toronto Stock Exchange. A drop of nearly two percent compared to Tuesday’s close was seen.