Tim Hortons (symbol THI on Toronto) has long been seen as an iconic Canadian company.

Co-founded by Canadian hockey player Tim Horton, the company opened its first outlet in Hamilton, Ontario, in 1964. At the time, the shop offered only two menu items: coffee and donuts.

The company added a variety of new menu items over the following years, such as the Timbit (a bite-sized donut ball) and new muffins and cakes. In 1999, Tims added iced cappuccinos to its menu.

The chain’s size grew steadily, as well. Tim Hortons now operates 3,169 coffee-and-donut stores in Canada, and 613 in the U.S. Franchisees operate 99.5% of its stores. (We analyze Tim Hortons in our Successful Investor newsletter.)

U.S. expansion builds on this Canadian stock’s roots

After Tim Hortons merged with Wendy’s International in 1995, the company began to expand into the United States. (Wendy’s later spun off Tim Hortons as a separate company. It began trading on Toronto and New York on March 24, 2006).

Many Canadian stocks have tried to expand into the U.S. over the years. Many have had difficulty there. Some Canadian stocks’ expansion efforts have failed miserably.

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Canadian Tire (symbol CTC.A on Toronto) provides a memorable example of a failed U.S. expansion. In 1982, the retailer bought a chain of Whites automotive-retail stores in Texas. By 1985, Canadian Tire had lost $300 million on this purchase. That’s when the company decided to sell the division and retreat to Canada.

To cut its risk, Tim Hortons is focusing its U.S. expansion strategy on towns and cities that are close to the Canadian border, in states such as Ohio, New York and Michigan. That lets it profit from Canadian tourists and Americans who are already familiar with its brand.

Canadian stocks: The Middle East is a whole new arena for Tim Hortons

Tim Hortons now plans to make its first expansion outside North America under a new deal with Dubai-based Apparel Group.

Under the terms of the deal, Apparel will open up to 120 Tim Hortons coffee-and-donut shops in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman in the next five years. Apparel will also operate the outlets.

We’ll keep you up to date on this Canadian stock’s ongoing expansion

Tim Hortons international expansion gives the company strong growth potential. But as we mentioned, expanding outside Canada carries risks.

In The Successful Investor, we’ll continue to monitor Tim Hortons expansion, and update our buy/sell hold advice on the stock accordingly. You can follow our analysis of Tim Hortons and dozens of other Canadian stocks yourself when you take a no-risk subscription.

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Happy Canada Day!

…from all of us here at The Successful Investor Inc. and TSINetwork.ca. We wish you and yours a terrific holiday weekend, and a great summer.