News
Tim Hortons, Cold Stone make progress on co-branding in N.Y.
August 12, 2009
Tim Hortons in Western New York is making progress on its co-branding test with Cold Stone Creamery, having added the ice cream shop to 10 of its Tim Hortons locations with five more planned in the region, according to a story in The Buffalo News.
The chains announced in February that the two companies planned to co-brand a total of 100 stores in the United States, 50 for each chain, by spring 2009. The test also has expanded to Canada, where the coffee and donut chain was founded and now has more than 2,900 stores. Six co-branded sites are planned in that country.
The stores share side-by-side counter space and integrated kitchen operations, one of the benefits of dual-branding, according to The Buffalo News.
Cold Stone has co-branded with other companies outside of the United States, including Denmark's leading chocolate manufacturer and retailer Sv. Michelsen for 13 international co-branded locations in Scandanavia.
The companies' efforts meet what experts say are the strategic points of a successful co-branded business model: complementary dayparts, expanded product mix and broader consumer appeal to eliminate the veto vote, especially in large groups.
From The Buffalo News:
"According to executives, Tim Hortons typically does its highest sales during the morning hours, while Cold Stone Creamery tends to do more business in the evening. As much as Tim Hortons tried to shore up its later business by offering lunch and dinner fare such as soups and sandwiches, combining the two is an attempt at securing a more steady traffic flow."'It made sense operationally . . . It's a great match,'" said David Clanachan, chief operations officer at Tim Hortons.
Yum! Brands is a good example of pairing complementary concepts and has 4,500 multibranded U.S. locations. Other companies also are trying the strategy, including NexCen brands, which opened a tri-branded MaggieMoo's, Great American Cookies and Pretzelmaker store in an Indianapolis mall last fall. The company also opened international co-branded Great American Cookies and Marble Slab in Canada and Bahrain.
Leading QSR chains Wendy's and Arby's, now owned by the same parent company, recently announced they will be testing dual-branded units in the United States, following an international franchise agreement for 135 co-branded sites in the Middle East and North Africa over the next 12 years.
Correction: The above headline and story corrects a reporter's error that erroneously stated that the Tim Hortons and Cold Stone planned an additional 50 co-branded stores.
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