Nigel Travis Talks Dunkin’s Strategy

In QSR Magazine’s September issue cover story, Carolyn Walkup writes: the midst of the worst recession in decades may seem like a tough time to take the reins of a restaurant company that sells discretionary treats not needed in the everyday diet. However, Nigel Travis, whom Dunkin’ Brands hired to head its Dunkin’ Donuts and Baskin-Robbins brands in January 2009, quickly showed he was up to the task.

Fresh from a four-year record of achieving excellent results at Papa John’s, Travis set out to do the same at the privately held, 60-year-old treats company. Dunkin’ Brands’ board of directors chose Travis to succeed CEO and industry veteran Jon Luther. Luther, who joined Dunkin’ Brands in 2003, remains as executive chairman of the board and worked with the board to develop an orderly succession plan.

In announcing Travis’ appointment, Luther singled out his accomplishments in several companies he headed of building strong franchisee networks, improving sales, and furthering global growth.

In spite of the economic downturn, Dunkin’ Donuts opened 350 new stores worldwide in 2009, with 250 of those in the U.S. When counting sister Dunkin’ Brands treats concept Baskin-Robbins, franchisees opened 550 stores last year. Dunkin’ Donuts units alone number nearly 6,400 in the U.S. and 2,700 overseas.

“We think this trend will continue and get better,” says Travis, who predicts that Dunkin’ Donuts brand openings this year will exceed last year’s to total 500 newcomers worldwide.

“The recession caused some difficulties,” he says. “High unemployment had a negative impact. The biggest impact has been the lending environment and getting new people to come in.”

He’s optimistic, though, about recent talks with banks, and has found some that “seem very positive about our brand.”

“The recession is just a problem you have to attack with vigor,” he says. “We are focused on the top line and are reducing costs of operating and construction. Our franchisees worked with their store economics.”

The brand does seem to be faring well, according to restaurant consultant Aaron Allen, founder and chief executive of Aaron Allen Restaurant Consultants, who credits Dunkin’ with doing a good job of keeping costs in line.

Dunkin’s policy of allowing franchise agreements with no minimum number of store openings required, along with its flexible unit designs utilizing smaller footprints, encouraged franchise development in these challenging times. Design choices include kiosks, gas stations, in-line units, and end caps, as well as free-standing stores.

Read more: QSR Magazine

Dunkin’ Sees Benefit from Lowering Threshold for Franchisees

Jon Chesto reports in the The Patriot Ledger that a dramatic change in Dunkin’ Donuts’ franchising policy to make it easier for new franchisees to open a Dunkin’ shop has helped fuel the chain’s growth during the first half of this year.

Canton-based Dunkin’ Donuts reported on Wednesday that it enjoyed a net increase of 338 new locations worldwide in the first six months of 2010, including 75 new stores in the United States. The company currently boasts of more than 9,000 locations worldwide.

The chain, run by Dunkin’ Brands Inc., changed its policy to allow new franchisees to sign a development agreement for as few as one to three locations. Previously, Dunkin’ had required first-time franchisees to sign development agreements for at least five locations.

Grant Benson, vice president of franchising and market planning at Dunkin’ Brands, said the company made the change about a year ago, partly to help new Dunkin’ franchisees land the financing they need. Benson said the change certainly helped continue to propel the chain’s expansion through the headwinds of an economic downturn.

“We have provided franchisee candidates more flexibility by allowing smaller development commitments,” Benson said. “In some cases, it could be as few as one, (but) we would like to be able to see at least two or three.”

Benson said much of the recent U.S. growth took place in the Southeast and in the Midwest, while overseas growth was strong in Korea and China.

Benson attributed the flexibility of the Dunkin’ Donuts model – shops can be opened in hospitals, train depots or gas stations – as a key element of its success. “That flexibility doesn’t exist with a lot of other concepts,” Benson said.

Jim Coen, president of the Dunkin’ Donuts Independent Franchise Owners association, said this is the first time he’s seen Dunkin’ Donuts allow development agreements for one-location franchises since he’s been involved with the chain. However, Coen said he expects most franchisees will continue to pursue multiple locations.

“The average franchisee nationwide owns at least six shops,” Coen said. “There’s an economy of scale, a point where you reach critical mass, that you really need.”

The company didn’t provide comparable growth numbers for the same six-month period in 2009. Benson said there were 171 net new locations in the U.S. in all of 2009, and 351 net new locations worldwide.

“It speaks to the staying power of the brand and the profitability of the brand,” Benson said. “It’s not a fad. It’s here to stay and built to ride out some of the turbulent times.”

The Patriot Ledger

Ex-Dunkin’ Exec Joins Denny’s as CMO

Adweek reports that a week after splitting with Omnicom’s Goodby, Silverstein & Partners on its $60 million ad account, Denny’s has named Frances Allen chief marketing officer, an open position.

She held that title at Dunkin’ Brands from 2007-09, where her primary agency partner was IPG’s Hill, Holliday in Boston. Her resume also includes tenures at Pepsi-Cola, Sony Ericsson and Frito-Lay.

Debra Smithart-Oglesby, interim chief executive officer and board chair of Denny’s, said in a statement: “We believe her ability to drive brand reputation through compelling marketing campaigns will play an important role at Denny’s. [She] will be responsible for enhancing the focus of our national and local marketing efforts in order to re-energize and grow the Denny’s brand.”  

Denny’s has about 1,600 U.S. stores. Most of the chain’s advertising has centered around its breakfast offerings, including high-profile promos in the last two Super Bowls.

The company has had a series of management changes of late, with CEO Nelson Marchioli, who led the firm since 2001, leaving in June amid pressure from investors to transition Denny’s to a franchise-oriented business model.

Adweek

Dunkin’ Donuts Turns to Street Artists for its First Ever Times Square Billboard

Dunkin’ Donuts, America’s all-day, everyday stop for coffee and baked goods, today unveiled possibly the company’s most prominent advertising yet, a billboard in the heart of New York City’s Times Square. For this billboard, Dunkin’ Donuts has taken a decidedly “fresh” approach, turning to local street artists to create a unique design inspired by urban art of the New York City streets.

To create this billboard, Dunkin’ Donuts enlisted renowned street artist Robb Buono and his team of artists including UrbanMedium, TazRoc and Steven Lopez. Buono developed his style on the streets of New York in the ’80s and early ’90s. He is renowned as the one to call for art direction in hip-hop music video production, and he has worked on hundreds of worldwide productions across the music, feature film and commercial industries. UrbanMedium and TazRoc have collaborated for the past seven years, most notably on design for the RockCorps Organization.

In another fresh move, over the past six weeks while the artists were finalizing the design, Dunkin’ Donuts used its billboard space for a secret teaser campaign that featured no brand identification or imagery, inviting people to visit www.missionfresh.com to submit a guess as to who is behind it. One winner will be randomly selected from everyone who submitted a guess to receive $5,000 and an all-expense paid New York City theater weekend for two. Beginning today, the web site will feature the art used for the Dunkin’ Donuts billboard, as well as artist bios, and a behind-the-scenes video showing how the artists created the billboard.

According to John Costello, Chief Global Customer and Marketing Officer at Dunkin’ Brands, the brand turned the billboard design over to local artists specifically to produce a visually captivating design that would appeal to the millions of people who pass through Times Square each month. “The unveiling of our Times Square billboard gives the brand incredible visibility in one of the most recognizable locations in the world and reinforces Dunkin’ Donuts’ position as the nation’s coffee leader,” he said. “Using this prominent space to create one of the world’s largest pieces of street art is yet one more way Dunkin’ Donuts stands out from other brands.”

Ambac Regulator Wins Support From Dunkin Brands on Plan

Jody Shenn of BusinessWeek reports that  Ambac Financial Group Inc.’s regulator won support from Dunkin Brands Inc., Sonic Corp. and Hertz Corp. as he seeks to overcome objections from some of the insurer’s clients to his plan to rehabilitate the second-largest bond guarantor.

Executives of donut retailer Dunkin Brands, drive-in restaurateur Sonic and car-rental firm Hertz, all of which issued Ambac-insured bonds, filed affidavits in support of Wisconsin Insurance Commissioner Sean Dilweg’s motion in state court yesterday opposing the legal bids by two groups of bondholders. Opponents of his plan said it would favor banks who bought default protection on one type of mortgage security.

“Aside from being factually wrong” in their allegations about the plan, Dilweg’s challengers should be turned aside because the commissioner “has broad discretion to decide how to best to protect policyholders and the public from the grave risks posed by Ambac’s deteriorating condition,” the department’s lawyers at Foley & Lardner LLP said in the filing.

Two months ago Dilweg forced New York-based Ambac’s insurance unit to split in two after its capital was depleted by projected losses on collateralized debt obligations tied to subprime mortgages, halting payments on $35 billion of other mortgage bond policies and additional contracts.

At the same time, Ambac reached a tentative agreement to pay $2.6 billion in cash and $2 billion of surplus notes to banks holding $16.5 billion of insurance on CDOs that was left in its main account. Surplus notes can be paid if the company has enough capital at some later point in time.

‘Substantial Collateral Damage’

“A rehabilitation of Ambac in its entirety could have substantial collateral damage in several facets of Ambac’s business,” Roger A. Peterson, a director in Wisconsin’s office of the commissioner of insurance, said in the filing. That could include requirements for borrowers such as Dunkin Brands to make accelerated payments on certain debt if Ambac were seized completely, he said.

Dunkin Brands Chief Financial Officer Kate Lavelle said in an affidavit that a failure of Ambac would result in a “very substantial restriction of operational cash available to” the donut company because of agreements related to a $1.5 billion “whole business securitization.”

The filing by the insurance department of Wisconsin, where Ambac’s insurance unit is based, also included affidavits by Sonic CFO Stephen C. Vaughn and Hertz Corp. Treasurer R. Scott Massengill.

Opposed to Plan

Policyholders seeking to block Dilweg’s plan include owners of residential mortgage-backed securities such as hedge fund firms Aurelius Capital Management and Fir Tree Partners and holders of Las Vegas Monorail Co. municipal debt such as mutual fund manager Eaton Vance Corp. The RMBS holders would receive 25 cents on the dollar in cash for their claims and the rest in surplus notes under his plan.

Their argument that they would get less than CDO holders isn’t accurate because the CDO settlement offers between 35.8 percent and 54.4 percent of projected claims, while mortgage- bond claims would be paid in their entirety, as they arise, when considering the surplus notes they would also receive, the department said, citing an analysis by BlackRock Inc.

CDOs package pools of assets such as mortgage bonds or high-yield company loans into new securities with varying risks.

Read more at: BusinessWeek

Kick-Start Your Day With the Dunkin’ Turbo Big Taste Tour from Smuckers

Smucker’s Cross-Country RV Brings Dunkin’ Turbo™ Coffee Across America May Through September 2010
 
ORRVILLE, Ohio, May 11 /PRNewswire/ — Need a boost of delicious Dunkin’ Donuts® flavor to kick-start your day? From May through September 2010, fans of Dunkin’ Donuts packaged coffee can track down the Dunkin’ Turbo Big Taste Tour as it offers consumers across America free samples of the new taste of Dunkin’ Turbo coffee.  Dunkin’ Turbo coffee (11 oz., msrp $7.49-$7.99) is the newest variety of packaged Dunkin’ Donuts coffee, now available wherever you buy groceries.

Thanks to a Dunkin’ Donuts branded RV that’s designed to be a coffee-brewing kitchen on wheels, the Dunkin’ Turbo Big Taste Tour will travel to over 30 U.S. cities, offering wet and dry samples of Dunkin’ Turbo coffee at both large public events and local landmarks. Spending multiple days at 10 major tour stops listed below, the Dunkin’ Turbo Big Taste Tour offers various activities to engage consumers with the new Dunkin’ Donuts blend.  These include:

•Dunkin’ Turbo Wheel – Consumers can spin the Dunkin’ Turbo wheel for a chance to win a variety of prizes, including a year’s worth of Dunkin’ Turbo packaged coffee, Dunkin’ Donuts grocery lists, reusable grocery bags or 11 oz. coffee packages.
•Big Taste Mascot – Take a picture with the Dunkin’ Donuts mug mascot to remember your time with the Dunkin’ Turbo Big Taste Tour.
•Coupon Giveaways – In addition to offering free 3 oz. cups of coffee and 1 oz. dry samples of Dunkin’ Turbo coffee, Big Taste Tour staffers will distribute coupons for $1 off 11 oz. packages of Dunkin’ Turbo coffee, available where groceries are sold.

The Dunkin’ Turbo Big Taste tour will appear at the following large-scale consumer events.  Check out www.dunkinathome.com for a full listing of locations and times.

May 13-15
 World Championship Barbecue Cooking Contest (Tom Lee Park)
 Memphis, TN
 
May 29-31
 Taste of Cincinnati (Fifth St., from Race St. to Broadway)
 Cincinnati, OH
 
June 11-13
 Taste of Charlotte (Tryon St., from MLK Jr. Blvd. to 6th St.)
 Charlotte, NC
 
June 26-27
 Safeway’s National Capital Barbecue Battle XVIII, (Pennsylvania Ave., from 9th to 14th St.)
 Washington, D.C.
 
July 2-5
 Taste of Minnesota (Harriet Island)
 St. Paul, MN
 
July 9-11
 Taste of Dallas, West End (Fair Park)
 Dallas, TX
 
July 23-25
 Gilroy Garlic Festival (Christmas Hill Park)
 Gilroy, CA
 
July 30-Aug. 1
 California State Fair (Cal Expo Fairgrounds)
 Sacramento, CA
 
Aug. 13-15
 A Taste of Edmonds (6th St. and Bell St.)
 Edmonds, WA
 
Sept. 3-6
 A Taste of Colorado (Civic Center Park)
 Denver, CO
  
 About The J.M. Smucker Company

For more than 100 years, The J.M. Smucker Company has been committed to offering consumers quality products that help families create memorable mealtime moments.  Today, Smucker is the leading marketer and manufacturer of fruit spreads, retail packaged coffee, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods beverages in North America. Its family of brands includes Smucker’s®, Folgers®, Dunkin’ Donuts®, Jif®, Crisco®, Pillsbury®, Eagle Brand®, R.W. Knudsen Family®, Hungry Jack®, White Lily® and Martha White® in the United States, along with Robin Hood®, Five Roses®, Carnation®, Europe’s Best® and Bick’s® in Canada. The Company remains rooted in the Basic Beliefs of Quality, People, Ethics, Growth and Independence established by its founder and namesake more than a century ago. The Company has appeared on FORTUNE Magazine’s list of the 100 Best Companies to Work For in the United States 11 times, ranking number one in 2004. For more information about the Company, visit www.smuckers.com.

The J. M. Smucker Company is the owner of all trademarks, except Pillsbury is a trademark of The Pillsbury Company, LLC, used under license; Carnation is a trademark of Societe des Produits Nestle S.A., used under license; and Dunkin’ Donuts is a registered trademark of DD IP Holder LLC used under license.

How Not to Run an Online Promotion, Dunkin’ Donuts Style

MediaBuyer Planner reports that it is as instructive to look at how not to run a social media campaign as it is to study successful ones. The latest object lesson comes from Dunkin’ Donuts, which was promoting its free iced coffee day – a promotion that, done correctly, should have generated plenty of positive feedback from fans.

Instead, the Dunkin’ Donuts Facebook wall was inundated with fans complaints who felt misled by the national promotion only to find that the offer was good at a few select locations, writes Inquisitr (via MarketingVOX). And even in those locations, some freebies were not available.

As one (former) fan wrote: “No free iced coffee in MA??? Are you kidding me? I just sent my mom to DD for the free iced coffee.” And another: “What happened to free iced coffee day? You advertised and everything…. you LIED.”

While the ad did clearly state, “In Participating Markets,” and the markets were listed, it was run nationally.

Reminiscent of Oprah Chicken

The campaign is similar to one that took place a year ago, though the Dunkin’ Donuts promotion was of a much smaller scale. Last May, Kentucky Fried Chicken partnered with Oprah Winfrey in a chicken giveaway that resulted in long lines and angry, turned-away customers.

KFC coupons were announced on Oprah’s talk show. Consumers could go to the KFC grilled chicken website to download a coupon for a free, two-piece Kentucky Grilled Chicken meal. But the combination of Oprah and free food proved to be too much for the website, which became overwhelmed by downloads, just as restaurants became overwhelmed by visitors and began turning them away – without their free chicken.

Judge Allows Fraud Claim Against Dunkin’ Brands and Others

Joseph Mallia of Newsday reports that a Nassau Supreme Court fraud claim against Dunkin’ Donuts’ parent company, brought by an investment company partly owned by former Islander and Hockey Hall of Famer Pat LaFontaine, will proceed after a judge’s ruling this week.

Editor’s note: Be sure to read Janet Spark’s article at Blue MauMau: Judge Grants Fraud Trial Against Dunkin’, Kainos

The suit accuses Dunkin’ Brands and other defendants of “fraud, concealment and negligent misrepresentation” after LaFontaine’s company invested, and lost, at least $1.75 million.

LaFontaine’s company, High Tides Llc, says it was induced to keep investing in a Dunkin’ Donuts franchise group, even as the group was on the edge of insolvency.

Nassau Judge Stephen A. Bucaria issued a court order in the case Tuesday, dismissing some claims and keeping others, so the case remains active. No date has been set for the next hearing. Attorneys for both sides in the case were unavailable for comment Thursday. LaFontaine is not a party in the suit, though he is a director of the company that filed it.

The case revolves around an ambitious plan by Kainos Partners Holding Co. Llc to open dozens of Dunkin’ Donuts stores in Buffalo, Las Vegas, Houston and South Carolina.

LaFontaine’s role included signing autographs at Buffalo-area Dunkin’ Donuts shops. In addition to his long stints as an Islander and a shorter time as a New York Ranger, LaFontaine is considered an all-time great with hockey’s Buffalo Sabres. His participation in the company was important because Kainos was competing in Buffalo against Tim Horton’s, a rival doughnut and coffee seller named for another former Sabres star. Newsday reported in 2004 that LaFontaine lives in Huntington.

In December 2008 a Kainos executive told LaFontaine that the total Kainos enterprise was worth $70 million, court records say. But by mid-December 2008 “Kainos was without money to continue operations.”

Kainos executives gave LaFontaine financial statements and induced him to keep investing even as Kainos was failing, the documents say. The lawsuit is not filed against Kainos, but individually names four executives of that company along with the corporation Dunkin’ Brands.

Dunkin’ expands breakfast value menu

Nation’s Restaurant News reports that amid increasing competition in the morning daypart, Dunkin’ Donuts has expanded its 99-cent breakfast value menu to Indiana.

A company spokesman said Monday that the expansion of the value menu to 22 stores in the Indianapolis, Fort Wayne and South Bend markets, is “a natural extension” of the limited-time offer Dunkin’ launched last November at 500 of its restaurants in Chicago.

The 99-cent menu includes a sausage, egg and cheese wrap; a bacon, egg and cheese wrap; an egg and cheese wrap; a coffee roll; a nine-piece order of hash browns; and a five-piece box of the chain’s Munchkins doughnut holes.

“Today, our customers are looking for new choices to keep them going without compromising on price, convenience, or taste,” said Vicky DeSalvo, a field marketing manager for Dunkin’ Donuts.

As high unemployment has hurt breakfast sales, quick-service players like McDonald’s and Burger King have pushed their $1 offerings in recent ad campaigns. Subway also joined the fray this week with the introduction of its national breakfast menu.

Separately, Dunkin’ Donuts introduced bagel twists Monday at participating stores in the more than 9,000-unit chain. The twists, which are billed as more portable and easier to eat than traditional bagels, are available in such flavors as cheddar cheese, cinnamon raisin, sour cream and onion, pretzel salt, blueberry, and French toast. The new item is priced at $1.39, Dunkin’ said.

Read more: Nation’s Restaurant News

Iced Dunkin’ Dark Roast is Heading Your Way

Boston Globe reports that Dunkin’ Donuts has a news flash for iced coffee buffs who hanker after a drink that’s dark, bold, and cold.

The Canton-based baked-goods-and-coffee chain is gearing up to roll out Iced Dunkin’ Dark Roast, which it describes as its “darkest, boldest iced coffee yet.”

According to Dunkin’, this particular coffee blend is “carefully roasted longer for a bolder, richer flavor and a stronger finish.”

Dunkin’ notes that its iced coffee is “fast becoming as ‘hot’ as the classic cup of Dunkin’ Donuts hot coffee.”

Customers who opt for Iced Dunkin’ Dark Roast will be able to customize their order with a flavor shot. “A shot in the dark” features such flavors as French vanilla, hazelnut, and blueberry, the chain said.

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