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How Important Is Tim Hortons To Restaurant Brands International's Growth?


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Restaurant Brands International ( QSR ) operates three restaurant chains – Burger King ( BK ) (which is a strong competitor to McDonald’s), Tim Hortons (TH) (a coffee chain which has the majority of its restaurants in Canada), and the recently acquired Popeyes Louisiana Kitchen (PLK).

Our interactive model which you can access here analyzes how much of the future growth of Restaurant Brands International (in terms of revenues and profitability) is likely to come from its Tim Hortons coffee chain.

As can be seen from the above charts, Tim Hortons is likely to contribute significantly to RBI’s growth in the next few years. This implies that if Tim Hortons is not able to meet its growth estimates, the valuation of RBI can be impacted adversely.

We believe that the growth potential for Tim Hortons is high since it operates less than 5,000 restaurants compared to Burger King which operates nearly 16,000 restaurants. This chain can become a key growth driver for RBI in the long term. (Read Can Tim Hortons Be The Key Growth Driver For Restaurant Brands International In the Long Term? )

While RBI is facing issues with franchisees of Tim Hortons, which can impact its expansion and revenue growth, this segment is a crucial growth driver for the company in the short and long term. An increased management focus on this segment can improve RBI’s valuation in the long term.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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