Burger King just announced that it intends to buy the Canadian doughnut and coffee chain Tim Hortons. In addition, Burger King plans to move its headquarters to Canada, which critics claim is being done in order to lower its overall corporate tax rate.
Although this acquisition will give Burger King more resources to work with, it will also allow it to compete better in the breakfast category with McDonald’s. McDonald’s has long been the king of fast food breakfast.
Burger King Remains in Control
Even though the new company headquarters will move to Canada, much of the control of the company will remain in United States. Current Burger King owners will remain the majority owners of the new company as well.
Burger King says it will continue to run the company from its offices in Miami, Florida, while Tim Hortons brand will be run out of Canada.
Tim Hortons will Become a Bigger Name in the United States
Tim Horton has never really caught on in the United States, except in a few select market areas. However, this is likely to change with this acquistion.
Burger King will most likely use their breakfast items such as doughnuts, coffee, and bagels in Burger King’s breakfast menu. Although the Tim Horton brand might not gain more awareness in the United States, its products certainly should.
If you would like to know the latest Tim Hortons prices, you can view them here.
Public Backlash Against the Company
There is no doubt about it, Burger King will face a public backlash once this deal goes through. Majority of the public is against corporations moving out of the country in order to evade or lower their tax responsibility, however, it is tough to say if it will have a lasting impact.
Burger King is already seeing some customer backlash on its Facebook page where customers are calling on other customers to boycott the company’s products.
Historically, most companies have been able to recover from such backlash, so the company should not have long-lasting problems there.