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Log In / Register | Jan 22, 2018

Dunkin' Donuts: Expanding? Or, Just Roadside Advertising?

Yesterday, my college roommate and I, were traveling from NJ to CT, along on I-95, for a franchise vendor convention and some good ole harness racing action.  We were running a few minutes behind, so we decided to get on the road thinking there must be a decent cup of coffee, at one of the service areas, along I-95.  Caught up in our conversation, we unconsciously passed by 3 or 4 service areas before my partner reminded me that we needed to make a coffee stop.  Being a part of the Dunkin’ Donuts tribe, we were looking for The LOGO™.  Didn’t see a single DD mark, on I-95 N, so we pulled in to the Milford Service Station, which was slightly past Exit 40, knowing McDonalds was selling a decent cup of Joe for $1.  Surprisingly, they even had a Drive-Thru – which was perfect, being on-the-go.

Today, Dunkin’ Donuts announced a 23 store deal along Connecticut Turnpike – unfortunately, it leaves us a day late, and each, a $1 short.  Interestingly enough, however, Dunkin’ managed to shed some light on their expansion plans with a confusing statement buried in the 5th paragraph:

To drive its expansion efforts, Dunkin' Donuts has aligned its strategy to support the growth opportunities and consumer needs of individual marketsAs a result, the company continues to expand with single and multi-unit opportunities with no minimum unit requirements.

Dunkin’ Donuts Has Aligned Its Strategy - With Whom?

Dunkin’ says, “…the consumer needs of individual markets” – this would have made sense, yesterday, when we were the consumers; however, they go on by twisting the message into Single and Multi-Unit Opportunities With No Minimum Unit Requirements.

Who is there Target Market?  Individual Retail Consumers or Independent Prospective/Existing Franchisees?

Many years ago, as young 29 year old entrepreneurs, my partner and I reviewed a Dunkin’ Donuts prospectus offering.  The sales guy, D. Ron, kept saying we’re not selling single units because we are a “pedigree” franchise system.  Therefore, by limiting our offering to only multi-unit investors/owners we eliminate wasting our time with the bottom of the barrel folks.  You know, the ones we rejected and got picked up by the good folks in the Quiznos franchise system.

What’s happening with the value of the Dunkin’ Donuts Brand?

According to D. Ron’s definition – they must be diminishing the “Brand” equity away from their one time “Pedigree” status by selling/flipping "single" unit franchise opportunities. 

UPS ICFO's Guest writes:

A member of the "For Z-Profits" sub-committee questioned:
When I read the final [approved] version of the latest FAC minutes, I had to look at the date of the minutes – since the minutes did not reflect my recollection of the same FAC meeting that I attended. Everything was twisted around by them. What was wrong in communicating the true dialogue that transpired in the minutes distributed to the franchisee community? What are they hiding? Is the kick backs? Or, is it the inevitable “deferred” tax issue?

This leads me to believe that the existing Dunkin’ Donuts franchisees are not “aligned” with The Brand’s expansion strategy since their own FAC members don’t even know the Truth.

The Truth Is:

In a public market, franchisees will always be subordinated to the shareholders.  The time to act and take control of your destiny is under the current ownership dynamics.  When UPS acquired MBE both were publically traded and their franchisees are suffering because they never had a voice.  However, their voice was never a part of their culture – but “collaboration” is always a cordial approach to UPS' corporate social responsibility mantras.   

On a final note, the sales volume difference in the Dunkin’ Donuts system between Region 1 and Region 2 is in the Apple Cider.  Saw the billboard heading down Connecticut Turnpike I-95 Southbound.  Region 2 got the “single” screw product promotion – which means, The Master controls your profitability through your own marketing $$$.  Just lovely...eh?

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