Event: On September 4^th, 2002 Wendy’s International (NYSE: WEN - News)  reaffirmed its 2002 earnings guidance and said August same-store sales rose 3.3% at Wendy's restaurants in the U.S.   In a press release, the fast-food chain said August same-store sales rose 6.7% at Tim Hortons restaurants in Canada and 8.4% at U.S. restaurants.

"We maintained good momentum at Wendy's with positive sales and margin expansion at our company units and even stronger same-store sales growth at our Wendy's franchise stores and at Wendy's in Canada ," the company said.

Wendy's International, Inc. is one of the world's largest restaurant operating and franchising companies, with $8.3 billion in 2001 systemwide sales & more than 8,400 total restaurants opened through its brands of Wendy's Old Fashioned Hamburgers®, Tim Hortons and Baja Fresh®.

The Key Point: The results posted by Wendy’s are a function of great food, good pricing, products that are unique tasting & excellent execution.  I know that many of my friends and family members will take a Wendy’s burger over McDonalds or Burger King any day of the week.  Add me to that list too.

What Really Makes This Interesting to Me: While the above comments are nice I want to comment on Wendy’s acquisition of Tim Hortons.  For those that don’t know about Tim Hortons, the company was equivalent to the popularity of Dunkin Donuts in the early to mid 1970’s.  The only difference was that Tim Hortons was a Toronto-based doughnut chain and Dunkin Donuts owned the U.S. market.

Tim Horton was actually a hockey player with the Toronto Mapleleafs during the 1970s who started his initial doughnut stores in Toronto .  After Tim passed on the restaurants were run by the family for years and continued to build up a VERY LOYAL following.  The food was good, service was good and prices were good.  The menu was doughnuts and coffee for the most part.  Sometime in the late 70’s-early 80’s the company was sold to an entrepreneur who expanded Tim Horton’s nationwide.  Before you knew it, Tim Hortons was Canada ’s doughnut/coffee shop of choice.  As a matter of fact, in many small cities Tim Hortons was the only other alternative to McDonalds, the leading fast food company in North America .

When a snowstorm hit in a small city in Canada and you needed a plow there was always a snowplow hanging out at Tim Horton’s.  Pick up the phone and call the restaurant.  They’ll come dig you out.  Need to find a cop?  Probably at Tim Horton’s too. 

Anyways, Wendy’s saw the value of Tim Horton’s in the early 90’s and bought the company lock stock and barrel.  But here is where the value is. 

Wendy’s didn’t have a breakfast menu.  But Tim Hortons did!  Over the last 7-10 years Wendy’s has expanded the Tim Hortons franchise into every nook and cranny in small Canadian cities.  What do I mean by this?

To put it into perspective lets use Bathurst , New Brunswick as an example.  My father grew up in Bathurst and my family used to go visit grandma there every 2-4 years (we lived in CA and TX).  I noticed Tim Horton’s even back when I was a small kid because the only competition in this small city was McDonald’s.  Going to Bathurst has always been like stepping back in time because the city was primarily dependent on a coal mine and a paper mill as the largest employers in the city.  As a kid living in San Jose , California and Dallas , Texas it was like going through a time warp when we went to Canada to visit relatives.  When I would go to Bathurst as a kid I recall that Burger King, Taco Bell and Wendy’s were nowhere to be found.  Heck, the city didn’t get its Burger King until around 1986-1988 and they didn’t get a Wendy’s until around 1992 or so.  I remember when the Burger King went in because a mall was built across the street from it.  The anchor tenant was Kmart, a big deal because it was the 1^st for the city.

Anyways, over the years Tim Horton went from 1 to 2 to 3 restaurants in the city as it tried to saturate the market and make it unprofitable for other companies to emerge as potential competition.  What makes the story even more interesting is that, after Wendy’s bought the company in the early 90’s Bathurst exploded with Tim Horton’s as they started popping up in new gas stations throughout the city in strategic traffic areas.  In 2001, when I went and visited, I counted at least 8 areas where I could get a Tim Horton coffee or Doughnut. 

What is the point?

The population of this city is only 60,000 people!  A small city with a Tim Horton’s everywhere………and believe me folks………They make the $$$$........

I just thought I would amuse everyone with some of my observations of Wendy’s / Tim Hortons and what the restaurant means to many Canadians. 

Finally, when you watch an NHL game you will always notice TIM HORTONS advertising on the boards………Remember that……..TIM HORTONS = quality doughnuts……LOL