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......Dunkin'...Donuts........



A picture of the Dunkin' Donuts shop in Piccadilly.

 

Dunkin' Donuts Inc

In 1956 two brothers-in-law, Bill Rosenberg and Harry Winouker, broke off their partnership, each to begin his own chain of coffee and doughnut shops. Harry founded Mister Donut which grew to 550 shops, while Bill founded Dunkin' Donuts which grew into over 1,800 shops.

In late 1989 Allied-Lyons plc made an offer to acquire Dunkin' Donuts Inc., the world's largest doughnut and coffee franchise chain. The board of Dunkin' Donuts unconditionally recommended the offer and the American government approved the deal in January 1990. According to the Report of the Directors (Allied-Lyons plc) the consideration was £196 million.

At this time (1990) Dunkin' Donuts had 1,850 outlets around the world selling sandwiches, croissants, muffins and bowls of chilli as well as coffee and doughnuts. Some 1,600 of these stores were in the US and a further 120 in Japan. Dunkin' Donuts were already associated with the company as DCA (another American subsidiary) were already supplying mixes and ingredients. This was not the only doughnut operation which Allied-Lyons were running, they were already in partnership with the Spanish bakery company Panrico.

Within days of Dunkin' Donuts becoming an Allied-Lyons company it made an offer to buy the Mister Donut chain, the business which had been started by Harry Winouker. Mister Donut had 558 shops in the United States and Canada and claimed to be number two in the US market after Dunkin'. Mister Donut, with its one-eyed chef logo, was owned by the American food processing company International Multifoods Inc, and after US government approval, the sale was concluded at the end of February 1990. Mister Donut operated as a subsidiary of Dunkin Donuts but the franchisees of Mister Donut stores were offered the opportunity to convert to Dunkin' Donuts stores if they so wished. Collectively the two operations had 2,400 outlets.

On 30 January 1991 it was announced that Robert Rosenberg, Chairman and Chief Executive Officer of Dunkin' Donuts Inc., would be joining the Board of J. Lyons & Co. Ltd. from the start of the new financial year.

The first Mexican store opened in January 1991 in Guadalajara, Mexico's second city. The licensee, Jose Farah, hoped to open several satellite stores following the opening of the main store which featured a drive-through service area. Dunkin' Donuts' Robert Rosenberg, writing in the staff journal Lyons Mail, said negotiations were well advanced with major petroleum companies with a view to license them to sell Dunkin' Donuts. The Marriott hotel at Los Angeles airport also became a franchisee during 1991.

Wherever you go in America there are doughnut shops with the doughnut becoming part of US culture. It is different in Europe and by early 1991 there were only seven doughnut stores in the area; four in London (Charing Cross, Piccadilly Circus, Carnaby Street and Notting Hill Gate), two in Dublin and one in Glasgow. Andy Gallaher, General Manager of Dunkin Donuts UK, was recruited to put that right. The idea was to establish a firm foundation in the UK before trying to expand the business into Europe. One of the first projects was to develop a relationship with Oven Door, a Swindon based DCA subsidiary who supplied small ovens to bakeries. The sales success of Dunkin' Donuts is based upon franchises and Licenses. The difference between the two are that a franchise is granted to a single store whereas a license would cover typically a geographical area. Both allow the owner to use the name, packaging and the Dunkin' Donut concept. In return Dunkin' Donuts provided a whole range of technical, sales and marketing support including advice on the sourcing of equipment, ingredients, shop design, and quality control. Each franchisee also attends the Dunkin' Donuts University in Quincy, Massachusetts, for a six week course which covers all aspects of running a Dunkin' Donut shop from managing people to portion control. In the Dunkin' Donut stores coffee is kept no longer than 18 minutes before it is discarded and doughnuts are given a shelf life of no more than eight hours.

The growth of Dunkin' donuts outlets in the United Kingdom progressed slowly. This may have been due to the dissimilar eating habits of the British and the Americans. At the time there was a strong emphasis in the UK for healthy eating although that trend seems to have been short-lived. After the sale of Allied Domecq plc to Pernod Ricard of France, the Dunkin' Donuts business was grouped with Baksin Robbins (the American ice-cream business which Lyons had owned) to form Dunkin' Brands Inc - a necessary strategy for disposal. In 2006 Dunkin' Brands Inc was sold to the venture capitalists: Bain Capital LLC, The Carlyle Group and Thomas H. Parteners LP.

 © Peter Bird 2003

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