Tim Hortons has devoted fans in the U.S. One need only to read the Twitter and Facebook feed on the brand’s U.S. website to see the passion. “Can you please open a Tim Hortons in Cincinnati???” writes Kevin Ryne Laile. “I just had the best/fastest/nicest @TimHortonsUS service!! The new one at 5 mile & Newburgh is awesome,” tweets @lemonyellowsun.

Yet the dedication of a few has not translated into the type of market domination the brand has seen in Canada, where Tim Hortons accounts for 42 percent of all quick-service transactions and 75 percent of quick-service caffeinated beverage sales.

Thirty years after opening its first store in the U.S., Tim Hortons’ share of fast-food bakery sales is less than 2 percent, according to Euromonitor. Size plays a role; competitors McDonald’s, Starbucks, and Dunkin’ Donuts operate 10 times the number of stores. But other factors are at play, such as low brand awareness and consumer loyalty to established American brands. Krispy Kreme, for example, operates fewer than 300 stores, compared with Tim Hortons’ 860-plus U.S. units, and enjoys more market share.

“Tim Hortons saw 3 percent sales growth in 2013, which is not bad,” says Elizabeth Friend, senior consumer foodservice analyst at Euromonitor. “But Dunkin’ saw 6 percent growth, while Krispy Kreme saw 7 percent.”

Still, Tim Hortons is determined to become a major player in the U.S. Its most recent annual report called the U.S. a “must-win” market and outlined a top-line, five-year growth strategy that focused on extending dayparts, increasing check averages, expanding the rollout of its bakery-café model, and seeding new markets. And that was before the brand was purchased by Burger King, which moved its headquarters to Canada, christened the new company Restaurant Brands International, and promised to invest in Tim Hortons to set it up for U.S.—and worldwide—success.

“When I look at the U.S. market, I see the world’s largest economic market,” Tim Hortons then-CEO Marc Caira told the Wall Street Journal in May 2014. “I see the world’s largest foodservice market. I see a food market that continues to grow. I see a population that continues to grow. I see a country [that’s similar]. … When you look at all these things and you have a brand like Tim Hortons, why would you not go into that market? To me, it’s not a question of not being there, but what are you going to do that’s different for you to succeed?”

Past performance

The U.S.’s first Tim Hortons opened near the Canadian border in Tonawanda, New York, in 1984. Wendy’s International Inc. purchased Tim Hortons parent company TDL Group Ltd. for $425 million in 1995. The goal was to leverage Tim Hortons’ coffee and baked goods to drive guests into cobranded Wendy’s/Tim Hortons units on both sides of the border during the breakfast daypart.

There were early signs that the partnership might falter. Tim Hortons cofounder Ron Joyce sold his stock in Wendy’s International in 2002 after losing confidence in senior management decisions, such as switching from locally baked goods to frozen par-baked product shipped from a central warehouse. And U.S. stores continually missed sales goals despite significant marketing investment.

“American consumers were confused. They didn’t understand how the two brands worked together, so the partnership just didn’t work,” says Darren Tristano, a restaurant industry consultant for Technomic.

Still, Canadian Tim Hortons stores performed well, accounting for one-quarter to one-third of parent company Wendy’s earnings in 2004. On the strength of those stores, investors began pressuring Wendy’s to spin off Tim Hortons to increase shareholder value. In 2005, Wendy’s announced plans to roll out its own breakfast menu by 2007. The next year, it listed Tim Hortons on the New York Stock Exchange and earned more than $670 million on the first day of trading. And in August 2006, Wendy’s told The Street is would sell its $4.17 billion worth of Tim Hortons stock.

Tim Hortons corporate ownership moved back to Canada in 2009, while U.S. operations remained in Dublin, Ohio. Cobranded units with Wendy’s remain in operation, though the two brands are no longer tied at the corporate level.

Since that time, the Tim Hortons standalone growth strategy in the U.S. has come under scrutiny from stockholders and industry-watchers alike. Thirty-six stores in the Northeast closed in 2010. U.S. same-store sales dipped 0.5 percent in the first quarter of 2013, inciting pressure from hedge fund investors Scout Capital Management LLC and Highfields Capital to curb U.S. expansion efforts in favor of buying back shares.

Now with the merger with Burger King, it remains to be seen how the “Must-Win” plan outlined by Caira, who is now vice chairman of Restaurant Brands International, will be adjusted, if at all.

The current state

With systemwide sales of $589.5 million in 2013 and more than 850 units operating, Tim Hortons ranks 41st among U.S. quick-service brands, according to the 2014 QSR 50. The chain operates in 10 U.S. states—Michigan, Maine, Connecticut, Ohio, West Virginia, Kentucky, Pennsylvania, Rhode Island, Massachusetts, and New York—with the largest concentration of stores in the Midwest and Northeast.

Last year saw the chain extend its breakfast menu until 5 p.m., expand its cold specialty beverage line to include Frozen Green Tea and Frozen Hot Chocolate, and test on-the-go offerings such as Spinach and Egg and Chorizo hand-held pies and a Meatball Panini, all in an attempt to reach a broader American audience and drive up average unit volumes in existing stores.

“Tim Hortons has a much bigger presence in the U.S. than people know,” Friend says. “They are definitely a player.”

A player in a field of tough competitors all vying for a share of U.S. breakfast, lunch, and beverage dollars. Along with Tim Hortons, Euromonitor places 24 other brands in the U.S. bakery fast-food category, including fast-casual concepts such as Panera Bread, Au Bon Pain, and Corner Bakery. Factor in convenience-store chains like 7-Eleven, Wawa, and Sheetz, and you have a market saturated with choice.

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However, working in Tim Hortons’ favor as it seeks to stand out is a menu that straddles the line between fast food and fast casual. “They’re a notch above McDonald’s and just below Panera when it comes to food,” Tristano says. “The average check is less than $9, but the offering is closer to bakery-café than coffee [quick serves].”

“They are unique,” Friend says, “in that what they offer is closer to full-meal options than others in their category. Food—especially dinner, snack, and specialty beverage—has been a focus in the U.S., and it shows.”

Still, there is the issue of getting the uninitiated to step into a Tim Hortons stateside.

Tim Hortons is Canada’s No. 5 consumer brand, according to Interbrand, and sells eight out of every 10 cups of coffee poured there. According to YouGov’s August 2014 Brand Index, only 30 percent of Americans are aware of Tim Hortons, while 90 percent or more know Dunkin’ Donuts and Starbucks.

A variety of factors drive those numbers. Both Starbucks and Dunkin’ are established national brands with significant brand-building media spends each year. Plus there is the retail component. Starbucks, for example, sold more than $1 billion in packaged coffee and tea at grocery stores in 2013, bringing its brand to millions of consumers who might not otherwise interact with it.

But at the heart of the matter is the simple fact that Americans do not connect with the brand’s story and links to Canadian nostalgia the way their neighbors to the north do. They view Tim Hortons as simply another bakery-café option—and an unfamiliar one, at that.

“Tim Hortons is essentially starting from scratch in the U.S.,” Friend says. “There is not enough awareness for there to be public perception about the brand, good or bad.”

The positive news for Tim Hortons, though, is that once a guest is introduced to the brand, they rank it comparatively to Dunkin’ and Starbucks on quality and significantly higher than Starbucks on value, according to YouGov’s research.

To reach its goal of 300 new stores by 2018, Tim Hortons is aggressively courting would-be franchisees. Area development and master franchisee deals have already been signed in new markets such as St. Louis; Youngstown, Ohio; Fort Wayne, Indiana; and Fargo, North Dakota. Franchise start-up costs are similar to Dunkin’ Donuts: net worth of $500,000 plus liquid assets in the $250,000–$300,000 range.

“I understand the attraction to the U.S. market,” says Peter Saleh, New York–based analyst at Telsey Advisory Group. “There’s a lot of money to be made if you do it right. But there’s also the risk of losing money for many years as Tim Hortons builds brand recognition. I don’t know that they are going to find a lot of franchisees outside core markets willing to do that.”

At the center of U.S. expansion efforts is the Tim Hortons Café & Bake Shop concept that launched in 2010. The chain describes the prototype on its website as featuring “contemporary exteriors, warm, inviting interiors, advanced equipment and new digital menu technologies.” In an August 2014 report, Morningstar analyst R.J. Hottovy noted the format’s positive impact on same-stores sales and building and equipment costs in the U.S. market.

Looking forward

The question on everyone’s mind, of course, is how the Burger King buyout will impact Tim Hortons’ U.S. plans.

Opinions vary. Some say the merger should help Tim Hortons align itself with savvy master franchisees here in the States and move into battleground states like Texas and Illinois. There is also the potential to expose millions of Burger King customers to the Tim Hortons brand by switching from Seattle’s Best coffee in favor of Tim Hortons products.

Others believe the deal will have little effect on U.S. growth efforts, but might be a positive for overseas expansion. Burger King operates 18,000 stores in 100-plus countries. Pre-sale deals are already in place to open 120 Tim Hortons stores across Qatar, Kuwait, the UAE, Oman, and Bahrain by next year, plus an additional 100 Tim Hortons stores in Saudi Arabia by 2018.

“I’m not totally sold that the U.S. should be a focus for Tim Hortons,” Friend says. “There are plenty of other international markets where there’s opportunity for organic growth versus fighting for market share.”

If the chain is to remain focused on U.S. growth, targeting Millennials with a message of quality is a smart move, Tristano says.

“The Millennial consumer is always looking for something new,” he says. “Tim Hortons could be that for them. Kids see Dunkin’ Donuts as older, their parents’ place. And they don’t have enough money to eat at Panera, but are very focused on quality. If they try Tim Hortons and experience the quality, they’ll pay more.”

Tristano’s advice is telling: the food, not the brand, is the key to find success in the U.S.