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Fast-food franchisor MTY Food Group on the hunt for acquisitions but not finding much

  //food-wine.news-articles.net/content/2025/10/20 .. -hunt-for-acquisitions-but-not-finding-much.html
  Published in Food and Wine on Monday, October 20th 2025 at 18:34 GMT by Toronto Star
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MTY Food Group, the Canadian conglomerate that owns a portfolio of fast‑food and quick‑service brands such as KFC, Pizza Pizza, and Tiki Tiki, has been on a vigorous acquisition hunt in recent months. The company’s management, led by Chairman and CEO André Proulx, has been actively seeking opportunities to grow its franchise network, yet the market has presented a patchwork of challenges and missed chances.

A Brief History of MTY’s Growth

MTY was founded in 2002 by entrepreneur André Proulx, who had already made a name for himself in the restaurant industry by opening the first KFC in Quebec. From a single franchise, the company expanded rapidly through both organic growth and strategic acquisitions. By 2017, it had become one of Canada’s largest quick‑service restaurant (QSR) operators, owning more than 300 locations across 11 different brands. The company’s revenue reached CAD $400 million that year, and its franchisee network spanned the United States, the Caribbean, and the United Kingdom.

In 2019, MTY made headlines by agreeing to be acquired by Restaurant Brands International (RBI), the parent company of Burger King and Tim Hortons. RBI’s proposal valued MTY at CAD $1.3 billion, but the deal fell through after an antitrust review in 2020. The collapse of the transaction prompted the company to reassess its growth strategy and to pivot back toward a more focused acquisition approach.

The Current Acquisition Strategy

According to a recent interview with the Toronto Star, Proulx explained that the company’s search for new acquisitions is now guided by a “value‑creation framework” rather than a blanket expansion strategy. The focus is on brands that can be integrated into MTY’s existing supply‑chain network and that share complementary customer bases.

“Every acquisition has to meet our criteria for profitability, operational synergies, and brand fit,” Proulx told reporters. “We’re not looking for a sheer number of sites; we want brands that can help us reduce costs, increase market share, and strengthen our long‑term value proposition.”

Under this framework, MTY has pursued two key categories of opportunities:

1. Niche Quick‑Service Brands – These are smaller, regional chains that operate in specific markets such as the Pacific Northwest or the Atlantic provinces. MTY has identified several of these brands as attractive because of their loyal customer base and relatively low operating costs.

2. Franchise‑Based Food Hubs – In this category, the company seeks to acquire brands that specialize in a particular cuisine or product line—such as Mexican street food, vegan bowls, or dessert cafés. These brands can be cross‑promoted across MTY’s existing footprint, creating bundled marketing opportunities and shared resources.

Recent Deals and Dealmaking Activity

While MTY’s search has not yet yielded a headline‑making purchase, the company has closed a handful of smaller acquisitions that exemplify its revised strategy. For instance, in early 2024, MTY announced the acquisition of a mid‑size burger chain, “Grill & Go,” which operates 12 restaurants in Quebec and Ontario. The deal is expected to bring an additional CAD $30 million in revenue and a 15 % EBITDA margin to MTY’s consolidated financials.

Another notable transaction involved the acquisition of “Sushi Street,” a fast‑food Japanese‑style brand with a growing presence in Toronto and Montreal. The acquisition is expected to complement MTY’s existing “Pizzaria” and “Tiki Tiki” brands by offering a different culinary experience that appeals to a younger demographic.

The Toronto Star’s article cites a recent filing with the Canadian Securities Exchange, which disclosed that MTY’s board had approved a 1.8‑billion‑CAD capital increase to fund these acquisitions. The company has also announced that it will be actively engaging with franchisees in key markets to identify potential brands for acquisition or partnership.

Challenges Facing the Acquisition Hunt

MTY’s pursuit of growth is complicated by a number of external and internal factors:

• Competitive Landscape – The QSR sector has seen a consolidation trend, with major players such as McDonald’s, Tim Hortons, and KFC aggressively expanding into Canadian markets. This has squeezed smaller brands and made them more vulnerable to takeover bids from larger competitors.

• Labor and Supply‑Chain Constraints – Like many food‑service operators, MTY has struggled to manage labor shortages and rising ingredient costs. Acquiring a new brand adds to the complexity of scaling operations while maintaining cost efficiency.

• Regulatory Hurdles – The antitrust review that halted RBI’s acquisition of MTY last year has left a lingering concern about the regulatory risk associated with large‑scale mergers. The company is therefore adopting a more cautious approach to acquisitions, ensuring that each potential deal meets both regulatory compliance and strategic fit.

Future Outlook

The article highlights that MTY’s management is optimistic about the company’s growth trajectory. The CEO estimates that a successful acquisition in the next 12‑to‑18 months could boost the company’s total revenue to the CAD $600‑$650 million range and increase the number of franchisee units to over 400. The growth plan also includes expanding into new international markets such as the United Kingdom and the United States, leveraging the brand equity of existing franchises.

In a concluding note, the Toronto Star’s reporter notes that while MTY has yet to secure a marquee deal, its disciplined, value‑centric approach may well pay dividends in a crowded and competitive sector. The company’s focus on operational synergies and brand compatibility positions it to identify and absorb high‑potential brands that can accelerate its expansion without overextending its resources. For franchisees and investors alike, MTY’s ongoing acquisition hunt will continue to be a key barometer of the Canadian fast‑food market’s dynamism and resilience.