Tims China Accelerates Franchise Push Amid Store Closures to Regain Profitability
Dubai, 27 August 2025 (Qahwa World) – Tims China is doubling down on its sub-franchise strategy as the Canadian coffee chain’s master licensee in China seeks a path to sustainable profitability in one of the world’s most competitive coffee markets. The company is closing underperforming outlets while rapidly expanding its franchised network across new cities and high-traffic locations.
The operator of Tim Hortons in China reported a 4.9% year-on-year revenue decline in the second quarter of 2025, falling to RMB 349m ($48.7m). The drop was largely driven by a 12.5% contraction in sales from company-operated stores, following the closure of 49 outlets during the three-month period ending 30 June, including 41 small-format Tims Express locations.
Despite the top-line decline, the strategic retreat yielded financial relief. Adjusted corporate EBITDA returned to positive territory at RMB 2.2m ($300,000), a turnaround from a RMB 29.3m ($4m) loss in the previous quarter. Adjusted net loss narrowed 16.2% year-on-year to RMB 39.7m ($5.5m), while net loss from continuing operations fell 24% to RMB 75.9m ($10.6m).
At the end of June, Tims China operated 1,015 stores nationwide, with 566 company-operated and 449 franchised outlets. The franchising model is emerging as a key growth engine: franchised store revenues surged 50% year-on-year to RMB 67.1m ($9.4m), supported by aggressive expansion into transport hubs, hospitals, and universities.
“Leveraging several franchisee partnerships, we expanded our store footprint into 98 cities, including Zibo in Shandong, Lishei in Zhejiang, Luan in Anhui, and Jincheng in Shaanxi,” said Yongchen Lu, CEO of Tims China.
However, challenges remain. Like-for-like sales across company-operated stores fell 3.6%, with transactions down 3.2% and average ticket size shrinking 6.9% year-on-year, underscoring pressure on consumer spending and brand positioning in China’s crowded coffee landscape.
The second quarter marked the fifth consecutive year-on-year decline in group revenues, yet management views the franchising shift as a pathway to long-term stability. By reducing exposure to loss-making outlets and capitalizing on franchise partnerships, Tims China aims to balance expansion with profitability — a strategy increasingly favored by global coffee chains navigating China’s competitive market.
