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FDD Talk 2017: What You Need to Know About the Dunkin’ Donuts Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on May 21, 2017

in Coffee Franchise, Donuts Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings



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In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Dunkin’ Donuts franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Dunkin’ Donuts franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Dunkin’ Donuts franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Dunkin’ Donuts’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • average gross sales by geographic region for continental U.S. freestanding Dunkin’ Donuts Restaurants (and separately, for Dunkin’ Donuts/Baskin-Robbins Combo Restaurants) that have been open for business to the public for at least one year during a one-year measuring period from October 25, 2015 to October 22, 2016
  • average gross sales by geographic region for continental U.S. shopping center/storefront Dunkin’ Donuts Restaurants (and separately, for Dunkin’ Donuts/Baskin-Robbins Combo Restaurants) that have been open for business to the public for at least one year during a one-year measuring period from October 25, 2015 to October 22, 2016
  • average gross sales by region for continental U.S. gas/convenience Dunkin’ Donuts Restaurants that have been open for business to the public for at least one year during a one-year measuring period from October 25, 2015 to October 22, 2016
  • average cost of goods sold and labor costs by region for continental U.S. Dunkin’ Donuts Restaurants (and separately, for Dunkin’ Donuts/Baskin-Robbins Combo Restaurants) for the period from November 1, 2015 to October 31, 2016

Section I – Background Information

16 Things You Need to Know About the Dunkin’ Donuts Franchise

Looking for a New Chief Financial Officer



1.  In late March, Dunkin’ Donuts announced that Paul Carbone, the company’s Chief Financial Officer at the time of the press release, would be stepping down from his position at the end of April. Kate Jaspon, Dunkin’ Brands Vice President, Finance and Treasurer, has stepped in as interim CFO while the company searches for a replacement. Dunkin’ Donuts says that the company will consider both internal and external candidates.

Executive Promotions

2.  At the end of February, Dunkin’ Donuts promoted five of its executives: Grant Benson was promoted to Senior Vice President, Franchising & Development, Dunkin’ Brands; Amanda Helming was promoted to Vice President, Dunkin’ Donuts U.S. Brand Marketing & Pricing; Santhosh Kumar was promoted to Dunkin’ Brands’ Vice President, Enterprise Infrastructure, Data Security & Privacy; Mark Youngworth was promoted to Vice President, International Brand Marketing & Digital Communications; and Jeremy Biser was promoted to Vice President, International Operating Systems, Learning, Food Safety & Equipment.

Plans to Remove All Artificial Colorings from U.S. Menus by End of 2018

3.  Earlier in the year, Dunkin’ Brands Group, Inc. (the parent company of Dunkin’ Donuts and Baskin-Robbins) announced that all artificial colors will be removed from its U.S. products by the end of 2018. The company says that the plan to remove synthetic colors is part of its ongoing efforts to provide its customers with high quality, great tasting products with cleaner ingredients.

4.  Both the Dunkin’ Donuts and Baskin-Robbins development teams have been working with suppliers to replace the artificial colors with ingredients that have only naturally sourced colorings.



5.  Dunkin’ Donuts will remove synthetic colors across its entire menu, including donut frostings/icings, fillings, toppings, baked goods, coffee flavorings, breakfast sandwiches, and frozen beverages such as fruit smoothies and Coolata frozen drinks.

6.  Although a majority of the menu items will have natural coloring in the future, there will be an exception on select supplier branded ingredients produced by other companies used as toppings or decorative elements.

Partnership with Amtrak

7.  Dunkin’ Donuts recently announced that it had partnered with Amtrak to make Dunkin’ Donuts Original Blend and Dunkin’ Decaf hot coffee varieties available on board Amtrak Acela Express high-speed trains throughout the Northeast Corridor.

8.  The coffee will be served all day in the train’s First Class cabin and in Cafe Acela. To ensure that the coffee has the same quality and taste as the coffee served in its restaurants, the Acela Express will use the same equipment used at Dunkin’ Donuts restaurants.

Ready-to-Drink Iced Coffees Now Available in Stores



9.  In early February, Dunkin’ Donuts rolled out a line of bottled, ready-to-drink iced coffee beverages. The drinks are now available in grocery stores, convenience stores, mass merchandisers, and at select Dunkin’ Donuts restaurants throughout the U.S.

10.  Dunkin’ Donuts entered into a deal with Coca-Cola in September that will allow the beverage company and its bottling partners to manufacture and distribute the pre-packaged drinks.

11.  The iced coffees currently come in four different flavors: Original, Mocha, Espresso, and French Vanilla. The drinks possess the same taste and quality of the iced coffees served in Dunkin’ Donuts restaurants and are made with high-quality Arabica coffee beans and real sugar and milk.

12.  The new line of iced coffees marks Dunkin’ Donuts’ entry into the ready-to-drink coffee category. According to Dunkin’ Brands Chairman and CEO Nigel Travis, “Entry into the ready-to-drink coffee category reinforces our position as one of the world’s leading coffee brands, increases our brand relevance with new and current customers, and creates yet another way for America’s coffee-loving consumers to run on Dunkin’.”

Company History

13.  Dunkin’ Donuts was founded in 1950 by William Rosenberg in Quincy, Massachusetts. Rosenberg’s restaurant, which opened in 1948, was originally called Open Kettle. Over the next few years, the restaurant became successful in the Quincy area and Rosenberg started franchising in 1955. In the early 60s, Rosenberg’s son Robert became CEO of Dunkin’ Donuts at the age of 25 and that same year, the company opened its 100th location.

14.  Dunkin’ Donuts was acquired by Allied Lyons, which already owned Baskin-Robbins, in 1990. The two restaurants merged operations and were sold as Dunkin’ Brands in 2005 to three private-equity firms: Bain Capital Partners, the Carlyle Group, and Thomas H. Lee Partners.

15.  Both companies still operate as Dunkin’ Brands today. There are currently over 8,500 Dunkin’ Donuts U.S. locations and over 3,300 international locations.

Entrepreneur’s Franchise 500

16.  Dunkin’ Donuts has ranked every year on Entrepreneur’s annual Franchise 500 list in the past decade. The company’s highest rank was No. 2 in 2007 while its lowest rank was No. 36 in 2009.

Section II – Estimated Costs

  • Please click here for detailed estimates of Dunkin’ Donuts franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Dunkin’ Donuts’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis



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