Dunkin’ Brands remains one of the consistently fastest growing franchise companies in the QSR industry. Now with expansion into California and new store designs rolling out, it’s full steam ahead.
Interview By Katie Lee
Dunkin’ Brands Group, Inc., the parent company of Dunkin’ Donuts and Baskin-Robbins, is consistently one of the fastest growing franchise companies in the quick-service restaurant (QSR) industry. As 2013 drew to a close, the company boasted 18,249 locations worldwide. Now, thanks to new restaurant designs for Dunkin’ Donuts and Baskin-Robbins, as well as the reopening of California for franchise development, Dunkin’ Brands looks to build on some already impressive numbers.
In July 2013, Dunkin’ Donuts signed its first Southern California multi-unit store development agreements with four franchise groups for a total of 45 new restaurants. The first freestanding locations are expected to open in 2015 in Orange and Los Angeles counties. Eventually, the company hopes to have 1,000 stores in the state.
“Based on its initial success, we soon extended recruitment efforts to include California’s Central Valley and Central Coast areas,” says Grant Benson, CFE, vice president of global franchising and business development for Dunkin’ Brands. “In January 2014, Dunkin’ Donuts opened Northern California for sale, resulting in the entire state being available for franchise development. To date, we have executed agreements to develop more than 150 traditional restaurants in California.”
Dunkin’ Brands also opened more than 50 non-traditional U.S. locations in 2013, at airports and other mass transportation terminals, casinos and resorts, military bases, and colleges and universities. In fact, the first Dunkin’ Donuts that became available to the public in California was a non-traditional site, which opened at the historic Barstow Station in Barstow, California, in November 2013. The company also has experienced continued growth in the hotel and lodging sector with the opening of two new Dunkin’ Donuts locations at Great Wolf Lodge resorts in Michigan and Virginia. In early March, a combination Dunkin’ Donuts/Baskin-Robbins restaurant opened in San Diego at The Embassy Suites San Diego Bay-Downtown, marking the debut of the first non-traditional Dunkin’ Donuts restaurant in San Diego County and the third non-traditional location in the state of California. In addition, the company opened 12 new airport locations. Currently, Dunkin’ has more than 600 non-traditional locations in the U.S.
Restaurant Facility Business recently interviewed Benson as well as his colleague Jon Gaiman, vice president of U.S. store development for Dunkin’ Brands, to gain insight into Dunkin’ Brands’ aggressive new-store expansion and its bold new design prototypes for Dunkin’ Donuts and Baskin-Robbins.
RFB: Almost 800 new locations opened globally in 2013, and now you’re on track to open 685 to 800 new locations in 2014. Are there any U.S. markets still untapped that you plan to enter this year?
Benson: “We currently have more than 7,650 Dunkin’ Donuts across the U.S., but feel there is still significant opportunity to expand the brand domestically. We look forward to continuing to recruit franchisees to develop the Dunkin’ Donuts brand in California, where we believe we can have as many as 1,000 restaurants throughout the entire state in the long term. Additionally, we plan on further expanding the Dunkin’ Donuts brand in Minnesota, Texas, throughout the Southwest, and in many other markets both east and west of the Mississippi, with the long term goal of having more than 15,000 restaurants in the U.S.
“On the Baskin-Robbins side, we have more than 2,450 locations across the U.S. Target U.S. markets in 2014 include in Florida and California.”
RFB: The company operates on a nearly 100% franchised model. How has this business model contributed to Dunkin’s success?
Benson: “By enabling us to expand quickly with both existing and new franchisees. Under our franchising model, we empower individual entrepreneurs who know their markets best to develop two world-class brands in their communities. This all comes with ongoing support from Dunkin’ Brands with regards to marketing, training, product innovation and store operations.”
RFB: When did Dunkin’ Donuts first open? When did it join up with Baskin-Robbins?
Benson: “Dunkin’ Donuts was founded in Quincy, Massachusetts, in 1950. Today, we have nearly 11,000 Dunkin’ Donuts restaurants in 33 countries worldwide. Baskin-Robbins was founded in Glendale, California, in 1945 and is the world’s largest chain of ice cream specialty shops. Baskin-Robbins has 7,300 retail shops in nearly 50 countries.
“For some history on how Dunkin’ Donuts and Baskin-Robbins became part of the same parent company, in 1973, London-based J. Lyons & Co., Ltd. purchased Baskin-Robbins. In 1978, J. Lyons was acquired by Allied Breweries, creating Allied Lyons. In 1990, Allied Lyons purchased Dunkin’ Donuts, and in 1993 created the Allied Lyons Retailing division to integrate Dunkin’ Donuts and Baskin-Robbins operations.”
RFB: More than 500 domestic Dunkin’ restaurants were remodeled in 2013. Tell me about the new restaurant design option and what were some of the architectural, design and operational changes made to those stores?
Benson: “Since the new restaurant design option was unveiled last year, more than 500 Dunkin’ Donuts restaurants have been remodeled domestically. There are plans to continue with this remodeling initiative in 2014.
“Dunkin’ Donuts’ new look includes four distinct restaurant design options for franchisees, each featuring variations in layout, color schemes, graphics, textures, furniture and/or lighting. The designs enhance the current restaurant appearance, environment and layout to serve people all day long. Unlike other quick-service restaurants, Dunkin’ Donuts allows franchisees to select individual elements from any of the four options, creating a restaurant design that reflects their personal tastes and preferences, and best serves their specific restaurant size and location.”
RFB: Did Baskin-Robbins also get a facelift?
Benson: “Yes, we also unveiled a new Baskin-Robbins restaurant design in 2013. The new design is built around five core elements, including a newly designed menu board system with an LCD screen; eye-catching ice cream “supergraphic” artwork; a wall that highlights the brand’s legacy of flavors; an updated brand logo; and whimsical pink spoon accents, including spoon-shaped door handles.”
RFB: How will the new prototype aid the facilities and operations team?
Jon Gaiman: “While the new Dunkin’ Donuts and Baskin-Robbins restaurant designs were primarily aimed at improving the consumer-facing store environment and guest experience, we’re constantly working to improve the setup of stations behind the counter and at the back of the house as well. This is especially important as we add new menu platforms, like Bakery Sandwiches at Dunkin’ Donuts, to ensure we maintain the speed of service our guests have come to expect from us.
RFB: What is the new typical square footage of your restaurants?
Benson: “A typical Dunkin’ Donuts restaurant has between 1,200 and 2,600 square feet. A typical Baskin-Robbins restaurant has between 800 and 1,500 square feet.”
RFB: Describe how Dunkin’ Brands handles repair and maintenance. Do you have an in-house maintenance department or do individual franchisees rely on vendors?
Gaiman: “Dunkin’ Donuts and Baskin-Robbins restaurants are owned and operated by individual franchisees, who are responsible for the repair and maintenance of their restaurants. However, our field-based operations team members offer ongoing support and guidance to our franchisees, including in the areas of store maintenance.”
RFB: How does Dunkin’ handle a typical maintenance call? An emergency call?
Gaiman: “Dunkin’ Brands manages a franchisee help line, which is utilized by restaurant owners if they have questions about store operations, maintenance or in the case of a store emergency.”
RFB: Does your maintenance, operations or construction group have any “green” initiatives in place or in the works?
Gaiman: “We kept sustainable building in mind with our new restaurant designs for both Dunkin’ Donuts and Baskin-Robbins. For instance, with the new Dunkin’ Donuts restaurant design we have upgraded our specifications to no-VOC paint and full stainless steel millwork, which incorporates recycled content, contains no formaldehyde, and emits fewer volatile organic compounds (VOCs) than traditional millwork. Franchisee orders for LED lighting packages have also increased in recent years, a trend we believe will continue in the coming years.
“All of the green features of our Dunkin’ Donuts restaurant specifications have been incorporated into the new Baskin-Robbins shop design, including low-flow plumbing and energy efficient lighting and HVAC. All new stores also include dipping cabinets and upright merchandisers with LED lighting, which use 50% less energy than CFL light tubes and last approximately 10 times longer.”
RFB: What do you enjoy most about your job day to day?
Gaiman: “While we’ve made great strides with regards to restaurant design and sustainable building, I enjoy waking up each day and working with my team to make our restaurants even better for our guests, our franchisees and the environment.”
RFB: What goals have you set for your team?
Gaiman: “Specifically with regards to sustainable building, our goals include further reducing our carbon footprint in the years ahead. In addition, we’re working to establish a baseline for energy and water usage for Dunkin’ Donuts franchised restaurants and set reduction targets by 2015. While we’ve made some significant strides in the area of sustainable building, we know there’s more we can do to make our stores even greener.”
[NOTE: This article originally appeared as the cover story of the April/May 2014 issue of Restaurant Facility Business magazine. Email the editor at[email protected].]