Dunkin’s Canadian comeback to start in Toronto and Montreal

In a country dominated by Tim Hortons, will anyone run to Dunkin’? Montreal-based restaurant operator Foodtastic thinks so, and plans to bring hundreds of the doughnut shops to Canada as early as this year.

The company said Tuesday it has signed a master franchising agreement with Inspire Brands to bring one of America’s largest coffee chains back to Canada. 

The brand will start with locations in Toronto and Montreal before expanding elsewhere, Peter Mammas, CEO of Foodtastic told CBC News. He said the plan is to start by establishing a footprint in Ontario and Quebec, before expanding to other provinces.

“We’ll probably open the first door within six months and within the year we’ll be opening one a month,” he said.

“It’s a younger, cooler brand. And I think it’s something that’s missing in the landscape.”

WATCH | Dunkin’ poised to return to Canada:

Dunkin’ returning to Canada’s crowded coffee market

American doughnut chain Dunkin’ is set to return to the Canadian market after reaching a deal with Montreal-based Foodtastic, which owns chains including Milestones and Second Cup.

While Dunkin’ — formerly known as Dunkin’ Donuts — once had hundreds of Canadian locations, it departed in 2018 after Quebec franchisees successfully sued the company for not sufficiently promoting the brand. The chain, founded in 1950, sells coffee, donuts and breakfast sandwiches.

Can the American giant lure customers in Canada?

While hundreds of locations may sound like a lot, it’s not a huge threat to Tim Hortons and its more than 4,000 stores, said David Soberman, a professor of marketing at the University of Toronto. 

He said when a big company enters a space already dominated by an established presence, it’s often those with less market share that suffer the most. 

“The two biggest players have the heft, if you will, to be able to compete with each other,” he said. “But some of the smaller chains might find life kind of difficult.”

He said Canadian consumers already flock to American brands, with 1,400 McDonald’s locations dotting the country. 

WATCH | How coffee chains are adding protein to the menu:

Coffee chains look to cash in on protein’s popularity

Starbucks will soon follow Tim Hortons as the latest coffee chain to offer additional protein in its caffeinated drinks, a move experts say is likely to benefit profit margins more than customers’ health.

Robert Carter, president of the Coffee Association of Canada, said there’s still room for growth in the Canadian coffee market.

“When we look at the trends that are taking place in the U.S., they’re very similar of what we see within the Canadian market,” he said.

That means for an American brand coming into Canada, there are more similarities in coffee than other types of food service.

Some sticking with Tim’s, others excited

While Mammas says he’s confident Canadians are ready for a new coffee brand, several customers walking out of a Tim Horton’s in downtown Toronto on Tuesday said they’ll stick with the red and white cup. 

“I think people are loyal to Tim Horton’s and the Canadian brand,” said Jeff Small. 

Another customer, Jason Goring, put a finer point on his support for the national identity behind Tim Horton’s, echoing a sentiment that led to a Buy Canadian movement last year.

“I don’t like America at all,” he said. “[U.S. President Donald] Trump is the biggest evil in the world.”

Mammas counters that point by saying in addition to his company being based in Quebec, he said the Dunkin’ shops will be run by Canadian franchisees.

“It’s definitely a very Canadian way of doing this,” he said.

Meanwhile, some others are counting down the days. Toronto-based, flight attendant Jay Antflick said the brand provides nostalgia for road trips across the United States as a kid.

“Where I grew up, like Northeast, especially in Massachusetts, like Boston, it was huge over there,” he said. 

Antflick travels south of the border frequently for work and says he gets Dunkin’ up to three times a day when he’s there. He said he’ll line up for opening day in Toronto. 

“I’m going to order the largest size black iced coffee with a shot of hazelnut and whatever seasonal flavour they have.”