A new coffee war appears to be taking shape in Canada as Tim Hortons pours hundreds of millions of dollars into its existing network while U.S. chain Dunkin’ prepares a return after nearly a decade out of the market.
Tim Hortons, the entrenched Canadian coffee shop leader with roughly 4,000 restaurants nationwide, says it and its franchisees will invest $400 million, or about 289 million U.S. dollars, this year to build 80 new locations and renovate 400 existing ones. The move is intended to strengthen a system that already covers the country, with upgrades focused on improving layouts, increasing the speed of order deliveries, and enabling digital ordering.
At the same time, Montreal-based Foodtastic is working to reintroduce Dunkin’ to the country after securing exclusive national rights to the brand. The Canadian restaurant holding company that acquires, revitalizes, and franchises established food brands plans an initial rollout of about 15 Dunkin stores in 2026, with more to follow as it secures locations and signs franchise partners.
“Tim Hortons has been iconic for years, but something changed after 3G took over,” Foodtastic founder Peter Mammas said in an interview, pointing to the 2014 deal that folded the once-independent Canadian coffee chain into Restaurant Brands International, a global fast‑food owner that also controls Burger King.
Mammas said his push to revive Dunkin’ started on a personal level.
“My daughter went to Boston for school, and she got obsessed with it, and then I got obsessed,” he said. “Every time I visited, I would go try it and compare it, and I found the products were better, more relevant, more geared to young people.”
Foodtastic, which operates more than 1,200 restaurants across Canada, spent 18 months negotiating the deal with Dunkin’s U.S. parent. “It took about a year and a half,” Mammas said. “You make the deal and then the lawyers try to screw it up, but both sides made it work.”
'Incredible' response to Dunkin'
The first new Dunkin’ locations are expected to open in and around Toronto and Montreal. Mammas said the company is already seeing strong demand from landlords and franchisees.
“We had planned about 15 stores for 2026, but I think we’ll build more than that because the response has been incredible,” he said.
Dunkin’ has no operating locations in Canada today and will need to rebuild its network site by site. Plans include new standalone stores with drive-thrus, along with conversions and other formats. Mammas said the focus is on prime locations rather than blanket coverage. “We don’t have to be at every single corner of every city," Mammas said. "We want good locations.”
That sets up two very different strategies. Tim Hortons is upgrading and reinforcing a system that already dominates the market. Dunkin’ is starting from scratch, working through site selection, leasing and construction before it can scale.
The two chains have been here before. Dunkin’, then operating as Dunkin’ Donuts, once had hundreds of locations across Canada, with a strong base in Quebec. But as Tim Hortons expanded across Ontario and Western Canada, Dunkin’ struggled to keep pace outside its core markets.
Legal disputes with franchisees added to the business decline. Quebec operators sued in 2003, arguing the company failed to support the brand as competition intensified. Courts later ruled in favour of the operators and awarded damages, but by then Dunkin’s footprint had largely disappeared. The last stores closed in 2018.
Mammas said the Dunkin' returning to Canada will target a different audience, with a greater focus on beverages and a new consumer demographic.
“They’ve made it younger,” he said. “When you look at what they’re doing with beverages and social media, you can see there’s a real opportunity.”
The first round of the battle between the coffee giants took decades to play out. The next one is starting with one company defending its ground and the other trying to take it back, one site at a time. Representatives of Tim Horton's failed to reply to a series of emails requesting comment.