Dunkin' Brands Group, Inc., together with its subsidiaries, develops, franchises, and licenses quick service restaurants (QSRs) worldwide that serve hot and cold coffee and baked goods, as well as hard serve ice cream.
The company franchises restaurants under its Dunkin’ Donuts and Baskin-Robbins brands. It has approximately 20,900 points of distribution in approximately 60 countries worldwide. As of December 29, 2018, there were 12,871 Dunkin’ points of distribution, of which 9,419 were in the...
Dunkin' Brands Group, Inc., together with its subsidiaries, develops, franchises, and licenses quick service restaurants (QSRs) worldwide that serve hot and cold coffee and baked goods, as well as hard serve ice cream.
The company franchises restaurants under its Dunkin’ Donuts and Baskin-Robbins brands. It has approximately 20,900 points of distribution in approximately 60 countries worldwide. As of December 29, 2018, there were 12,871 Dunkin’ points of distribution, of which 9,419 were in the U.S. and 3,452 were international, and 8,041 Baskin-Robbins points of distribution, of which 5,491 were international and 2,550 were in the U.S.
Brands
Dunkin’ Donuts-U.S.
Dunkin’ Donuts operates as a major U.S. QSR concept and operates in the QSR in donut and bagel categories. Dunkin’ Donuts also operates as a national QSR operator for breakfast sandwich servings. Dunkin’ Donuts operates as a coffee and beverage-based concept and as a national QSR operator that engages in the hot regular/decaf/flavored coffee category and the iced regular/decaf/flavored coffee category. In addition, the company has alternative points of distribution, such as full-or self-service kiosks in offices, hospitals, colleges, airports, grocery stores, wholesale clubs, and other smaller-footprint properties.
Baskin-Robbins-U.S.
Baskin-Robbins operates as a QSR chain in the U.S. for servings of hard-serve ice cream and develops and sells a range of frozen ice cream treats, such as cones, cakes, sundaes, and frozen beverages. Baskin-Robbins’ ‘31 flavors’ offers its consumers a different flavor for each day of the month.
International Operations
The company’s international business is primarily conducted through joint ventures and country or territorial license arrangements with ‘master franchisees’, who both operate and sub-franchise the brand within their licensed areas. In certain markets, it is migrating to a model with multiple franchisees in one country, including markets in the United Kingdom, Germany, China, and Mexico. As of December 29, 2018, Dunkin’ Donuts had 3,452 international points of distribution in 43 countries (excluding the U.S.). As of December 29, 2018, Baskin-Robbins had 5,491 international points of distribution in 53 countries (excluding the U.S.).
The company’s international business is organized by brand and by country and/or region. Operations are primarily conducted through master franchise agreements with local operators. The company utilizes a multi-franchise system in certain markets, including the United Kingdom, Germany, China and Mexico. In addition, the company has a joint venture with a local, publicly-traded company for the Baskin-Robbins brand in Japan, and joint ventures with local companies in Australia for the Baskin-Robbins brand and in South Korea for both the Dunkin’ Donuts and Baskin-Robbins brands.
South Korea: In South Korea, the company conducts business through a 33.3% ownership stake in a combination Dunkin’ Donuts brand/Baskin-Robbins brand joint venture, with South Korean shareholders owning the remaining 66.7% of the joint venture. The joint venture acts as the master franchisee for South Korea, sub-franchising the Dunkin’ Donuts and Baskin-Robbins brands to franchisees. The joint venture also manufactures and supplies restaurants located in South Korea with ice cream, donuts, and coffee products.
Japan: The company conducts business in Japan through a 43.3% ownership stake in a Baskin-Robbins brand joint venture. The company’s partner also owns a 43.3% interest in the joint venture, with the remaining 13.4% owned by public shareholders. The joint venture primarily manufactures and sells ice cream to restaurants in Japan and acts as master franchisee for the country.
The Middle East: The company conducts operations in the Middle East through master franchise arrangements.
Licensing
The company derives licensing revenue from agreements with Dean Foods Co. for domestic ice cream sales, with The J.M. Smucker Co. (Smuckers) for the sale of packaged coffee in certain retail outlets (primarily grocery retail), with Keurig Green Mountain, Inc. and Smuckers for sale of Dunkin’ K-Cup pods in certain retail outlets (primarily grocery retail), and with The Coca-Cola Company for the sale of Dunkin' Donuts branded ready-to-drink bottled iced coffee in certain retail outlets (primarily gas and convenience retail), as well as from other licensees.
Seasonality
The company’s revenues are subject to fluctuations based on seasonality, primarily with respect to Baskin-Robbins. The ice cream industry experiences an increase during the spring and summer months, whereas Dunkin’ Donuts hot beverage sales increase during the fall and winter months and iced beverage sales increase during the spring and summer months.
Regulatory Matters
The company and its franchisees are subject to the Fair Labor Standards Act and various other laws governing such matters as minimum wage requirements, overtime and other working conditions, and citizenship requirements. Its franchising activities are subject to the rules and regulations of the Federal Trade Commission and various state laws regulating the offer and sale of franchises.
Competition
The company’s competitors include 7-Eleven, Burger King, Cold Stone Creamery, Cumberland Farms, Dairy Queen, McDonald’s, Panera Bread, Quick Trip, Starbucks, Subway, Taco Bell, Tim Hortons, WaWa, and Wendy’s, among others.
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