Tim Hortons Totally Explained

Everything about Tim Hortons totally explained

Tim Hortons Inc. is a coffee-and-doughnut fast food restaurant chain. Founded in Hamilton, Ontario, in 1964, the store rapidly expanded across Canada to become the country's largest quick-service food chain.
Tim Hortons franchise stores are plentiful in Canadian cities and towns. As of July 1, 2007, there were 2,733 outlets in Canada, 345 outlets in the United States and one outlet just outside Kandahar, Afghanistan. Recent experiments with international expansion have seen Tim Hortons chains open elsewhere in the world, including, a small outlet at the Dublin Zoo. Tim Hortons also have an agreement with the SPAR convenience store chain in the UK, which has resulted in Tim Hortons coffee and doughnuts being sold at small self service counters in 16 SPAR stores. Tim Hortons has supplanted McDonald's as Canada's largest food service operator; it has nearly twice as many Canadian outlets as McDonald's, and its system-wide sales surpassed those of McDonald's Canadian operations in 2002. The chain accounted for 22.6% of all fast food industry revenues in Canada in 2005.

History

Tim Horton and Ron Joyce

The first "Tim Horton" (the "s" came later) store opened in 1964 in Hamilton, Ontario. The business was founded by Tim Horton, who played in the National Hockey League from 1949 until his death in a car accident in 1974. Soon after Horton opened the store, he met Ron Joyce, a former Hamilton police constable. In 1965, Joyce took over the fledgling Tim Horton Donut Shop on Ottawa Street North in Hamilton. By 1967, after he'd opened up two more stores, he and Tim Horton became full partners in the business. Upon Horton's death, Joyce bought out the Horton family and took over as sole owner of the existing chain of forty stores. Joyce expanded the chain quickly and aggressively in geography and in product selection, opening the 500th store in Aylmer, Quebec, in 1991.
   Ron Joyce's aggressive expansion of the Tim Horton's business resulted in two major changes in the coffee and doughnut restaurant market: independent doughnut shops in Canada were virtually eliminated, and Canada's per-capita ratio of doughnut shops surpassed those of all other countries.
   The chain later went public under the corporate name "Tim Donut Limited". By the 1990s, the company name had changed to The TDL Group Ltd. This was an effort by the company to diversify the business, removing the primary emphasis on doughnuts.
   Some older locations retain signage with the company's name including a possessive apostrophe, despite the fact that the official styling of the company's name has been Tim Hortons, without an apostrophe, for at least a decade.

Merger with Wendy's

In 1992, the owner of all Tim Hortons and Wendy's Restaurants in Prince Edward Island, Daniel P. Murphy, decided to open new franchise outlets for both brands in the same building in the town of Montague. Murphy invited Joyce and Wendy's chairman Dave Thomas to the grand opening of the "combo store", where the two executives met for the first time and immediately established a rapport. Murphy's success with combining coffee and doughnuts with Wendy's fast food led to the August 8, 1995, agreement resulting in Wendy's International, Inc. merger with TDL Group. Joyce became the largest shareholder in Wendy's, even surpassing Thomas. TDL Group continued to operate as a separate subsidiary from its head office in Oakville, Ontario, although Joyce eventually retired from active management to pursue other interests.
   Under pressure from rival restaurateur Nelson Pelz, in late 2005, Wendy's announced it would sell between 15% and 18% of the Tim Hortons operations in an initial public offering, which was completed on March 24, 2006, and subsequently said it would spin off to shareholders its remaining interest by the end of 2006. Wendy's cited increased competition between the two chains and Tim Hortons' increasing self-sufficiency as reasons for its decision, but the company had been under shareholder pressure to make such a move because of the strength and profitability of the Tim Hortons brand. It should be noted, however, that Pelz in 2008 acquired Wendy's after pressuring them initially to spin off Tim Hortons.
   Shares of the company began trading on March 24, 2006, with an initial public offering of C$27 per share, raising over $700 million in the first day of trading. On September 28 2006, Wendy's spun off the rest of its shares in Tim Hortons, by distributing the remaining 82% to its shareholders. On the same day, Tim Hortons was added to Canada's benchmark stock-market indicator, the S&P/TSX Composite Index, and to the S&P/TSX 60.
   On February 2, 2007, Wendy's reported a 90% drop in earnings at the end of the fourth quarter following the completed spin-off of Tim Hortons, subsequently causing the company stock to drop a total of 4%.

Expansion

TDL Group recorded $1.48 billion in sales in 2005 and has expanded across Canada into small and large markets, as well as into New York, Ohio, Michigan, West Virginia, Kentucky, and Maine.
   While some of the U.S. stores were simply the result of natural expansion into Canadian border areas (for example stores in Maine and the Buffalo, New York area), several U.S. locations were converted from other fast food chains. Between 1996 and 1997, thirty-seven former Rax Restaurants locations in Ohio, Kentucky, and West Virginia were bought and converted to Tim Hortons, as were thirty-five former Hardee's stores in the Detroit, Michigan area; new stores have been built from the ground up in all of these markets as well. By 2004, the chain had also acquired 42 Bess Eaton coffee and doughnut restaurants situated in Rhode Island, Connecticut, and Massachusetts. Several combination Wendy's/Tim Hortons units have also been opened throughout the United States, both in the "traditional" markets of Buffalo and Maine, and in the markets entered through acquisition.
   For many years, Tim Hortons was concentrated in Ontario and Atlantic Canada. In recent years, however, the chain has greatly expanded its presence in Quebec and western Canada.
   Some of Tim Hortons' products have become available in Ireland at some SPAR convenience stores and Tesco supermarkets.

Tim Hortons and the Canadian military

Tim Hortons has many outlets located on or near many Canadian Forces Bases. TDL Group announced in March 2006, in response to a request by Chief of the Defence Staff, General Rick Hillier, its commitment to open a franchised location at the Canadian Forces operations base in Kandahar, Afghanistan. The new Kandahar location opened on June 29 2006 in a 40 foot trailer on the military base. The 41 staff members of the Kandahar outlet have been drawn from the Canadian Forces Personnel Support Agency who received training on such matters as how to handle a potential nuclear or biological attack before working at the military base. The Canadian Federal government subsidizes the operation of the Kandahar outlet in the order of CAD$4-5 million per year.

Growth of the Tim Hortons Chain

Store #1 - Hamilton, Ontario - May 1964
Store #100 - Thunder Bay, Ontario - December 1978
Store #200 - Hamilton, Ontario - December 1984
Store #300 - Calgary, Alberta - February 1987
Store #400 - Halifax, Nova Scotia - February 1989
Store #500 - Aylmer, Quebec - January 1991
Store #700 - Moncton, New Brunswick - October 1993
Store #1000 - Ancaster, Ontario - August 1995
Store #1500 - Pickerington, Ohio - March 1997 (this was also Wendy's 5000th store)
100th U.S. store – Columbus, Ohio - July 31 1998
Store #2000 - Toronto, Ontario - December 2000
Store #2500 - Cayuga, Ontario - September 2003
Store #3000 - Orchard Park, New York - December 14, 2006,

(Source: Tim Hortons Official History)

Tim Hortons' first stores only offered two products - coffee and doughnuts. Take-home cakes are offered in some locations.
Since the mid-1990s, the chain has moved into other areas, including specialty and premium items such as flavoured cappuccino and iced cappuccino, New York-style cheesecake, and a lunch selection that includes soups, chili, and submarine-style sandwiches. In fall 2006, Tim Hortons began rolling out a breakfast sandwich. Consisting of an egg patty, processed cheese slice, and either bacon or sausage as the topper, it has sold well. In October 2007 Tim Hortons launched the Chicken Fajita Wrap, which contains spiced chicken and sautéed vegetables. As of late December 2007, they introduced the new Hash Browns and the Bagel B.E.L.T., a breakfast sandwich that also included lettuce and tomato.
Coupled with the aggressive expansion and expanded menu came the outsourcing of baked goods. Doughnuts, which used to be made at night in order to be ready for the morning rush, are now partially cooked and then frozen and delivered to the restaurants. The restaurants are now able to bake and finish the product throughout the day. As of April 2007, many of the various muffin batters are being revoked, as frozen, premade and prewrapped muffins are being introduced to all bakers at Tim Horton locations.

Brand image

Advertising and promotion

Tim Hortons has one of the most successful marketing operations in Canada. With powerful and effective branding, the store has established itself in the top class of fast-food restaurants in Canada. Canadian Business magazine has twice named Tim Hortons as the best-managed brand in Canada (in 2004 and 2005).
Tim Hortons commercials appear frequently on Canadian television and radio stations, and on billboards. All six of the Canadian NHL rinks have Tim Hortons ads along their boards as well as the Columbus Blue Jackets and Buffalo Sabres, the two areas in the US where the chain is most prevalent. Since 2005, Tim Hortons has also been the title sponsor of the Brier, the annual Canadian men's curling championships, along with the Canadian Ringette Championships. Generally the chain promotes one or two "featured" products every month, such as iced cappuccinos and various sweetened baked goods during the summer, lunch products such as soup or sandwiches during the winter, and its flagship coffee promotion Roll Up The Rim to Win during the early spring. Shortly before December 2007, they discontinued their gift certificates, and replaced them with the QuickPay Timcard, with the Christmas slogan "Because it's hard to wrap a double double" (coffee with two sugars and two cream).
Tim Hortons' advertising slogans have included "You've Always Got Time for Tim Hortons" and, more recently, "Always Fresh. Always Tim Horton's."

Roll Up the Rim to Win

From late February until early May of each year, Tim Hortons holds a very large marketing campaign called Roll Up The Rim to Win. Over thirty million prizes are distributed each year, ranging in value from vehicles to televisions, to store products. Customers determine if they've won prizes by unrolling the rim on their paper cup when they've finished their drink, revealing their luck underneath.
   Advertising for the contest is always very aggressive. The ubiquitous Tim Hortons ads on the boards of hockey rinks change from the normal "Tim Hortons" signage to a "Rrroll up the Rim" display; the timing of the promotion also is key because it's during the height of the NHL season, ensuring that viewers across North America will see the ads. Television and other media are inundated with advertisements that repeat the "R-r-roll up the R-r-im to Win" slogan and encourage the recitation of the phrase using rolled R's to match the announcer's delivery.
The contest is so popular that someone has invented the Rimroller, a little device for rolling up the rim mechanically.
   Prizes are not distributed randomly country-wide; each of the company's distribution regions has its own odds for prize-winning.
   In March 2006, two families were fighting over the Toyota RAV4 SUV prize of C$32,000 value after their daughters found a winning "roll up the rim" coffee cup in a garbage bin of an elementary school in Saint-Jérôme, north of Montreal. The younger girl had found a cup in the garbage bin and couldn't roll up the rim, so requested the help of an older girl. Once the winning cup was revealed, the older girl's family stated that they deserved the prize. Tim Hortons originally stated that they wouldn't intervene in the dispute. A further complication arose when Quebec lawyer Claude Archambault requested a DNA test be done on the cup. He claimed that his unnamed client had thrown out the cup and was the rightful recipient of the prize. On April 19, 2006, Tim Hortons announced that they'd decided to award the prize to the parents of the girl who had initially discovered the cup.

Community

The store also promotes itself through community support and the "Tim Horton Children's Foundation." Founded by Ron Joyce, the Foundation sponsors many thousands of underprivileged children from Canada and the United States to go to one of six high-class summer camps located in Parry Sound, ON; Tatamagouche, NS; Kananaskis, AB; Quyon, QC; Campbellsville, KY; and St. George, ON.
The foundation's highest-profile fundraiser is Camp Day, which is held annually on the Wednesday of the first full week in June. All proceeds from coffee sales at most Tim Hortons locations, as well as proceeds from related activities held that day, are donated to the foundation. Small stores located in Esso Service Stations don't donate coffee proceeds on Camp Day.
Mr. Joyce's dedication and commitment to the Tim Horton Children's Foundation earned him the Gary Wright Humanitarian Award in 1991, presented periodically in recognition of the outstanding contributions to the betterment of community life throughout Canada. In recognition primarily for his work with the Foundation, he received an appointment to the Order of Canada, with the official presentation taking place on October 21 1992, in Ottawa.
Tim Hortons also sponsors the Timbits Minor Sports Program, a community program for local sports teams involving children aged four to eight years. The program places an emphasis on learning the sport and building friendships among the participants, as reflected in the program's advertising tagline--"The First Goal is Having Fun."

A Canadian cultural fixture

The ubiquity of Tim Hortons, through both effective marketing and the wide expansion of its outlets, makes it a prominent feature of Canadian life. Tim Hortons' prevalence in the coffee and doughnut market has led to its branding as a Canadian cultural icon, and the media routinely refer to its iconic status. A series of Tim's television commercials promotes this idea by showing vignettes of Canadians abroad and their homesickness for Tim Hortons.
   Noted Canadian author Pierre Berton once wrote: "In so many ways the story of Tim Hortons is the essential Canadian story. It is a story of success and tragedy, of big dreams and small towns, of old-fashioned values and tough-fisted business, of hard work and of hockey."
   Film director Kevin Smith name-drops Tim Hortons several times during a portion of his DVD which was taped at a college "Q&A" appearance in Toronto, Ontario. At one point, a fan comes up onto the stage while Smith is speaking, and brings him a few bags of Timbits.
   Some commentators have bemoaned the rise of Tim Hortons as a national symbol. Rudyard Griffiths, director of The Dominion Institute, wrote in the Toronto Star in July 2006 that the ascension of the chain to the status of cultural icon was a "worrying sign" for Canadian nationalism, adding: "Surely Canada can come up with a better moniker than the Timbit Nation."
   A Canadian term used at Tim Hortons outlets is "double-double," which indicates a coffee with two creams and two sugars. It was added to the second edition of the Canadian Oxford Dictionary on August 10, 2004."
   Store #603, the most northern store, in Yellowknife Northwest Territories, recently earned the honor of top sales in the chain for 2007-2008. According to co-owner Greg Barton, the store handles around 2900 Yellowknifers per day.
   Québec rock duo Tracteur Jack has released a song entitled "Tim Horton's", in honor of their favorite song-writing location.

Criticism

David Swick reported in the Halifax Daily News on September 19, 2003, that Tim Horton's donuts were to be remotely factory-fried and shipped, frozen, to Tim Horton's outlets in Atlantic Canada, where they'd then be reheated at the push of a button. This appears to be in contradiction to Tim Horton's famous 'Always Fresh' slogan.
   In September 2006, Tim Hortons courted controversy by mandating that employees were not to wear red as part of the Red Fridays campaign by families of the military to show support for Canadian troops. Within a few hours, Tim Hortons partially reversed its position and has allowed staff in Ontario stores to wear red ribbons or pins to show support for the wear red on Fridays campaign.
   Although litter isn't a problem caused by Tim Horton's, it appears to be a problem wherever a franchise is opened up. Disposable cups produced by the company are one of the most common litter items in Canada. Company spokespersons claim that irresponsible customers are the problem, not Tim Horton's. Yet their cups show up as litter in direct proportion to the number of Tim Horton's outlets nearby.
   "Tim Horton's doesn't sell organic coffee, doesn't sell Fair Trade coffee, and doesn't disclose the source of its green beans" as quoted from weblog Coffee and Conversation which references Tim Horton's own website. Tim Horton's response is that they've created a program called the Sustainable Coffee Partnership where they assist coffee producers to diversify their crops and emphasize "the need to respect and protect the environment."
   Company Management has come under scrutiny and bad press for the recent firing and rehiring of a woman who gave away a 16-cent Timbit.

Images

Image:OttawaStreetHamiltonA.JPG|Tim Hortons Way, Hamilton, Ontario Image:TimHortonsHamiltonA.JPG|Tim Horton's plaque, 1st store, Hamilton Image:OttawaNHamiltonJ.JPG|Tim Horton's sign, 1st store Image:OttawaNHamiltonK.JPG|Display case, Tim Horton's, 1st store Further Information

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