Tim Hortons, the coffee and doughnut shop Canadians love, is set to open its first Twin Cities location in Minneapolis' Dinkytown.

Steve Young, owner of a divided building that houses Sssdude-Nutz independent doughnut shop and a Bruegger's Bagels that closed more than a year ago, said that Tim Hortons has signed a lease for the restaurant expected to open this fall.

Earlier this summer, Tim Hortons signed a deal with the Bloomington firm Restaurant Development Partners Corp., to begin franchises in Minnesota. The Minneapolis-St. Paul Business Journal reported the chain also plans to build a stand-alone shop on the site of a gas station in Brooklyn Park.

The company would not confirm details of its first Twin Cities locations. "We are very excited to be expanding into the Minneapolis market and look forward to being a part of the community," a spokesman said in an e-mail.

Tim Hortons has more than 3,600 outlets in Canada and about 800 in the United States, mainly in Ohio and Michigan. It has three Minnesota restaurants, two near Tower, including one at Fortune Bay Resort Casino, and one in Mahnomen at the Shooting Star Casino.

The restaurant is known for its full-service menu. Young said he doesn't see a lot of crossover between Hortons and Sssdude-Nutz, even though both are doughnut shops.

"Tim Hortons has a broad menu. The place next door sells customized doughnuts," he said.

"The market for coffee, doughnuts, and cookies in Dinkytown is rock solid," said Jacob Frey, who represents the neighborhood on the City Council. "Tim Hortons is simply jumping on a sweet match."

Bradley Taylor, owner of Sssdude-Nutz doughnut shop, said he is already in the process of expanding his weekday and weekend hours to handle customers.

He will celebrate his business' anniversary next month.

"I found out about the other doughnut shop through an architect who was looking at the space next door," he said.

Tim Hortons was started in the 1960s by hockey great Tim Horton, who played for the Toronto Maple Leafs for much of his 24 years in the NHL.

In addition to Tim Hortons, Dunkin' Donuts plans to add locations in Andover, Roseville, New Hope, Apple Valley, Burnsville, Eagan, Lakeville, St. Paul, West St. Paul and Woodbury.

Jim Buchta contributed to this report.