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Tim Holton, famous for "Canadian Cafe," will start its franchise business next month. This is to overcome the problem of slow store expansion due to the operation of direct stores. It has set a goal of increasing the number of stores from the current 16 to 150 in three years. Attention is focusing on whether Tim Holton will stand out in the Korean cafe market, where competition is fierce enough to fit the expression that it has reached saturation. Team Holton in Korea is operated by BKR, a restaurant brand operator.

According to the food industry on the 27th, Canadian coffee shop Tim Holton will launch a franchise business in Korea next month by posting an announcement on recruiting franchisees. It means that it will break away from direct management store-centered operation two years after entering Korea. "Considering that it is in the early stages of the project, we will recruit shop owners around key commercial districts in the Seoul metropolitan area with a large floating population," an industry official said. "After that, we will expand our foothold to metropolitan cities and provinces in response to market demand."

Tim Holton began as a small coffee shop in Canada in 1964 and has now grown into the second largest coffee franchise in the world. It has more than 6000 stores in 19 countries around the world. Starbucks is the top company with 40,576 stores, followed by Costa (British coffee brand) with more than 4,000 stores, followed by Tim Holton. Team Holton opened a flagship store in Gangnam-gu, Seoul in 2023 and entered Korea to create an "open run." Within a month of entering the market, it sold about 300,000 donuts and more than 100,000 cups of coffee.

Team Holton started its franchise business to overcome the limitations of its direct store-based business. The strategy is to secure a firm position in Korea by increasing the number of stores at a low cost with the power of franchisees. Currently, Team Holton operates 16 stores in Korea, including the Magok One Grove store that opened on the same day. An industry official said, "The franchise business is a measure to establish brand power with a 60-year history in Korea."

Another reason for running a franchise business is that the strength of "direct cooking in-store when ordering" works in Korea. The company operates a large in-store kitchen (Tims Kitchen), which is a rare franchise coffee brand, and cooks food directly. Every day, I bake doughnuts and cook sandwiches in Tim's Kitchen. This contrasts with competitors such as Starbucks receiving completely cooked food.

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Tim Holton had a strategy of selling the Canadian atmosphere. It means that it will make you feel like you are at a local coffee shop in Canada. The pricing strategy is summarized as "expensive rather than cheap coffee and cheaper than Starbucks." Tim Holton's americano costs 4,000 won, which is cheaper than Starbucks' tall-size americano (4,700 won).

Team Holton is expected to first work on stabilizing its franchise business. The 'consultant' dispatched by the headquarters manages stores in a designated area. They help communicate between the franchise representative and the headquarters and support the operation of the franchise. Trainers are dispatched to franchisees and will stay on site for 10 days to support franchisees.

It is difficult to guarantee whether Tim Holton's aggressive expansion of stores will have a great effect in the face of the saturation theory of the domestic cafe market. This is because there are cases where the success of coffee brands that dominated the overseas market did not continue in the domestic market. Blue Bottle, which entered the Korean market in 2019, recorded an operating profit of 1.946 billion won in 2023. This is a 16.6% decrease from the previous year. Operating profit has been on the decline every year since it hit 2.7 billion won in 2021.