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Thursday August 13, 2009

The 'idea guy' behind Tim Hortons saw others get rich while he went bankrupt

Entrepreneur was the ill-fated hockey player's first partner in the little doughnut chain that grew

Special to The Globe and Mail

Continued from Page 1

In any event, Mr. Charade had to sell his house to make ends meet. As related in Mr. Hunter's book, he sat down with Mr. Horton and said, "Tim, you've got it made. It's me that's got trouble. I'm not a hockey player. Nobody's going to want my autograph anywhere."

By this point, Spencer Brown, the original franchisee in Hamilton, had sold to an unknown Englishman, who was skimming the profits, a situation that helped prompt Mr. Charade and Mr. Horton to form a new company called Tim Donut Ltd. on Jan. 27, 1965.

In about a month's time, Mr. Charade ran into Mr. Joyce, a Hamilton police officer who operated a Dairy Queen outlet. Almost immediately, Mr. Joyce became the new franchisee.

Despite Mr. Charade's financial problems, he and Mr. Horton continued their business relationship for a few more months, although Mr. Joyce complained that he was getting no support, especially from Mr. Charade.

By early 1966, it became apparent that Mr. Charade had to leave, and he resigned. His deal with Mr. Horton amounted to about $10,000 - but there was no cash. Mr. Horton assumed a lot of debt and Mr. Charade walked away with next to nothing to show for his pioneering efforts.

"Dad was in dire straits," his son André said. "The banks ruled you."

As Mr. Joyce recalled, "Jim was an ideas guy. He had the idea for this company, the basic fundamentals, but he didn't execute. Jim didn't have any money and relied on employees, but you need to depend on leadership."

It took a few months, but Mr. Horton and Mr. Joyce agreed on a partnership in September, 1966. Mr. Horton became president and Mr. Joyce vice-president.

Mr. Charade worked as a salesman for two years with Manufacturers Life Insurance - until doughnuts lured him away again. He went on to direct franchise sales for Mister Donut in New England and Canada, a move that irritated his former business associates.

At one point in 1970, some four years after he had initially departed, Mr. Charade was hired back by Mr. Horton and Mr. Joyce to sell franchises, a period that covered nine months. He even took over operation of a store.

Then, for the next 20-odd years or so he worked at a number of sales jobs, suiting up for AAMCO Transmission in Philadelphia, MAACO, the auto-body and auto-painting company, and Meineke Car Care Centres out of Atlanta, Houston and Charlotte, N.C. He was a franchise sales manager for Ron Smythe, a friend from the AAMCO days, who expanded Meineke from 100 shops to 1,000.

"Jim was very genuine, very sincere and very personable," Mr. Smythe said. "That's why he was so good at franchising."

Then a life-shattering event happened on Feb. 21, 1974: Mr. Horton died after flipping his sports car near St. Catharines, Ont., while driving from Toronto to Buffalo, where he played for the Sabres. Before he jumped into his car, Mr. Horton had been drinking at Mr. Charade's apartment in Toronto.

"When Tim died in the car accident, my father was so distraught he spent the whole day in the bathroom," his son André said. "I remember coming home from school and my dad did not want anyone to see him with any trace of tears in his eyes. I didn't see him for two days. He lost his friend and a link to the chain he helped start that day. I can't imagine what he was going through."

Upon Mr. Horton's death, Mr. Joyce assumed control of the company along with Mr. Horton's widow Lori. In 1975, Mr. Joyce bought Mrs. Horton out for $1-million.

In 1993, Mr. Joyce was having dinner and drinks one night at Hy's, a downtown Toronto playspot, when who should he see on the drums but Mr. Charade?

Mr. Joyce asked him if he would come and work for him in what would be his third stint with the company. Mr. Charade said yes and accepted the job of finding and negotiating leases for restaurant sites.

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