Canada's leading quick-service restaurant brand, Tim Hortons operates a chain of more than 4,000 coffee and donut shops across the country and in several US states. The eateries' menu features a variety of coffees and cappuccino, along with donuts, Dutchies, bagels, and other baked goods. In addition, Tim Hortons serves a lunch menu of soup, sandwiches, and chili. The chain includes freestanding as well as kiosk and mall-based units; all but about 20 of the locations are operated by franchisees. Tim Hortons also owns the Cold Stone Creamery ice cream shop chain.
During 2011, the company opened 44 new Tim Hortons and closed 2 co-branded restaurants in Canada. In the US last year, Tim Hortons opened 19 Cold Stone Creamery co-branded restaurants but only one new Tim Hortons.
Tim Hortons has focused mostly on its home turf in Canada, where it plans to open roughly 600 new locations by the end of 2013. The chain will look to Quebec, western Canada, Ontario, and major urban areas for expansion opportunities.
With its aggressive franchising efforts, Tim Hortons has come to dominate the quick-service restaurant sector in Canada, eclipsing both US-based giants McDonald's and Starbucks in number of locations. Franchising has helped the chain expand rapidly, especially in high-traffic areas such as airports, shopping malls, and highway rest areas. Imperial Oil, for example, has donut kiosks at many of its Esso service stations.
While fees and royalties paid by local operators account for about a third of Tim Hortons' sales, the company also supplies its franchisees with coffee and food ingredients through a network of five distribution centers across Canada. (Operators in the US use third-party suppliers.)
Those efforts to expand the chain wouldn't be successful, of course, if not for the popularity of Tim Hortons. The brand has become a signature part of Canadian culture with legions of fans devoted to their daily dose of coffee. To maintain that level of popularity, Tim Hortons focuses on delivering high quality coffee and food items and maintaining, rather than re-inventing, the status of the brand. It helps too that the chain can claim a connection to a former Toronto Maple Leafs star, namesake and co-founder Tim Horton.
In 2010, Tim Hortons sold its 50% stake in Maidstone Bakery, which supplies all the company's donuts as well as some other baked items. Joint venture partner ARYZTA, a Swiss baked goods provider, paid about CAD$475 million ($453 million) to buy out its partner; the bakery will continue to supply Tim Hortons through 2016.
The company was founded in 1964 by hockey veteran Tim Horton and partner Ron Joyce. Following Horton's death in a car accident in 1974, Joyce bought the hockey star's share of the company and remained its sole owner until he sold the business to Wendy's International in 1995 for $540 million in stock.
The US hamburger chain operator helped bankroll Tim Hortons' expansion across Canada and into the US. In some years the donut business actually helped prop up the fast food company's bottom line while its flagship hamburger chain floundered with stagnant or declining sales. Spurred by activist investor Nelson Peltz, Wendy's sold 15% of Tim Hortons to the public through an IPO in 2006 and disposed of its remaining 82% stake later that year.
CEO Don Schroeder stepped down in May 2011 and the company named chairman Paul House interim CEO. – less