Doughnuts and ice cream make sweet bedfellows at Dunkin' Brands Group. The company is a leading multi-concept quick-service restaurant franchisor that operates both the Dunkin' Donuts and Baskin-Robbins chains. It has more than 16,800 franchise locations operating in about 60 countries. With some 10,000 units in about 30 countries (including approximately 7,000 in the US), Dunkin' Donuts is the world's leading doughnut chain. Baskin-Robbins is a top ice cream and frozen snacks outlet with more than 6,700 locations in 45 countries (2,450 in the US). The company went public in mid-2011.
Dunkin' Brands raised $422.8 million in the public offering. After using the bulk of its IPO proceeds to repay debt, the company used the leftover cash to begin the a rapid expansion of the Dunkin' Donuts chain. During 2011, Dunkin' Brands opened 374 Dunkin' Donuts in the US, 341 Dunkin' Donuts International, 571 Baskin-Robins International, and 49 Baskin-Robins US. The company hopes to similar numbers in 2012, with plans to eventually have 15,000 Dunkin' Donuts worldwide.
By using a franchising model, Dunkin' Brands has been able to aggressively expand its doughnut and ice cream concepts globally without the cost of new construction and operating expenses. The business model also lets Dunkin' Brands control how franchisees operate their shops, helping ensure consistency in quality and service. Its growth has put the company in the same league as other big multi-concept outfits, including Wendy's/Arby's Group and YUM! Brands, and paved the way for its 2011 IPO.
Dunkin' Brands has been particularly focused on expanding its chains into growing international markets such as Asia and the Middle East. About 500 Dunkin' Donuts outposts are slated to open throughout India, the first of which are expected to launch by early 2012. Its Baskin-Robbins chain is forging new territory in China, with plans to open 100 ice cream stores through 2018. Meanwhile, the company is working with its Gulf region licensee, Galadari Ice Cream Company, to expand Baskin-Robbins' presence in several Middle East countries. Domestically, Dunkin' Brands is looking to push its concepts out of their core markets: Dunkin' Donuts has long been a powerhouse in the Northeast, while Baskin-Robbins has a stronghold in California.
In early 2012, Dunkin' Brands signed a deal with franchisee cooperative National DCP (NDCP). The deal made NDCP the exclusive supply chain provider for all Dunkin' Donuts restaurants in the continental US. Dunkin' Brands hopes the arrangement will streamline its franchising system and provide significant cost savings for its franchise community.
At the same time, Dunkin' Brands is working to upgrade and enhance its aging brands with new menu items. Dunkin' Donuts has focused its marketing efforts on coffee, taking on Starbucks and McDonald's in the morning java business. In addition, through a partnership with Keurig, Dunkin' Donuts is expanding its coffee offerings in the home and office space with the 2011 introduction of single cup servings of its coffee brand in Keurig K-Cups. Baskin-Robbins, meanwhile, has unveiled a line of iced drinks, along with soft serve ice cream, and has renewed its focus on its popular ice cream cakes
Nigel Travis replaced Jon Luther as CEO in 2009. He previously served as head of #3 pizza delivery chain Papa John's. Luther, who remains as chairman, had led Dunkin' Brands since 2003 when he was brought in from AFC Enterprises' Popeyes Chicken & Biscuits chain.
Formerly part of UK-based beverage maker Allied Domecq, Dunkin' Brands was acquired for $2.4 billion in 2006 by Bain Capital, The Carlyle Group, and Thomas H. Lee. All three private equity firms sold shares in the IPO, with each cutting their ownership stake down to 26%. – less