Tims China to Develop and Subfranchise Popeyes in China and Macau
On February 9, TH International, the exclusive operator of Tim Hortons coffee shops in China (Tims China) announced that its board of directors had approved an agreement to develop Popeyes, the fried chicken chain, in mainland China and Macau. This is TH International’s first big move after it was listed on the Nasdaq in September last year.
Popeyes was founded in Louisiana in 1972, and has opened more than 3,900 stores worldwide, making it one of the most popular fried chicken fast food chains in the world. Together with Tim Hortons and Burger King, Popeyes is owned by Restaurant Brands International, a large fast food holding company. However, Chinese consumers may not be as familiar with Popeyes as they are with Tim Hortons.
Popeyes’ history in China has been difficult. Popeyes entered the Chinese market as early as 1999 with a goal of opening 390 stores within three years, or by 2001. However, in 2002, news emerged that the fried chicken chain closed many of its locations in Beijing. Then, in 2003, Popeyes completely withdrew from the Chinese market. Shortly afterward, in 2007, the company tried to return to the Chinese market through a franchising model, but those efforts also failed.
In 2020, Popeyes was re-introduced into China yet again by TAB Foods Investments, a franchise distributor of Burger King in China, and gradually opened nine stores nationwide. But in 2022, news spread that Popeyes China quietly closed seven of its storefronts.
On August 10 of last year, Popeyes stated that although several stores were indeed closed, it did not plan to leave China. On the same day, Restaurant Brands International announced that it had entered a non-binding contract for the exclusive development of Popeyes in China with Cartesian Capital Group, a private equity firm co-established by TH International and Restaurant Brands International.
According to Chinese media outlet Food Innovation, Lu Yongchen, CEO of TH International, said that the right timing, place, and market conditions are critical to success. Popeyes was previously unsuccessful in its attempt to enter the Chinese market, even with a strong development plan. The past three years have been in a state of pandemic, but now China’s consumer market is in a stage of rapid recovery and open to development opportunities. Lu believes that there is an opportunity for TH International and Popeyes to partner and capitalize on the current market environment.
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He further explained that TH International has established a strong footprint in China with over 600 stores. Popeyes is still in its infancy in the Chinese market, but has a positive brand reputation. Together, the parties can combine their expertise in digital platforms, supply chains, and storefront expansion to succeed in the Chinese market.
Lu also noted three critical factors underlying the successful operation of Burger King and TH International in China. First, choose a good brand. Second, build a strong team. Third, invest capital in building stores and driving brand influence.
After the partnership between TH International and Popeyes was announced, some Chinese Internet users joked that “the combination of coffee and fried chicken is coming.” However, this combination of offerings already exist at KFC and McDonald’s, which have stores all over major cities in China.