Horton’s new kid on the block

In Hamilton, Ontario in 1964, where Toronto Maple Leafs hockey player Tim Horton discovered a taste for entrepreneurship. He began a business that sold only coffee and doughnuts.

Horton retired his hockey career early in order to expand his idea. He knew the perfect recipe for combining business and advertising with Canada’s love for hockey.

Now, Tim Horton’s sells different types of coffee such as cappuccinos and lattes and various food choices such as soups and sandwiches, all for very reasonable prices. The expanded menu has lured many customers   to the store.

The Canadian coffeeshop is now transforming into a potential threat to other chains such as Dunkin Donuts and Krispy Kreme Doughnuts. In July 2009, Riese Organizations, a large restaurant management company, transformed thirteen Dunkin Donuts in New York City into Tim Horton’s. This was the first time the restaurant was introduced into Manhattan, but not to the U.S.

THI merged with Wendy’s International Inc. in 1995, in order to stimulate its expansion into the U.S. Stores can now be found in Michigan, Connecticut, Ohio, West Virginia, Kentucky, Pennsylvania, Rhode Island, Massachusetts and New York.

Its popularity is gradually increasing; when asked whether she knew about Tim Horton’s, freshman Carolyn responded, “It’s very popular, it’s on every exit.”

The coffeeshop is a staple in Canada much like the U.S counterpart Starbucks. There are a total of 3,015 stores in Canada in comparison to the 563 stores in America, however this does not take into account the many stores being built across the country.

 On Feb. 25, the board of directors of Tim Hortons Inc. (THI) from Canada approved a dividend of 30 to 35 percent of net earnings to be paid out to them on March 23.

 This is almost a ten percent increase of THI’s pay out rate from last year, explained by its rise in net income of $22 million, which could only be described as a result of the rapid popularity the chain has grown across our northern neighbor and the U.S.

The spread of Tim Horton’s can be seen through the increasing numbers of its investors and its stock. In North America, it is the fourth largest publicly traded restaurant chain. With the recent news of its shareholders decent payout, it is bringing in more interested buyers into the picture.

This means the small coffee chain will continue to grow and expand in the U.S. however, some members of the investment community were skeptical as to whether THI is in for the long haul.

They are discouraged by the amount of time it is taking to actually expand its chain and are concerned THI has worn out the Canadian market. So far, the future looks promising but as any investor knows, the market can change drastically.

In Canada, THI would fall right under Starbucks in customer loyalty and with its constant sponsorship of athletes that participated during the 2010 Winter Olympics, Canadians can find more reasons to feel at home in the restaurant. Investors may be skeptical of their future quotes, but it does not seem like they will go out of business anytime soon.