Columns

Dollars to doughnuts

Deirdre McMurdy January 1 2000
Columns

Dollars to doughnuts

Deirdre McMurdy January 1 2000

Dollars to doughnuts

Columns

Deirdre McMurdy

It’s not yet clear where it is taking us, but as the decade and the century draw to a close, a growing number of people have been seduced by the siren call of technology, its tremendous potential, and its dramatic impact on our lives. We expect to go ever further, faster. We embrace change for its own sake. And we glorify the youth that characterizes the industry and its stars. Nothing seems more rivetting these days than the tales of twentysomething computer whizzes starting a new venture, taking it public and scoring millions. It no longer seems to matter if there are earnings, products or jobs driving the market premiums.

And that is why, more than ever before, its important to remember—and celebrate—guys like Ron Joyce. He is one of the low-key entrepreneurs who built significant wealth and created tens of thousands of jobs in a quiet, traditional way: relying on hard work, common sense, savvy timing and a pinch of good luck. “We’ve always just tried to keep things simple,” he says. “Simplicity and consistency are much harder to achieve than people realize.”

A burly man with the bearing of the policeman he once was, Joyce has managed that challenge with apparent ease. There are now more than 1,600 Tim Hortons outlets across Canada and more than 100 in key U.S. markets. The company employs about 40,000 people. And despite a mature and competitive market, same-store sales at Tim Hortons in Canada were up 12.5 per cent in the third quarter, and the company expects to open 200 new stores in 2000. It is also Canada’s largest food-service chain with, according to Joyce, a 50-per-cent market share.

Joyce says growth has continued at such a steady pace in part because of the company’s deliberate approach to change. New products like cappuccinos, soups and sandwiches have been introduced gradually. “We don’t want to confuse the customer or the franchisee—and above all, we want to avoid change just for the sake of it,” he says. “It’s always tempting to go for something newer, something that seems more exciting. But that’s a bigger risk than folks realize.”

Joyce himself is no stranger to risk. He left school in the tiny village of Tatamagouche, N.S., in 1946 at age 15. His mother was a widow with three children, and he needed to help her support his younger brother and sister. Like many people from the East Coast, Joyce drifted to Ontario. He then bounced around several factory jobs in Hamilton. In 1951, he began a five-year stint in the Canadian navy, and when that was over, returned to Hamilton and became a cop.

As a policeman, Joyce earned about $90 a week—and found it tough to support his young family. “I was always looking for extra jobs to make ends meet,” he says. On the

advice of a navy buddy, he bought a Dairy Queen franchise in 1962. And when he heard about the start-up of the Tim Hortons chain, he leapt at the opportunity to become an early franchisee, offering just beverages and doughnuts.

In 1967, he became a partner with Tim Horton and began running the business as the hockey player concentrated on his career. Joyce, who became sole owner in 1975 after Horton’s death, says he always understood that for the Tim Hortons brand to take hold, he had to ensure that his franchisees made money and bought into the corporate philosophy. “That’s the only way to grow fast and to keep things consistently clean and fresh and appealing,” he insists. “People have to know what to expect when they see your sign.”

While most businesses in the 1990s have made much of their global ambitions, Joyce is adamant that Hortons limit its focus to Canada and the United States. “Sure we’ve looked at the possibility of expanding all over the world, but in the end, you’ve got to stick with what you know,” explains Joyce. “There are just too many variables elsewhere.” Despite an opportunity to move into the Chinese market, for example, he says that issues like differences in baking flour could have made a crucial difference to the end product and its quality.

In 1995, Joyce sold Tim Hortons to Wendy’s International of Ohio for $600 million. It was, he says, a wrenching decision, but a necessary one. “I didn’t just want to pass the company on to my kids to run—there were too many other people’s livelihoods at stake for personal empire building,” he says. He was reluctant to take the company public because “I’m a private guy. I couldn’t see myself traipsing around making all those presentations and answering all those questions all the time,” he admits.

Now 69, Joyce continues to serve as senior chairman of Tim Hortons. He is also actively involved in the company’s charitable children’s foundation, established as a memorial to his late business partner. He is currently developing a golf course and resort in Nova Scotia, and is also backing a venture that proposes to offer an alternative domestic airline by buying up regional airlines from Air Canada and Canadian Airlines International. Joyce is a pilot: he learned to fly to reach franchise locations across Canada more quickly. “I’ve always had a restless kind of energy,” he says.

Joyce brushes aside prevailing rhetoric about excessive taxes and a brain drain. He considers Canada a land of opportunity—a place where a guy with restless energy can parlay that into a fortune. And he understands that no matter where technology may take us over the next decade, people will still take time out for a good quick snack—as long as the quality and the price are right.