Mmmmm…Donuts – Slam Dunkin’ a Sweet Opportunity for Franchisees?
State Bar Certified Specialist, Franchise & Distribution Lawby
Tal Grinblat
818.907.3284
Some say it’s the coffee. Others say it’s a fresh, hip menu and new look to go with the old favorites. Whatever the case, potential franchisees should chew on this: Dunkin’ Donuts is set to shower Los Angeles and Orange counties in sugar-laden pink.
The donut chain is scheduled to open 45 new stand-alone stores in Southern California later this year. They’ve been selling franchises in Southern California since January. Their first Southern California location opened at Camp Pendleton last year. And wait…there’s more coming.
The donut chain is offering “non-traditional” locations to the franchisee-hungry market, in a baker’s dozen of choices:
- Airports
- Big Box Retailers
- Bus Stations
- Casinos
- College Campuses & Universities
- Concert Venues
- Healthcare Facilities
- Supermarkets
- School Campuses
- Sports Stadiums
- Theme Parks
- Train Stations
- Turnpike Service Plazas
Dunkin’ Donuts says these unique venue storefronts have the benefit of captured audiences and high traffic.
A Sweet Deal for Franchisees?
For the time being, the franchisor is prepared to offer some incentives to buyers willing to set up shop. According to the Los Angeles Times, the donut chain will reduce royalty fees for the first few years of operation, and will kick in $10,000 for marketing.
The company expects to increase the number of units by about five percent this year, citing “incredible passion for the brand” in California, according to Chief Executive Officer Nigel Travis:
Expansion to California has always been part of our plan to grow Dunkin’ Donuts’ presence in the U.S. We have maintained our disciplined approach to expand steadily while focusing on initiatives to improve restaurant economics and franchisee profitability. These initiatives include our recent agreement with our franchisee-owned and operated distribution and procurement facility, which ensures the same cost of goods to franchisees in both established and new markets by 2015.
If you’re considering purchasing a Dunkin’ Donuts franchise, or any other franchise for that matter, you may want to read my blog: Before You Buy a Franchise, for more information.
Tal Grinblat is a Certified Specialist in Franchise and Distribution Law, designated by the State Bar of California’s Board of Legal Specialization. Contact him via email: tgrinblat@lewitthackman.com for more information.