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The October 2010 issue of Report on Business magazine.
The October 2010 issue of Report on Business magazine.

How Tim Hortons will take over the world Add to ...

Trimarchi told the Hortons franchising department that he had some primo locations up for grabs, including Madison Square Garden, a spot across from Macy's on 34th, and no less than five counters at Penn Station, which sees 500,000 commuters a day. "I got a call back from David Clanachan," Trimarchi says. "That made me feel real good, that I had the boss of this $5-billion company on the phone."

Over the course of eight months, Trimarchi and his team at Riese studied Hortons' business plan and demographic data. A major selling point was a menu that covers off every "daypart" (resto-speak for time of day), unlike Dunkin', which does huge business in the morning and at lunchtime but tapers off during the rest of the day. But what sealed the deal for Trimarchi was a vacation-time visit to a service centre with a Tim's near Montreal. "The place had a line around the corner," Trimarchi says incredulously. "They weren't stopping for the gas-they were stopping for the coffee."

But if the competition in small-town Ohio is stiff, in New York City it is mind-boggling. This is a coffee town. Every block is packed with java shops, from chains like Starbucks to thousands of independents, plus carts selling steaming cups of the stuff (not to mention moist, sugary doughnuts) on almost every corner.

Riese's head of marketing, Joe De Nardo, believes Tim Hortons stands out, not just because of its coffee, but because of, well, its quaintness. "It's full-service-they actually put cream and sugar in your coffee," he says with a touch of awe. "You don't get that in New York City any more. Everything's grab and go. It's refreshing."

Every morning, the Queens native takes the train from Long Island to Penn Station, where Jimmy, a 50-something Tim Hortons employee, has his iced coffee (two Splendas) ready and waiting. On many mornings, De Nardo will wade into the commuting throng, approaching a Starbucks-sipper and saying: "Gimme your cup and lemme buy you a cup of Tim Hortons." The thinking at Riese is that customers only need to try Tim's coffee once to be hooked for life. "We need to be evangelists," says De Nardo.

Jimmy has his own schtick. As De Nardo wanders away, he begins to yell: "Come to Teem Hooorrrrtons. Coffee! Doughnuts! Bagels!" Whatever works.

De Nardo leads a tour of Riese's four other Tim Hortons counters at Penn Station, proudly pointing out the New York-only promotions-the only instance of non-standard advertising allowed in the chain. "It's the New York mentality. We like to be a little on the edge." Whenever he can, he steers clear of earnest in favour of funny. "Hell," he says, "it's doughnuts and coffee." Hence Tea and Timbits (T&T-it's dynamite!) and $5 dozens after 5. "And for New Yorkers, $5 is basically free."

Sometimes, Clanachan needs to rein him in-De Nardo is the first to admit it. And it shows how much Tim Hortons cares. "The amount of interest they have in their brand is second to none," says De Nardo. "The corporate culture is intense. It's a cult. A lot of time, you see franchises that are very anemic-you don't get support from the mothership. But they're an awesome partner. They're a family-that's how they think of themselves."

Cult, family, which is it? Another metaphor is probably more apt: an empire. In the end, the Manhattan project may be just a low-risk flyer for Tim Hortons that has to be abandoned. But rest assured that every bit of intelligence earned at this distant colony will enrich the institutional memory back in Oakville, deep in Tim Hortons heartland.

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