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Date Created: 09/23/15
Anson Worrell Professor O Donnell Business 102004 February 14 2010 Franchise Pro le for Dunkin Donuts Dunkin Donuts originated out of an Industrial Luncheon Service which ve thousand dollars was invested by Bill Rosenberg Out of that investment Bill Rosenberg changed it into a local shop named Open Kettle that later turned into Dunkin Donuts After the name change Bill Rosenberg franchised several Dunkin Donut shops by 1955 The rst Dunkin Donuts shop to open was in Quincy Massachusetts The name change to Dunkin Donuts occurred in 1950 The advantages of parent business franchising its operations are better management training and support This helps the service and operations proceed smoother and more ef ciently Brandname appeal is another advantage of parent business franchising because the parent already has the popularity and con dence of the public so the new business will thrive off that reputation making it successful and productive National advertising programs are better and an advantage compared to the new franchise trying to advertise their product on their own The reason why is because advertising costs cut into their budget and operation that limit the new franchises capacity Those are a few of the advantages of a parent business franchising its operations The disadvantages of having the parent business franchising its operations are fees and shared pro t with the parent business This is a disadvantage because the new companies pro ts are cut down by a decided percentage Another disadvantage is required adherence to standardized operations meaning no creativity is allowed within that store that suits the consumers of that region Lastly decisions have to be talked about with the parent business before execution Dunkin Donuts has a wide variety of stores and locations targeting everything from local nationally to global Globally they have 2440 stores that are in 31 countries outside the borders of the United States Dunkin has bee global for over 27 years now Several places they are located globally are Bulgaria Korea Spain and Bahamas Dunkin Donuts advertises that you can get delicious coffee and donuts at any of their stores around the globe That says a lot about their stores and quality globally Dunkin Donuts target market within the United States nationally and locally is the working class in from the ages from 1860 years old Typically the working class people they are targeting are people making 40000 to 100000 per year Another target market is the new generation of kids because they like Dunkin Donuts mainly because of its popular name This is the best choice because due to experience they know people like their product and to have success over seas proves the fact even more that this strategy works well It expands their opportunities so much that advertising can be minimized due to its excellent reputation and popularity The advertising fee is a at rate of 5 for Dunkin Donuts Dunkin Donuts utilizes three types of advertisement that is outdoor newspaper and radio Dunkin Donuts spends the most of their advertisement money in newspapers and that sum amounts to 3023380 Dunkin Donuts puts inserts into local newspapers to reach their target market Another facet to their newspaper advertisements was that they only inserted colorful on Sunday only that caught more potential customers A vital part to their success is putting their adds into big newspapers like USA The second greatest fee for advertising for Dunkin Donuts is Radio which is a bit smaller but still 2361665 Their prime times for their radio commercial to be on was in the morning and evening for 1530 seconds that concisely told its listeners what they needed to know about themselves The reason why the commercials were placed in the morning and night was to cause people driving to work or home to stop by a local shop to get a warm cup of coffee and delicious donut The last and smallest of advertising for Dunkin Donuts is outdoor advertising Outdoor advertising would be billboards with catchy phrases to catch people driving places and bank on impulses Some of the locations the billboards will be placed are in California Colorado and Arizona Dunkin Donuts wanted to be different and more effective than putting their advertisements next to others This advertising costs Dunkin Donuts 1000000 yearly Dunkin Donuts receives its procurements from their Northeast Distribution Center Inc which is located at Dunkin Donuts Northeast Distribution Center Inc in Massachusetts The address for this distribution center is 150 Depot St Bellingham MA 02019 MA Tel 5085532600 Fax 5084223866 This is where Dunkin Donuts gets most of its supplies for cooking and baking The Northeast Distribution Center is one of a few distribution centers serving Dunkin39 Donuts inthe country The company supplies stores in New England and New York with ingredients food products and equipment 250 Dunkin Donuts franchises developed this distribution center in 1982 The Officers of the distribution center is COO David Liguori C F0 I K ev in C ardu 0 V P Marketing and Brand Relations Patty Healy The advantages to the procurement process is that it eliminates unwanted costs has better product specification quicker methods of sourcing and contracting easier transaction processes and lastly better monitoring and reporting The possible disadvantages are risk of excessively close relationshipsimpropriety that hinder the company contractual arrangements can be very in exible and potential for increase in costs of the service is signi cant because of how well the product and company is doing The start up costs and financial requirements are for total investment is 255700 l100000 The initial franchise fee is 4000080000 and the royalty fee that is ongoing is 59 In addition to that there are several steps to acquire a franchise which comprises of six steps Step One of the process to start a Dunkin Donuts is to decide where in the United States you would like to have one that is agreed upon mutually Step two to be considered would be the potential franchisee would complete an application Complete and submit it for a Dunkin Donuts franchise Step three is certain requirements are met will be given a Franchise Disclosure Document FDD stating all the necessary things to the future franchisee The purpose of the Franchise Disclosure Document FDD is to show the public what the franchise is all about and its dealings Step Four you as the franchisee will be interviewed by a Franchising Manager FM In the meeting you will be able to ask questions concerning the operations of the franchise For example What problems have occurred and how did the franchisor deal with them How much help promoting the franchise39s product or service does the franchisor provide What are the franchise39s sales patterns for a typical day week and month to explore development opportunities Step five is a verification of credit and background You should contact peer franchises that have had experiences with Dunkin Donuts and ask questions In the Franchise Disclosure Document there will be a complete list of franchisees Step six is opportunities will be discussed on the developing area of your choice then after agreement sign the development agreement SDA for the store To purchase an existing Dunkin Donuts it is required you have already had Dunkin Donuts39 Training before purchasing your restaurant and signing Franchise Agreement Parent business assisting in nancing the new franchise Marketing Support CoOp Advertising No National Advertising No Regional Advertising No Local Advertising No Marketing Materials None Speci ed Additional Services None Speci ed Other Marketing Support None Speci ed Ongoing Support Central Data Processing Not Applicable Central Purchasing Included in Fees Field Operation Evaluation Included in Fees Field Training Not Applicable Initial Store Opening Included in Fees Inventory Control Not Applicable Franchisee Newsletter Included in Fees Regional or National Meetings Included in Fees 800 Telephone Hotline Included in Fees For a specific break even point to be reached there needs to be anywhere from 35000 50000 people to go to one Dunkin Donuts Break even calculation is Break Even Fixed Cost Unit Price Variable Unit C030 Does this company provide corporate training for its franchisees If so what skills are they trying to develop in their franchise owners and their employees Support and Training provided by the parent company International Franchise Association Yes Canadian Franchise Association No Franchisee AssociationMember Yes Member Size of Corporate Staff NA Site Selection Assistance Not Applicable Lease Negotiation Assistance Yes Financial Assistance Yes Direct They are trying to develop a good human resource center that can communicate globally as well as nationally and locally Locally they are just training each employee for standard operations and good management The advantages of having corporate training is that its cheaper better standards and easier The disadvantages are that it might not suit the local area too standard and not as often as is needed for hiring new employees Works Cited https www dunkindonuts com aboutus company Founder 21st hit r 39 39 nhmlt J m r 39 f dunkindnmm htm httpwww 39 com 3 39 39 39 39 indnm 2823040htm1 http www0ppapers com essaVs DunkinDonutsC0mpetitiveAnalysis 132827 httpswww 39 39 39 aboutuscompanVr rlnhnl mm 39n n quot r J nhnm onm 0dr quot 39 p but quot I vhtm httpwwwanswem 39 dulud0nutsn01 theast quot ibut39 center httpwww dunk39 39 39 39 a utuq franchiqe 39 39 get Mquotted html httpWWW 39 39 39 com int franchi e DUNKlNDONUTShtm httpWWWWOI39 m 39 I 39 nm E 39 39 DunkjnDnnmq html httpWWW 39 J39 I 39 mm InsightViewpnum PrvletFilenamePublishedEmeraldFullT extArticleArticlesO701000209htm1 Key Take Away What I took away from this assignment was a general understanding of franchising small businesses sector in the economy It also helped and bettered my research skills It showed the importance and signi cance small businesses have in our economy It helped me weigh the opportunity of opening a small business based on the risks and bene ts Overall this assignment helped for the long run in business because I will be able to start my own small business and develop it into something bigger over time
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