BUSINESS

Tim Hortons Raises Prices As Chain Prepares Expansion Into Spain

The move comes as the company faces an internal revolt from franchisees.

08/02/2017 08:50 EDT | Updated 08/02/2017 10:56 EDT
Reuters
Restaurant Brands International Inc. says it has signed a deal with a joint-venture partner to take Tim Hortons to Spain.

OAKVILLE, Ont. — Restaurant Brands International Inc. (RBI) has signed a deal with a joint-venture partner to take Tim Hortons to Spain, the latest in a series of aggressive expansion plans to dominate the global coffee business.

The company also announced it will be raising prices on some hot beverage and breakfast menu items, CTV News reports. The company blames the 10-cent price hikes on "rising operational costs."

It's reportedly the first time Tim Hortons has raised prices since 2014.

RBI, which also owns Burger King and Popeyes Louisiana Kitchen, has made forays into several new markets recently, including Mexico, Britain and the Philippines.

"We are thrilled to announce plans to launch the iconic Tim Hortons brand in Spain, which is one of the largest cafe markets in Europe,'' CEO Daniel Schwartz said in a statement.

The announcement comes as RBI faces an internal revolt by Tim Hortons franchisees in Canada and the U.S. who have accused the company's head office of penny pinching, driving up their expenses and overall mismanagement. RBI has denied the allegations.

Schwartz took note of the efforts of all RBI franchisees as the company reported its second-quarter financial results.

"We appreciate all of the hard work from our franchisees and their teams to deliver a great guest experience, and we are confident in our ability to create further value for all of our stakeholders for many years to come,'' he said.

RBI, which keeps its books in U.S. dollars, said it earned a profit attributable to common shareholders of US$89.5 million or 37 cents per diluted share for the three months ended June 30. That's down slightly from a profit of $90.9 million or 38 cents per diluted share a year ago.

On an adjusted basis, the company said it earned $241.7 million or 51 cents per share in its latest quarter, up from $192.4 million or 41 cents per share in the same quarter last year.

Revenue totalled $1.13 billion, up from $1.04 billion a year ago, boosted by the acquisition of Popeyes.

— The Canadian Press with a file from HuffPost Canada

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