Tim Hortons, Inc. is positioned within the market as a mature company with a strong consumer franchise. Broadly, the entity enjoys a strong brand, very profitable franchise income, strong cash flow, high returns, strong same store sales, and a low-risk business model.
Tim Hortons, Inc. engages in the ownership and operation of quick service restaurants, Tim Hortons restaurants, in Canada and the United States. The company offers coffee, flavoured cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh baked goods.
Broadly, the restaurant industry has benefited from a long term trend towards eating out, driven by a growth in disposable income, a decline in the price difference between dining out and eating at home, and an increase in the number of dual-income and single-parent families. Demand has remained strong in the broad sector, leading to the conclusion that casual dining is less sensitive to economic conditions than previously assumed.
Tim Hortons operates within the broader context of the mature foodservice industry, which is characterized as having little growth prospects. Tim Hortons operates in the highly competitive Coffee and Baked Goods (CBG) sector of the Canadian Quick Service Restaurants (QSR) market. Despite
The QSR market is intensely competitive in terms of pricing, quality and speed of service, the number and convenience of locations, attractiveness of facilities, personnel and selection of food. Within the sector, Tim Hortons franchises compete with a variety of international, regional and local restaurants. The consumers are very demanding in terms of the speed and quality of service; they have well-established preferences and are extremely price-sensitive. As such, the customers are powerful enough to influence downward price pressures, demand higher quality and speed of service, as well as require convenient locations. In addition, Tim... [continues]
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