Posted on 06/10/2006 11:22:23 AM PDT by SamAdams76
CANTON - Dunkin’ Donuts will begin awarding franchises in Arizona, Nevada and Texas next year in the next phase of its westward expansion.
The markets are part of the world’s largest coffee chain’s aggressive growth strategy to add 10,000 stores in the U.S. by 2020.
The company, which has 5,000 franchised stores in the U.S., is on a pace to ring up $4.4 billion in sales in the fiscal year that ends June 30, Dunkin’ Brands executives said yesterday. Dunkin’ Donuts has added 600 U.S. stores in the past 12 months, with the bulk of the growth in such markets as Florida, North Carolina and Ohio.
The double-digit revenue increase reflects a combination of new-store growth and rising single-store revenues. Dunkin’ wants to sell customers on new higher-ticket items such as its $4 fruit-and-yogurt Smoothies drinks, which launched last month in the Northeast.
But a more significant opportunity for growth may lie in plans to take Dunkin’ Donuts, a New England icon founded in 1950 in Quincy, from coast-to-coast.
The potential for expansion into new geographic markets was one of the main reasons that a consortium of private equity companies last year acquired Canton-based Dunkin’ Brands for $2.4 billion, Dunkin’ CEO Jon Luther said. Unlike its top competitors, McDonald’s and Starbucks, Dunkin’ Donuts only has stores in 35 percent of the top population centers and just a handful stores west of Chicago.
‘‘I showed them the map,’’ Luther said. ‘‘There’s some opportunity there.’’
As it expands, Dunkin’ is selling regional development franchise agreements to restaurant operators willing to open 15 to 20 stores in a market. The opportunity appeals to experienced franchisees of fast-food competitors whose territories are built-out and are looking for another brand with room to grow, Luther said.
Dunkin’ Donuts will begin awarding franchises in the Texas, Phoenix and Las Vegas markets in late 2007, with the first stores opening in 2008.
Just as McDonald’s recently added a new gourmet coffee line to improve its breakfast business, Dunkin’ Donuts is expanding its food and drink menu to boost sales during afternoon and evening hours. The typical Dunkin’ shop does 64 percent of its sales before 11 a.m., said Will Kussel, chief operating officer of Dunkin’ Brands.
After Luther became CEO in 2002, he added a 30-member menu development team led by executive chef Stan Frankenthaler, former owner of the trendy Cambridge bistro Salamander. Their mission: to design new lunch items that can be eaten behind-the-wheel by commuters and other busy consumers.
Single-serving pizzas, Cubano pork sandwiches, chicken biscuits, breakfast pizzas, brownies and gourmet cookies are now being test-marketed at a handful of Dunkin’ Donuts’ new prototype stores, including one in Pawtucket, R.I. A new line of fresh-brewed iced teas offered in unsweetened and fruit-flavored varieties also is in a test market.
‘‘Every cup of coffee is a la carte now, and that’s how we’re approaching the tea platform,’’ Frankenthaler said.
In addition to Dunkin’ Donuts, Dunkin’ Brands includes the Baskin-Robbins and Togo’s chains. Dunkin’ Brands has been owned by three private equity firms, including Boston’s Bain Capital and Thomas H. Lee Partners, since March.
That translates into about 43,000 stores if that same ratio could be applied throughout the country!
Around these parts, Dunkin Donuts are always used in giving directions. For example, we will tell somebody to "take a left at the Dunkin Donuts, go by two more of them and take a right at the third Dunkin Donuts..."
Dunkin Donuts stores can be found embedded in gas stations, convenience stores, office buildings and even inside of Starbucks locations (okay, so I was kidding about the last one but it almost seems that way).
When Starbucks moved in here a few years ago in full force, Dunkin Donuts didn't miss a beat. They simply opened stores across the street (if they didn't have one there already) and they are still mobbed. Now Starbucks does well too but they don't seem to be eating into DD's customer base at all. On the other hand, when Krispy Kreme came up this way, they got their butts kicked. Most of the KK's in the area are now shuttered.
I'm not really sure I can put my finger on the mass appeal of Dunkin Donuts. Their stores are ugly as hell, their service is often rude and indifferent and they don't exactly encourage you to hang around. The few tables they have are usually dirty and the chairs are very uncomfortable. They just want to get you in and out of there quickly and most of the business now goes through the drive-thru anyway.
But despite all of that, there is nothing like a cup of Dunkin Donuts coffee in the morning. The fancy stuff at Starbucks just doesn't cut it for me in the morning. It's got to be Dunkin Donuts coffee. Even if it does mean I have to get behind a bunch of old ladies who can't decide what kind of donut they want when they get to the front and other people who gum up the works with their complicated orders like sandwiches and multiple cups of coffee all different ways. Recently Dunkin Donuts is now serving up the same fancy espresso drinks as Starbucks and that is making the wait time even longer. Still, the lines are out the door just about every morning.
But Krispy Kreme really made Dunkin Donuts taste Krappy. Nothing like a soft, warm glazed donut, versus those stiff things DD sells.
I've done that but while it's pretty decent made at home, it's not the same.
You need a Bunn coffee maker.
One of my first jobs was at a DD. Loved it. Met nice people. Great learning experience for an 17 year old in retail. To this day I do not eat donuts though.
Glad to hear they are doing so well. Must check out their stock offerings.
I wonder what kind of map they showed the investors. There are Dunkin’ Donuts stores in Texas.
At the end of the long, straight road in front of our last house, there was a Dunkin’ Donuts. My favorites were Bavarian cream and chocolate cream filled donuts, the cake donuts, glazed, chocolate frosted, coconut... No Dunkin’ Donuts near by, now.
I'm not crazy about soft, gummy, chewy donuts that plug you up.
> You need a Bunn coffee maker.
And water from the Quabbin Reservoir.
Try the ones with the hole in the center.
I always expand after eating Dunkin' Donuts.
I can't stand Krispy Creme. They're waaaaayyyy too sweet. I miss Dunkin Donuts and wish they would return to Huntsville, Alabama.
DD is French owned. KKD is from North Carolina and in the Smithsonian Museum of American History.
"Nothing like a soft, warm glazed donut, versus those stiff things DD sells."
But try a KK coffe vs a Dunkin. You can clean paint brushes with KK coffee. As a matter of fact, the stuff I've tasted was probably used just for that purpose.
Dunkin Donuts has always been advertised on national TV down here so I was happy a few years ago when I was in New Jersey for business to make a visit to one of the stores and I was indeed happy.
Here's hoping they will put a store or two in my neck of the woods soon.
Well the fact is that Dunkin Donuts is so ubiquitous in the northeast that native New Englanders are shocked to not find one when they travel to other parts of the country.
This is SO true. I need a large iced every morning, it's like crack. When on vacation first thing I do is check the local phone directory for the closest one. This is not so much a problem around the Northeast and Florida but it ain't easy finding one in places like Detroit, Cleveland, Pittsburgh and Buffalo. Yes, Buffalo has many Tim Horton's but it just ain't the same.
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