Tim Hortons Warms To Cold Stone

Cold Stone Creamery parent company Kahala Corp. has announced a multi-store co-branding test initiative with Tim Hortons Inc., which would transition up to 50 stores to co-branded sites within the next few months.

Kahala and Tim Hortons said the co-branding of Cold Stone Creamery and Tim Hortons concepts will pan out in up to 50 stores in each chain in the U.S. by spring 2009.

Co-branding the stores will leverage complementary traffic patterns and create cost-efficient opportunities for further growth of both brands, the companies said.

Cold Stone Creamery, which has tested concepts in convenience stores, drives significant customer traffic and sales in the evening market while Tim Hortons creates a substantial portion of its traffic and sales in the morning and lunch dayparts, the companies said.

New York convenience retailer Wilson Farms recently test-marketed the placement of Tim Hortons concepts in some of its stores.

“We are pleased to expand our association with Tim Hortons," said Kevin Blackwell, CEO and founder of Kahala Corp. "Successful results from our initial test stores suggest that bringing our concepts together will increase the customer bases for both brands, allowing further sales growth opportunities."

The companies recently co-branded the concepts in two existing Tim Hortons locations in Rhode Island with successful early results. In mid-February Tim Hortons products will be offered in an existing Cold Stone Creamery location in Ohio.

“Continued development and awareness of the Tim Hortons brand beyond our base of 500 restaurants in the United States is a key element of our overall approach to U.S. growth," said Don Schroeder, president and CEO at Tim Hortons. "Co-branding selected locations with Cold Stone Creamery, one of the most popular ice cream concepts in the United States, is a complementary opportunity we are looking forward to pursuing as part of this test initiative."

Existing Cold Stone Creamery and Tim Hortons locations in Michigan, Western New York, Ohio, Rhode Island, Maine, and Connecticut will be identified and reconfigured to offer both brand concepts.

Once a store is identified as a potential co-branded site, the franchisee will be approached with the opportunity to expand their offerings with the complementary brand, the companies said.

“Cold Stone Creamery is pleased to collaborate with such a dominant and respected brand in North America,” said Lee Knowlton, Chief Operating Officer of Kahala Corp.

Cold Stone Creamery is known for its signature ice cream indulgences, which are handcrafted onsite with a variety of mix-ins on a frozen granite block. Tim Hortons is known for its premium coffee and wide range of beverages, as well as fresh-baked goods and breakfast and lunch offerings.

“The combination of Tim Hortons and Cold Stone Creamery products is ideal for both businesses and the customers,” said David Clanachan, Chief Operations Officer of Tim Hortons, U.S. and International. "That is why Cold Stone Creamery is the best partner for this test."

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