Biz Briefs: Hortons' Hole in One

With more than 120 fast-food chains clogging commercial arteries in the U.S., is there really room for another? Paul House, president of the quietly expanding Tim Hortons restaurant chain, thinks so. Since Wendy's International bought the Canadian institution in 1995, Tim's (as the chain is often called) has opened more than 250 stores in the U.S., and it plans to double that number by 2008. "We would like to become the biggest brand in the U.S.," House avows.

Tim's is off to a good start. In the second quarter, it generated 67% of Wendy's operating profit even though it accounted for only around 30% of Wendy's $951 million in revenues. To highlight that value, Wendy's announced last month that it would sell as much as an 18% stake in Tim's by early next year. In Canada, where Tim's is bigger than McDonald's (2,492 stores vs. 1,375), the 41-year-old company dominates many small- and medium-size markets; it hopes to do the same in cities like Dayton, Ohio, and Detroit. Part coffee-and-doughnut joint, part sub shop, Tim's is confining its U.S. growth to the Northeast and Midwest, close to its base of operations in Ontario and with just enough stormy weather to keep management smiling. "It's no secret that coffee sales are better when it's cold and miserable," says Chris Laganos, who heads U.S. operations. "When I wake up and it's rainy out, I am a happy boy." --By Steven Frank and Moira Daly