Tim Hortons franchises spread rapidly and eventually overtook McDonald's as Canada's largest food service operator. The company opened twice as many Canadian outlets as McDonald's and system-wide sales also surpassed those of McDonald's Canadian operations as of 2002. The chain accounted for 22.6% of all fast food industry revenues in Canada in 2005. Tim Hortons commands 76% of the Canadian market for baked goods (based on the number of customers served) and holds 62% of the Canadian coffee market (compared to Starbucks, in the number two position, at 7%).
As of September 27, 2009, Tim Hortons has 3,527 systemwide restaurants, including 2,971 in Canada and 556 in the United States.
Tim Hortons has an international presence including outlets in the United States, including one opened in Detroit and owned by former NBA player Derrick Coleman and one on a military base outside Kandahar, Afghanistan.Two more outlets are located in military bases at Fort Knox, Kentucky and Naval Station Norfolk, Virginia. Tim Hortons' other international expansions include a small outlet at the Dublin Zoo. Tim Hortons also made a deal with the SPAR convenience store chain in the UK and Ireland, resulting in Tim Hortons coffee and doughnuts being sold at small self service counters in 50 SPAR stores as of April 30, 2007.
History
Tim Horton and Ron Joyce
Tim Hortons logo as used in the mid-1990s, and still the chain's most common outdoor sign.
A common road sign bearing the logo above
A Tim Hortons in South Portland, Maine
A Tim Hortons in Calgary, Alberta
A Tim Hortons sign in Columbus, Ohio
A Tim Hortons cup in Lambertville, Michigan store.
The chain's first store opened in 1964 in Hamilton, Ontario under the name "Tim Horton Donuts" (the name later being abbreviated to "Tim Horton's", and later still changed to "Tim Hortons" without the possessive apostrophe). 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 had opened up two more stores, he and Tim Horton became full partners in the business. Upon Horton's death in 1974, Joyce bought out the Horton family's shares for $1 million 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 1991.
Ron Joyce's aggressive expansion of the Tim Hortons business resulted in one major change in the coffee and doughnut restaurant market: Canada's per-capita ratio of doughnut shops surpassed those of all other countries.
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, and continuing the expansion of the menu options as consumer tastes broadened.
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. The company had removed the apostrophe after signs using the apostrophe were considered to be breaking the language sign laws of the Province of Quebec. The removal of the apostrophe allowed the company to have one common sign image across Canada.
Merger with Wendy's
A Tim Hortons/Wendy's sign in Milton, Ontario
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, acquisition of and merger with TDL Group by Wendy's International, Inc., an American company. 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 Peltz, 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 Peltz 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.
Despite maintaining its operational headquarters in Oakville, the spun-off holding company was initially incorporated in Delaware, under the T.H.D. Donut (Delaware), Inc..
[edit]Repatriation
On June 29, 2009, Tim Hortons Inc. announced that, pending shareholder approval (expected in September), the chain's operations would be reorganized under a new publicly-traded company, also named "Tim Hortons Inc.", incorporated under the Canada Business Corporations Act. The change is being made primarily for tax purposes.
On September 28, 2009, Tim Hortons Inc. announced it had completed the reorganization of its corporate structure to become a Canadian public company.
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 the US states of Connecticut, Indiana, Kentucky, Maine, Massachusetts, Michigan, New York, Ohio, Pennsylvania, Rhode Island, and West Virginia. In 2008, Tim Hortons INC. recorded its total revenues at $2.04 billion (CDN).
Initially, the US stores were the result of natural expansion into Canadian border areas (i.e. stores in Maine and the Buffalo, New York area where Horton played from 1972 to 1974 as a member of the Buffalo Sabres). Starting in the mid-1990s, however, the chain began expanding in the US by acquiring former locations from fast food chains. Between 1996 and 1997, thirty-seven former Rax Restaurants locations in Ohio, Kentucky, and West Virginia were bought by Wendy's International Inc.. 30 of these were to be converted to Tim Hortons, while the other 7 were to become Wendy's franchise locations. Thirty-five former Hardee's stores in the Detroit, Michigan area were also purchased with the intentions of being converted. 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.
Tim Hortons was originally concentrated in Ontario and Atlantic Canada. In recent years, however, the chain has greatly expanded its presence in Quebec and western Canada.
Tim Hortons' products have become available in Ireland and Scotland at some SPAR convenience stores and Tesco supermarkets. The first expansion into Indiana was announced with the planned opening of a location in Richmond, Indiana's southwest side.
In October 2008, Tim Hortons announced a plan to add 82 locations in Tops Markets stores.
On July 13, 2009, Tim Hortons opened stores in New York City at former Dunkin Donuts locations operated by the Riese Organization. One of the stores is located at Madison Square Garden, where Horton played as a member of the New York Rangers from 1969 to 1971.
Tim Hortons continued its southward expansion by opening a restaurant at Naval Station Norfolk, Norfolk, Virginia; in mid-December 2009.
In March 2010, Tim Hortons announced a further expansion on both sides of the US/Canadian border to be completed by 2013.] The plan calls for:
600 new stores in Canada (primarily in Quebec and Western Canada but also including smaller communities) and 300 new stores in the U.S. (primarily in its existing markets of Michigan, New York, and Ohio).
Expanding into such non-standard store locations as hospitals, universities, and airports.
Extend its co-branding initiative with U.S. ice cream chain Cold Stone Creamery, which began in 2009, to cover 60 Canadian stores and 25-35 new and existing U.S. stores.
Test a new cafe/bake shop concept in at least 10 existing U.S. locations, including "enhanced finishes, fixtures and seating areas" as well as an expansion of menu offerings.
Partnership with Tim Hortons
The parent company of Cold Stone Creamery, Kahala Group, announced in February 2009 that it had reached an agreement with Tim Hortons to open up to 100 co-branded stores in the United States after successfully testing two locations in Rhode Island. The most notable co-branded store opened in August 2009 when Tim Hortons moved into three Coldstone Creamery locations in New York City, including its flagship Times Square location.
In June 2009, Cold Stone Creamery started testing the Canadian market by opening its six co-branded locations with Tim Hortons located in Toronto, Oakville, Mississauga, Hamilton and Pickering.[39] As of December 2009, Cold Stone Creamery has been expanding its test markets in Canada. There are now four locations in Calgary, Alberta, three stores in Nova Scotia, five stores in Ontario, and one in New Brunswick.
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 (12 m) 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
Tim Hortons milestones
Store # Location Date Note
1 Hamilton, Ontario May 1964
100 Thunder Bay, Ontario December 1978
200 Hamilton, Ontario December 1984
300 Calgary, Alberta February 1987
400 Halifax, Nova Scotia February 1989
500 Aylmer, Quebec January 1991
700 Moncton, New Brunswick October 1993
1000 Ancaster, Ontario August 1995
1500 Pickerington, Ohio March 1997 also Wendy's 5000th store
100 in US Columbus, Ohio July 31, 1998
2000 Toronto, Ontario December 2000
2500 Cayuga, Ontario September 2003
3000 Orchard Park, New York December 14, 2006
500 in US Detroit, Michigan 2008
Menu
A drive thru only Tim Hortons location in Moncton, New Brunswick
Tim Hortons' first stores only offered two products – coffee and doughnuts.Aside from its coffee, tea, hot chocolate, and doughnuts, the Tim Hortons menu now contains a number of other baked goods, such as Timbits (miniature balls of doughnut dough), muffins, croissants, tea biscuits, cookies, rolls, danishes, and more recently bagels – of which Tim Hortons sells one out of every two in the Canadian foodservice industry. Take-home cakes are offered in some locations.
Since the mid-1990s, the chain has moved into other areas, including speciality and premium items such as flavoured cappuccino, iced cappuccino, iced coffee, 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. The sandwich consists of an egg patty, processed cheese slice, either bacon or sausage as the topper, and is placed on either a biscuit or bagel to wrap it up. In October 2007, Tim Hortons launched the Chicken Fajita Wrap, which contains spiced chicken and sautéed vegetables, but was soon discontinued, replaced a year later with the Barbecue and Ranch Chicken Wrap Snackers. As of late December 2007, they introduced the new Hash Browns and the Bagel B.E.L.T., a breakfast sandwich that also includes 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 fully cooked and then frozen and delivered to every restaurant in Canada from Brantford, Ontario. Each restaurant bakes and finishes the product throughout the day. As of April 2007, many of the various muffin batters are being revoked, as frozen, pre-made and pre-wrapped muffins are being introduced to all bakers at Tim Horton locations.
Originally featuring Pepsi products via fountain machines, Tim Hortons made the change in the mid-1990s to Coca-Cola products in bottle-only form. Tim Hortons switched back to Pepsi in 2007, but continued to market only bottled and canned Pepsi products.
On February 10, 2009, Tim Hortons announced they will be co-branding with another popular American ice cream parlor Cold Stone Creamery. The deal calls for each chain to convert 50 stores into dual-operation franchises, for a total of 100 stores. The idea was successfully tested at two stores in Rhode Island.
Despite this expansion in their offerings, Tim Hortons is still heavily dependent on coffee sales. In 2009 it was reported that 60 percent of their sales occur in the morning, and of that more than 50% is coffee.The coffee served is a blend of 100% Arabica beans and in regards to the serving of coffee the chain has an "always fresh" policy where coffee is served within 20 minutes of brewing or not at all.
Nutritional information on most Tim Hortons menu items is made available by the company in a two-page brochure and is available online.
Marketing
Advertising and promotion
A Tim Hortons shop in Ottawa, Ontario
Tim Hortons advertising on the field at BC Place during the 2005 Grey Cup game
Tim Hortons has one of the most successful marketing operations in Canada, approaching the level of a symbol of national identity. 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).
Since 2005, Tim Hortons has been the title sponsor of the Brier, the annual Canadian men's curling championships, along with the Canadian Ringette Championships. Shortly before December 2007, they discontinued their gift certificates, and replaced them with the Quickpay Tim Card, with the Christmas slogan "Because it's hard to wrap a double double" (coffee with two sugars and two cream). Many locations still accept gift certificates, however.
Tim Hortons' advertising slogans have included "You've Always Got Time for Tim Hortons" and, more recently, "Always Fresh. Always Tim Hortons".
In June 2009 Tim Hortons USA created a Twitter and Facebook page to drive online traffic.
Roll Up the Rim to Win
A winning Roll Up the Rim to Win Cup
A losing cup.
Each March, Tim Hortons holds a very large marketing campaign called Roll Up The Rim to Win. Over thirty one million prizes are distributed each year,including vehicles, televisions, and store products. Customers determine if they have won prizes by unrolling the rim on their paper cup when they have finished their drink, revealing their luck underneath.
The Roll Up the Rim campaign was first held in 1986 and has grown to become a highly anticipated event for Tim Hortons customers. In 2008, over 88% of major prizes were redeemed.
The contest is so popular that someone has invented the Rimroller (as seen on Dragon's Den), a device for rolling up the rim mechanically.
Prizes are not distributed randomly country-wide; each of the company's distribution regions has distinct prize-winning odds.
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 could not 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 would not 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 had 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 do not donate coffee proceeds on Camp Day.
A Timbits hockey player, from Niagara Falls
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 many other community outreach programs including Free Skating, Free Swimming, Earn-a-Bike Program, Remembrance Day, Food Drives, the Smile Cookie program, as well as a community clean-up project.
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, although this is a relatively recent development, tied to the chain's tremendous expansion in the late 1990s and 2000s. A series of Tim's television commercials promotes this idea by showing vignettes of Canadians abroad and their homesickness for Tim Hortons.
A smaller Tim Hortons location, with a focus on drive-through
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."
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."
Controversies
After Tim Hortons had agreed to provide 250 cups of free coffee for a "Marriage and Family Day" hosted by the National Organization for Marriage, the company removed its sponsorship after it was revealed that the NOM was an organization that campaigns against gay marriage. The company stated the sponsorship was a violation of the company's policy not to sponsor events "representing religious groups, political affiliates or lobby groups." The event's organizer, Christopher Plante, said the deal was approved by state-wide or regional (representative), not a local franchise.
Criticism
David Swick reported in the Halifax Daily News on September 19, 2003, that Tim Hortons donuts were to be remotely factory-fried and shipped, frozen, to Tim Hortons outlets in Atlantic Canada, where they would then be reheated at the push of a button.
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.
Fast food packaging litter, though not limited to solely to Tim Hortons, 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 Hortons. Yet their cups show up as litter in direct proportion to the number of Tim Hortons outlets nearby.
"Tim Hortons does not sell organic coffee, does not sell Fair trade coffee, and does not disclose the source of its green beans" as quoted from weblog Coffee and Conversation. As of 2007, Tim Hortons website said that they decided against using Fair Trade coffee. Instead they created a program called the Sustainable Coffee Program; the first program was launched in Guatemala and in 2006 they started programs in Colombia and Brazil where they are "directly involved with coffee producing communities by providing direct financial assistance for technical training to improve the quantity and quality of coffee produced and assist farmers in getting their coffee to market at the best time and for the best price. Assistance is also provided on environmental management, in both proper farming techniques and reforestation projects, led by Tim Hortons." In addition, Tim Hortons supported schools and sponsored medical clinics in Guatemala. The annual report mentions this program but does not specify whether the beans they purchase are sourced from this program. The report only mentions "multiple suppliers of coffee"
Source:wikipedia
No comments:
Post a Comment