• by Aaron Baar , February 6, 2009

Executives of restaurant chains Tim Hortons and Cold Stone Creamery hope so as they begin adapting some of their stores into co-branded locations that offer new possibilities for marketing.

"We're excited from a marketing perspective with the products we can offer exclusively in these co-branded locations," Lee Knowlton, chief operating officer of Kahala Corp., the two chains' parent company, tells Marketing Daily. "When we get creative and turn ourselves loose, that's when our marketing and research and development departments can have some fun."

He mentioned ideas like muffin "bowls" (i.e., with the tops removed) to serve ice cream in, ice cream-based coffee drinks or donut piece mix-ins for the ice cream as potential exclusive menu items at the co-branded locations.

The companies hope to have converted 50 of each chain's stores into co-branded use by this spring. It already has two co-branded locations in Rhode Island, and will begin offering Tim Hortons products in a Cold Stone Creamery in Ohio. Future rebranded locations will be in Michigan, western New York, Ohio, Rhode Island and Connecticut.

While Tim Hortons is a well-known chain in Canada, the company has only 500 stores in the United States, mostly in the northern and northeastern sections. Although it has fewer stores overall, Cold Stone Creamery has a larger geographic footprint in the U.S.

"We're a strong regional player with aspirations to become a national player in the United States," David Clanachan, chief operations officer of Tim Hortons, tells Marketing Daily. In addition to sharing values such as "freshness and value and service," executives from the sister companies also realized "there's a big strategy in complementary dayparts," Clanachan says. For coffee and donut chain Tim Hortons, most traffic is in the morning; for ice cream purveyor Cold Stone, most of the traffic is in the late afternoon and evening.

The strategy is not unheard of. Dunkin' Brands has several co-branded Dunkin' Donuts and Baskin Robbins stores. However, the Cold Stone/Hortons combinations are intended to operate a bit more seamlessly, using décor that is relevant to both brands and an electronic menu board that adjusts offerings based on the time of day (more Hortons products in the morning, and Cold Stone in the evening, for instance.)

Each chain will continue its current advertising and marketing schedules. There are no concrete plans to market the two brands together yet. "Part of the next phase of the test is to figure out, 'How do we advertise these co-branded locations?'" Clanachan says.