Dunkin' Responds to Allegations of Discrimination with Threats of Further Lawsuits

Dunkin' Frequently Imposes Penalties to Deter Illegal Behavior

WHITE PLAINS, N.Y. (Blue MauMau) - In a three-page memorandum sent out last Friday to system franchisees, Dunkin' Brands' president and executive VP stated that given the outrageous and terribly misguided accusations of racial discrimination, the company has now decided to respond. They preferenced their position by stating, "In the past, there have been instances where unfounded allegations were made against Dunkin’ Brands from various franchisees that could have warranted a corporate response from our perspective, but because we are steadfastly committed to strengthening our partnership, we chose the high road and took a pass."

The memo also declares it has filed a lawsuit against a franchisee in the Hudson Valley area of New York seeking termination. Dunkin' intends to prove "extensive illegal conduct including falsified business records, false identification and a scheme to deny employees the overtime to which they were entitled." Many franchisees have claimed that the company has discriminated against "brown-skinned" minorities to deprive them of their franchise.

In explaining their company position, they also state that in a termination case against an operator they never try to remove him from the system without court approval. If the franchisee does not agree with the stated grounds for termination, then the case goes forward. The memo says that most franchisees leave the system before the court decides the case because they know what the facts are and how it is going to be decided. But to the surprise of some attorneys the memo also declares, "We usually allow those franchisees to sell their stores, although we frequently impose penalties to deter other people from engaging in the same, illegal behavior." One said, "Imposing penalties and other punishments is something you usually see in the criminal context, not in civil contract litigation."

In closing, Dunkin' states that it is important for franchisees to note that moving forward Dunkin' Brands will not "sit idly as franchisees, organizations and other third-party entities continue to promote and release unfounded and outrageous statements (and allegations) to the media that could be detrimental to the Dunkin' Donuts brand that we have worked so hard to build, and are so proud of. Our response will be swift, factual and firm." As one attorney put it, "If that was a threat from a government entity, that would be outrageous."