Learn how this brand carved out a niche by appealing to the Canadian identity
Tim Hortons is a Canadian restaurant chain named after and founded by Canadian professional ice hockey player, Tim Gilbert Horton. The restaurant was founded in Hamilton, Ontario, in 1964.
The first restaurant set up was actually a donut and coffee shop. Its original name was Tim Hortons Donuts, which was then later changed to Tim Hortons. The business soon grew into a popular franchise and expanded rapidly across Canada. The franchise’s greatest success was after Horton’s death in 1974, it had 40 locations, and by the early 20th century it had 3,500 restaurants in Canada and the United States.
The brand appeals to a broad range of people, with its menu items, like its premium coffee – served either hot or cold, specialty drinks and teas, smoothies, fresh baked goods, Paninis, grilled sandwiches, soups, and other foods. Today Tim Horton’s has more than 4,700 franchised restaurants in Canada, the United States, and around the world.
Tim Horton’s Business Model and the Tim Horton’s Franchise
Tim Horton’s has a unique business model that’s helped the brand create a 50-year-long history of success. This business is applied to the United States market. This is because many other franchise brands in the US share a similar framework, like Dunkin’ Donuts, Starbucks, and even McDonald’s.
Meanwhile, the franchise business model has been wildly successful for Tim Horton’s as a brand. Almost 99% of its restaurants are franchises with only a small percentage of them being company-owned restaurants. Which are primarily used for training purposes.
The company had also previously partnered with Cold Stone Ice Cream to sell ice creams from their chains as well.
Tim Horton’s In India
The Canadian restaurant franchise is on track to open 120 stores over 36 months in India as of 2022. Navin Gurnaney, the CEO of Tim Hortons India, said the brand is focused on expansion in North India and that they plan to enter markets like Mumbai, Pune, and Surat. They opened their first two stores in August 2022, and currently, the franchise operates 6 stores in the country.
In total, the company plans to open 250 restaurants over the next five years. The first year focused on setting up good foundations in the Indian market. This was made possible by the franchise entering into a master franchise agreement with AG Cafe, Apparel Group, and Gateway Partners to open its stores across India.
On average, a Tim Hortons franchise costs about ₹2 Crore to ₹2.5 Crore to build. The chain sells coffee and baked goods, with beverages accounting for 60% of its sales.
Tim Horton’s Franchise Models
Standard Shop
A typical Tim Hortons restaurant. It provides all the same services as a full-scale Tim Hortons restaurant complete with a dining area in its restaurants for its customers and a drive-thru facility. This can be a stand-alone building, an in-line store, or a store within another facility.
Non-Standard/Kiosk
These are a little more versatile and can be installed in almost any location. Non-standard models come in two types: a built-in kiosk and a full-service cart. The built-in kiosk is more for a full menu line which includes coffee, sandwiches, and baked goods and its size varies depending on the location. The full-service cart is fully customizable and can be modified to suit the location, size, and customer demands in that location.
Tim Horton’s Franchise Agreement
A Tim Horton’s franchise agreement form includes an FDD document and is only applicable for a single unit of the franchise. Any subsequent units franchised after would need their own franchise agreements and FDD documents.
Tim Horton’s Franchise Disclosure Document
A Tim Horton’s franchise disclosure document lasts an average of 20 years for a standard location and non-standard models can have terms that average around 5 – 10 years, based on their locations. Renewal or extensions of these terms are not applicable for either model.
The Tim Horton’s Marketing Strategy – Selling a Feeling
Tim Horton’s is associated with all things Canada and their marketing strategy focuses on selling us the “Canadian Identity”. They use an appeal to emotion and identity in their commercials to connect with their customers and market their products.
Their commercials don’t directly try to sell you anything. Their products, or more specifically their coffee is featured as a subtle piece in the background. For example, their in the most famous commercial – Proud Fathers. The coffee isn’t made to be the obvious focal point of the commercial. The feeling of belonging, familial bonds, tradition, and of course a newfound Canadian identity are their main themes.
In other words, their commercials are a great example of this strategy being used in real-time, so make sure to check them out.
Conclusion
Tim Horton’s is Canada’s largest quick-service chain, also now present in India. They’re a brand that’s truly Canadian and a good example of a brand that focuses on, “Selling a Feeling”. Through their heartwarming ads on the Canadian identity and perseverance.
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