Former policeman Ron Joyce was scrambling to build a national doughnut and coffee chain called Tim Hortons, and trouble was brewing in the little market of Prince Edward Island. The local franchisee, who had opened the island’s first two outlets, was feeling family pressure to move back to Ontario, leaving a hole in Mr. Joyce’s doughnut growth ambitions.
The PEI franchisee had a candidate in mind to replace him. But Mr. Joyce wasn’t convinced Danny Murphy, a kid fresh out of university who at 24 was already itching to run his own show, was ready for the big leap from baker to businessman.
“I was reluctant to sell to him because of his age,” Mr. Joyce says. But in 1980, he finally took a chance on the brash young man, who drew on family support and came up with the $255,000 price.
Thirty-two years later, Mr. Murphy is now a charter member of the Tim Hortons millionaires, the elite franchisees who have ridden the double-double wave through the past three decades to become huge success stories in their local communities. “It’s been a great ride,” the 56-year-old says.
A great ride, indeed, that has spawned a family network of 70 fast-food outlets across the country – 50 under the Tim Hortons banner – as well as a cluster of hotel, resort and restaurant businesses on Prince Edward Island that make the Murphy name the dominant factor in the island’s hospitality industry.
It all spun out of the Tim Hortons phenomenon, where today owning one outlet provides a very good living, but four strong stores can net $1-million a year in profits for a hard-working owner, industry estimates suggest. In the Tim Hortons universe, it is common to own multiple outlets, although no one can touch Moncton’s Gary O’Neill, Mr. Joyce’s first franchisee in Atlantic Canada in 1974 and now the biggest Tims franchise operator with 34 restaurants.
Mr. Murphy is in that league, having gone from two smoky doughnut shops in Charlotteown to owning all 20 Tim Hortons restaurants in PEI, as well as 10 Wendy’s stores in PEI and Montreal. More than that, he has drawn his large, striving family into the Tim Hortons camp: Danny and three brothers (he has six brothers and one sister) own a total of 50 Tims outlets, from Charlottetown to Saint John to suburban Ottawa. The Murphy tentacles even stretch west to Fort McMurray where Danny’s wife Martie owns the two busiest Tim Hortons in the country.
In the fast-food industry, “Tims is Canada’s great growth story,” restaurant consultant Doug Fisher says. But the Murphys are distinctive in how they have leveraged that story into something much, much bigger. They played central roles in the astounding rise of Tim Hortons Inc. as a Canadian fast-food icon, helping to take it from 130 stores when Danny Murphy signed on to more than 4,000 today.
But Tim Hortons also played a crucial role in creating the legend of the Murphys. The outlets generated valuable early cash flow that sowed the seed of the Murphys’ food and hospitality cluster, now the biggest collection of enterprises on the island, rivalled only by the New Brunswick Irvings who have potato processing and growing operations in PEI. The Murphys – all impossibly good looking with charm to burn – are the local power family, PEI’s version of the Boston Kennedys, and are often referred to by first names alone: “Danny” or “Kevin” (a younger brother and a restaurant-hotel entrepreneur on his own) or “Shawn” (older brother, lawyer and former Liberal member of Parliament).
The Murphy story has outgrown its Tim Hortons roots to become a rare entrepreneurial saga in which everything the family touches seems to turn into a business venture, and everyone who joins the family circle seems to share an appetite for commerce.
Now the Murphys are poised to become more of a national story as Danny assembles a string of hotels throughout Atlantic Canada, while Kevin, the full-service restaurateur in the family, adds more pieces to his domination of the Charlottetown dining and drinking scene, which is a summer magnet for tourists and for travellers rolling off visiting cruise ships. And Kevin is hatching plans to take his microbrewery brand, Gahan Beer, across the country.
The Tim Hortons side of the story is not all roses – an Ontario franchise group sued the company over its conversion to more centralized baking, and U.S. expansion has failed to meet expectations. Still, Douglas Hunter, author of the book Double Double: How Tim Hortons Became a Canadian Way of Life, One Cup at a Time, points out that head office maintains a database of 3,000 aspiring store owners. Running a Tim Hortons is a lot of work, he says, but it is regarded, along with McDonald’s Restaurants, as “the elite of the franchise experience in Canada.”