Timanjim Ltd.: 1963–64
In the spring of 1963, Toronto Maple Leafs defenceman Tim Horton met businessman Jim Charade. Charade had left his job as manager of a Scarborough, Ontario, doughnut plant to open a store called Your Do-nut in a strip mall at Lawrence and Warden avenues. The store was two doors from the barber shop where Horton got his signature brush cut. Horton had a long-standing interest in getting into the restaurant business. Professional hockey players then worked about eight months a year (if they made the playoffs), and pay was such that they usually pursued an off-ice career, with retirement from the game in mind.
In 1963, Charade and Horton formed the company Timanjim Ltd. They opened four restaurants, called Tim Horton Drive-In, in greater Toronto and Port Credit, serving burgers and chicken. In a separate deal, Charade licensed Horton’s name to turn Your Do-nut (which briefly was Royal Do-nut) into Tim Horton Do-Nut, the first doughnut store to bear Tim Horton’s name.
The burger and chicken drive-ins struggled, and Charade decided the future was in doughnuts and restaurant franchising. Rather than own the restaurants himself, he would sell franchise rights to owner-operators, who would buy their equipment and supplies from the franchising company, follow its menu and operating standards, and pay the company a share of their revenues. Intimidated by competition in Toronto, Charade set up the first Tim Horton doughnut franchise on Ottawa Street North in the industrial east end of Hamilton, Ontario. Opened in April 1964, the outlet remains in operation today, and is recognized by Tim Hortons as its first official franchise restaurant. At the time, Tim Horton was still only licensing his name and had no equity in the operation.
Early Franchising: 1964–66
The franchisee of the first Tim Hortons was Spencer Brown, a 21-year-old bank clerk from Toronto. Although the restaurant was an immediate hit with shift workers at nearby steel plants — as much for the caffeine the coffee provided as for its doughnuts — Brown and Charade quickly fell out. Brown left and went on to be a successful hotel operator. Charade found another franchisee, but he, too, was short-lived. Meanwhile, a desperate Charade was moving money from Timanjim Ltd, to his struggling doughnut company without Horton’s knowledge. To resolve the problem, on 27 January 1965 Horton became an equal partner in Charade’s doughnut business, which was incorporated as Tim Donut Ltd.
The third franchisee at the troubled Hamilton franchise was a Hamilton police officer named Ron Joyce, who lived nearby. Joyce had been running a Dairy Queen on the side and was looking to expand his restaurant interests. When Dairy Queen wouldn’t approve his plan to open another outlet in nearby Bronte, he gambled on becoming the next franchisee for the doughnut shop, in February 1965.
More turbulence followed. Joyce and Charade sparred, and for a time, Joyce left the business completely. Joyce would recall driving to Peterborough, Ontario, to meet Horton while the Maple Leafs were at training camp for the 1966–67 season. Horton wanted him back, but Joyce would only agree to return if he was made an equal partner of Horton in the franchising company. Charade had departed, and his former half of Tim Donut was now owned by Horton’s wife, Lori. Horton agreed to Joyce’s condition, and Joyce bought Lori’s half for $12,000 to become Tim’s new partner in Tim Donut in December 1966. Charade (who died in 2009) moved on to work with other franchising operations, but he and Horton remained friends, despite the controversies. In 1970, he returned to work on franchising for Horton and Joyce for about nine months, and again in the mid-1990s for Joyce.
Balancing Hockey and Business: 1967–74
Horton and Joyce slowly expanded the franchise chain, and by 1967 had three outlets in Hamilton and one in Waterloo. Joyce had left policing to devote himself to their restaurant business. Although Horton was still playing professional hockey, he was far more than a name on the restaurant sign. Horton was particularly involved in the real estate side, scouting and choosing locations, but he was interested in all aspects of the restaurant business, and even helped to build at least one of the early outlets in Hamilton, in Westdale.
While many NHL players struggled to establish a life outside of hockey, Horton was in the rare position of having a growing business waiting for him. Ironically, Horton could not bring himself to leave a game that teammates were forced to abandon because of declining skills and injury. As Horton aged, he could still play at a high level as a “stay at home” rather than a rushing defenceman and could also serve as a mentor to younger players. His experience was especially valued as the NHL began expanding and a rival league appeared, the World Hockey Association. Player salaries rapidly grew as a result. Horton, who had been paid a $12,000 salary as a Maple Leaf in 1960–61, was soon making over 12 times that amount as his career took him to the Pittsburgh Penguins, the New York Rangers, and finally the Buffalo Sabres — a 1970 NHL expansion team managed by his old manager/coach in Toronto, Punch Imlach. Every summer, Horton would routinely announce that he was not returning to play, but he could never say no to the money when the fledgling restaurant business needed cash. He arranged for his NHL salary to be paid to the company, with half the money going to Joyce as salary so that his partner would run the business while he continued to play.
Tim Horton Dies: 21 February 1974
For the 1973–74 season, Imlach lured Horton back to the Buffalo Sabres with a $150,000 salary and a sportscar, a De Tomaso Pantera, as a signing bonus. Horton was driving himself back to Buffalo after a game against the Maple Leafs when he lost control of the car in a high-speed, single-vehicle crash in St. Catharines in the early hours of 21 February 1974. An autopsy revealed he had been drinking. Horton had struggled with alcohol in the past, and had sought counselling. Teammates in Buffalo recalled that the binges for which he was once notorious were behind him. His father had died a few weeks before the crash, and the loss may have affected him more than people knew. Horton had just turned 44.
Horton’s death threatened the future of his namesake restaurant chain. There were 35 outlets open when he died, and plans were under way to expand out of southern Ontario and into the Maritimes. At the time, doughnut shops were considered a fringe part of the restaurant franchise landscape, which was dominated by hamburgers, chicken and ice cream. But the chain had already begun to change the tastes of Canadian consumers by popularizing coffee, which became more of a signature product for Tim Hortons than baked goods.
Shifting Ownership: 1975–95
A share trust agreement triggered by Horton’s death meant that Joyce became the majority owner, with 50.5 per cent of the shares. The other 49.5 per cent were held by Horton’s widow, Lori, with whom he had four daughters. The new partnership was unworkable. Lori had never been involved in the day-to-day business, and when Tim died she had been struggling with an addiction to an amphetamine prescribed for weight loss, as well as with alcohol. In 1975, Joyce proposed to buy her out. An evaluation placed the worth of Lori’s share at $850,000. Joyce offered her $1 million and the company car, a Cadillac. Lori accepted and Joyce became the sole owner of the company.
In 1987, a clean and sober Lori Horton sued both Joyce and the lawyer who had represented her in the 1975 sale, claiming she had been mentally incompetent at the time. She wanted her half of the company back or $10 million. The suit failed in 1993, as did an appeal. The chain by then was approaching 1,000 restaurants. Lori launched another suit in 1995, claiming a poster in restaurants titled “The Legend,” bearing Tim Horton’s likeness (painted by the Canadian artist Ken Danby), infringed on copyright she held on a photograph. The posters were used to promote the non-profit Tim Horton camps for underprivileged children. The first camp, near Parry Sound, Ontario, had been opened after Horton’s death. Lori felt that first camp was the tribute to her husband; the additional ones, she alleged, served to promote the restaurant chain. That suit also failed in 1997. But before the poster-photo suit had run its course, the company and its franchisees removed the posters from the restaurants.
At this point, many Tim Hortons customers had not grown up watching the restaurant’s namesake play, meaning his face was less and less recognizable. The chain’s signage had also had been changed from Tim Horton’s (as the chain had come to be known) to the pluralized Tim Hortons. The change was made in order to be standard across the chain while satisfying requirements of Québec’s language law, Bill 101 (1977), for commercial signage. “Tim Hortons” for many customers had about as much connection to a human being as “McDonald’s” or “Harvey’s.”
Wendy’s Merger: 1995–2006
In 1995, Ron Joyce sold the company in a merger with the American fast-food chain Wendy’s. Head office remained in Oakville, Ontario, but the company was registered in Delaware. The Wendy’s ownership allowed Tim Hortons to more aggressively pursue expansion opportunities in the northeastern United States as it continued to grow in Canada. Joyce remained with the company until his retirement in 2001.
After the 2000–01 recession, in which several of its domestic coffee-and-doughnut competitors failed or faltered, Tim Hortons became the largest fast-food chain in Canada. It had expanded into lunch meals, and surpassed McDonald’s in sales in Canada in 2002. The restaurant was too successful even for Wendy’s shareholders, who felt the true value of the chain was being suppressed within a company whose hamburger outlets were struggling. They felt that as a separate public company, Tim Hortons shares would be worth a whole lot more. Bowing to shareholder pressure, Wendy’s divested its Tim Hortons ownership in 2006 by distributing shares to existing Wendy’s shareholders and offering further shares to the public on the New York and Toronto exchanges. (It took until 2009 to completely untangle Tim Hortons legally from Wendy’s.) In the process, the company was repatriated to Canada.
Canada’s then prime minister, Stephen Harper, held a press conference at the Oakville headquarters on 23 September 2009, to celebrate the franchise chain’s return, which he attributed to his government’s reduction in corporate tax rates. Critics charged that the prime minister skipped a meeting at the United Nations to make the appearance, and that his absence may have factored in Canada’s failure to secure a seat on the Security Council.
Expansion Challenges: 2009–14
In 2009, Tim Hortons surpassed 3,000 outlets in Canada (with 600 in the United States); in 2010, its outlets served about 8 of 10 cups of coffee sold by Canadian restaurants. The company was running out of domestic expansion opportunities.Its annual Roll Up the Rim contest also was becoming increasingly expensive as it contended with increased competition from McDonald’s, which made a formidable commitment to the coffee market with its McCafé concept. Tim Hortons also had to weather a consumer scandal when it abandoned scratch baking at outlets in favour of centralized “par-baking” that involved delivering frozen, partly-baked goods to outlets for finishing in custom convection microwave ovens. A suit by a Canadian franchisee over the purported negative impact of the par-baking switch was dismissed in 2012. A partnership with Cold Stone Creamery, to place ice cream in outlets, was a failure, and ice cream service was pulled from Canadian stores in 2014. The United States continued to be the chain’s greatest hope for growth, but American consumers lacked the patriotic attachment the brand enjoyed in Canada and had their own loyalties to American brands like Dunkin’ Donuts. A New England expansion, which included the purchase of a regional chain, Bess Eaton, in 2004, was a notable setback, as Tim Hortons was forced to close 49 outlets as well as 18 service-station kiosks by 2010.
3G Capital Purchase: 2014
For all its challenges, Tim Hortons remained a premium franchise restaurant chain, regularly heralded as one of Canada’s most respected brands. That attracted the attention of a Brazilian private equity firm, 3G Capital, which owned Burger King. In October 2014, Canada’s federal competition bureau approved 3G Capital’s takeover. The ownership change resulted in job losses: an initial 350 employees, or about 15 per cent of the company’s workforce, were cut. But 3G also brought an enhanced commitment to diversifying the menu while renewing the push for American expansion. The sale of a national consumer icon to a Brazilian firm seemed to have no effect on Canadian enthusiasm for the brand as a touchstone of national identity.
In the 1990s, the idea that typical Canadians frequented coffee-and-doughnut shops began to take hold in the popular imagination. The Canadian satirical television program Royal Canadian Air Farce contributed to the popularization of this notion through its regular “A Canadian Moment” sketch. The sketch debuted on 3 December 1993 and featured “the doughnut gang.” A cast of slightly dim but perceptive ordinary Canadians would gather at a restaurant table to debate current affairs, with Don Ferguson’s character delivering a signature “Ya got that right.” The skit ran until the final episode of the show, on New Year’s Eve, 2008. It never took place explicitly in a Tim Hortons, but as the chain grew and competitors failed, the doughnut gang and the Tim Hortons customer began to fuse in the national conscience.
When Prime Minister Stephen Harper appeared at the Tim Hortons head office in 2009 to celebrate its repatriation as a Canadian corporation, he extolled the company as emblematic of Canadian life, a part of family routines of 6 a.m. hockey practices, thus fuelling a growing association between national identity and the restaurant brand. Harper himself was called the “Tim Hortons Prime Minister” by Maclean’s magazine in 2006. By the 2011 federal election, the idea of the “Tim Hortons voter” had entered the political lexicon. Tim Hortons supposedly was where typical Canadians of middle-spectrum political values gathered. No candidate’s election campaign seemed complete without obligatory visits to outlets — even though polling showed that politically, the average Canadian Tim Hortons customer wasn’t any different than a Starbucks one. Tim Hortons became so synonymous with Canadian life that an outlet was established in Kandahar in 2006 for Canadian troops as a reminder of home during their NATO deployment in Afghanistan (see War in Afghanistan).
Elsewhere in the cultural landscape, Tim Hortons was the obvious inspiration for Stan Mikita’s Donuts (named for a Horton opponent on the Chicago Blackhawks) in Wayne’s World, the 1992 film by Scarborough native Mike Myers (see Stan Mikita).
Tim Hortons is regularly criticized for a range of issues affecting the fast-food industry as a whole. Like most other chains, Tim Hortons coffee cups are not recyclable. The trash produced by the cups is regularly condemned, and the company has responded with recycling efforts. In the United States, the Humane Society of America targeted Tim Hortons in a 2012 campaign to have the company source its pork products from pigs not raised in confining gestation crates (see Pig Farming). The campaign spread to Canada and in 2013 the company pledged to eliminate the use of such stalls in its supply chain by 2022.
When controversies began to arise over Canada’s temporary foreign worker programs in 2009, some Tim Hortons franchisees found themselves having to defend their use and treatment of foreign labour. A franchise on Opaskwayak Cree Nation, near The Pas, Manitoba, was especially controversial, as it brought in workers from the Philippines when unemployment on the First Nation was “skyrocket high,” according to its chief.
In January 2018, the company drew negative press over reports that some its franchisees were cutting employee benefits in reaction to a minimum wage increase in Ontario. After the minimum hourly wage was increased from $11.60 to $14.00, some Ontario locations removed some employee benefits, as well as paid breaks and tips. One such franchise that sparked particular controversy was co-owned by the daughter of Tim Horton and the son of Ron Joyce, Horton’s business partner. Numerous demonstrations were organized across the province and country.
In addition, health care professionals have included Tim Hortons in their condemnation of national eating habits because of the high calories of Iced Capp beverages and baked goods. The informal practice of parents and organizations rewarding children who participate in sports with treats like Timbits has been condemned as counter-productive, as they can consume more calories in treats than they burn in the rewarded activity.
Like most corporations, Tim Hortons engages in a wide range of charitable activities, including the Tim Horton Children’s Foundation and the Timbits Minor Sports Program. The foundation was created by Lori Horton and Ron Joyce in Tim Horton’s memory in June 1974. Its goal was to provide children from low-income families with a camp experience. The first camp was established on Lorimer Lake, near Parry Sound, Ontario. Today, the Parry Sound location is a first-class facility, the flagship of a network of seven camps in North America. The charity is supported by Tim Hortons, its franchisees, suppliers to the restaurant chain, and the general public. Its best known fundraiser is Camp Day, held the first Wednesday in June, when all proceeds from coffee sales at participating restaurants are donated to the foundation. Campers (who attend for free) are nominated by franchise operators based on recommendations from local schools and community organizations, and applications are reviewed by a foundation committee to ensure they meet eligibility requirements of low family income.
Tim Hortons is also widely recognized for its presence in minor sports, sponsoring children’s hockey, ringette, lacrosse, soccer, softball and baseball leagues.In hockey in particular, the Timbits Minor Sports Program often receives attention from the success of its former players. Among its many alumni are NHL stars Sidney Crosby and Nathan MacKinnon.