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Dunkin' President Unexpectedly Speaks at Independent Franchisee Association Meeting
BELLINGHAM, Mass. (Blue MauMau) - After Dunkin Donuts declared ten days ago that it has no ties with the DD Independent Franchise Owners, Inc. (DDIFO), the firm has reversed track. Will Kussell, Dunkin' Donuts Brand Officer and President, and James Allen, Brand Advisory Council Franchisee Co-Chair, not only attended DDIFO's meeting last Thursday, but Mr. Kussell also delivered a crucial message to members. He said that a breakfast war was now being waged in New England about coffee. Kussell declared, “The war of our lives is about coffee. McDonald’s and Starbucks are going straight on to take us out.”
In another surprise statement, Kussell said that Dunkin’ Brands would have no more strategic partners for at least three years. There has been a significant amount of controversy regarding Dunkin' Brands partnership agreements with Sara Lee, Proctor & Gamble and Hess gas stations, allowing them to place Dunkin's number one product, coffee, into grocery stores, gas stations, kiosks, private cafeterias and other retail outlets. DDIFO members have been critical of these alliances stating that they will ultimately devalue the iconic Dunkin' coffee brand.
Although Mark Dubinsky, President of DDIFO, confirmed that Kussell and Allen attended the meeting, he would not confirm the content of what was said by Kussell. But he did state, "Clearly, their willingness to do so represents a renewed possibility for the ongoing improvement of our relationship."
Regarding their meeting in general, Dubinsky expressed that he was very satisfied by the high level of attendance and keen level of engagement demonstrated by their members throughout their meeting. "Today, more than ever before, our members revealed a rare sense of unity and purpose, he said. "We are now stronger and more resolute than any other time in our 19-year history."
Dubinsky said there was also a great show of support for their new professional board of directors, as well as a deep appreciation for all of the contributions made by all of the former directors throughout their history. "Lastly," he added, "several members told me that this was a very successful meeting in terms of the quality of communication, education, and advocacy for our members' long-term business interests."
Related articles:
- Dunkin' Brand's Franchisees Serve Up Brand New Professional Board of Directors
- Dunkin' Responds with No Comment on How DDIFO Conducts Its Affairs
- Dunkin' Franchisee Association Makes Unique Decision in Restructuring Board
Other articles:
Re: Dunkin' President Unexpectedly Speaks at Independent Franchi
Talk is cheap. Action counts.
Mr. Kussell, how can you expect to unite the troops to beat our enemies when the army is damned-near demoralized. You gave us a new toasted sandwich station that costs us far too much money to install and to operate, a new Hess deal to compete with us, P & G bulk coffee in alternative distribution channels to compete with us, took away our ability to vote at advisory council meetings, litigate against us to steal our livelihoods and disenfranchise us, and now offer us a new franchise agreement that is unworkable on so many levels. To add insult to injury, you say that this new F/A is good for us! I repeat: Talk is cheap. Action counts.
Now you want to be the noble general to lead us into battle against our coffee competitors? Here is some advise for you Mr. Kussell: Don't give us bullets for our proverbial guns -- We might be tempted to take aim at our real enemy! Do I sound upset? You bet I am! The value of my franchises is now millions less today than when Jon Luther took over as CEO in 2003. You guys are doing a great job devaluing my franchises.
Talk is cheap. Action counts.
PS: I would like to sign my name to this email but I know that I can't. You would fabricate litigation against me in about 20 minutes for my telling the world the truth about how good a job you are doing for your private equity owners and how bad a job you are doing for your franchisees.
Re: Talk is cheap. Action counts.
What items in the new franchise agreement are you upset about?
Do you have any upcoming renewals? If yes when are they?
Hess already sells coffee to its customers and now it would be Dunkin Coffee how exactly does this event hurt you?
P&G already distributes coffee in supermarkets where people would now get to choose Dunkin amongst Starbucks, Green Mountain and other brands and this exposure to Dunkin Coffee hurts you in what way?
Do you think that Dunkin has a right to do what they want with their brand?
The Truth Shall Set You Free!
TIF
Moved
This comment has been moved here.
How does Hess hurt Zees? Let me count the ways
TIF said: "Hess already sells coffee to its customers and now it would be Dunkin Coffee how exactly does this event hurt you?"
Let's first understand that Hess is a cut rate, low rent dirty gas station operator. It is not capable of running a sanitary food service based on observations of what it does already to food. Stale donuts and old coffee in a dirty atmosphere hurts a Zee that operates to a high standard. That Zee gets painted with the dirty Hess brush that soils the brand, not tom mention that the Zee could have sold that cup to the same person who instad got it at a Hess. Don't you think that hurts the Zee? The Zee would rather have Hess sell someone elese's cut rate coffee in its crappy station and look better by comparison. Millions are spent every year by Dunkin trying to differentiate tself from exactly these type of places and trying to urge customers to instead go to Dunkin.
If a Zee bought a territory and is spending 7 figures to build full shops and comply with all of the Zor's rules and caryry al the marginal products, he is hurt by a Hess selling the most profitable core Dunkin products for a fraction of the fraction of the cost without having to comply with all of the Zor's rules. Don't you think that hurts the Zee?
If it didn't hurt the Zee, why did the Zor promise not to do it again?
Of curse, you wold say that the franchise agreement allowed the Zor to do this to the Zee, so he should not complain now that it has happeed. This is of course why the Zee wants the franchise agreement that just came out to be scrapped an won't sign it.
Whether or ot there is a renewal is not relevant. The big existing Zees are the ones that are building in new territories or are partnering with new developers. They are also responsible for almost ALL of the entire system's revenues. If they don't like the agreement, that matters. The march to go national will mire in the mud until it gets fixed, so it will get fixed.
Dunkin' Donuts brand image
Guest makes a very good point about the interplay between operational standards, brand image, and franchisee equity.
The observations about Hess and other alternate distribution channels are not emotional rants but legitimate concerns (and accurate statements, in my opinion) which affect both zor and zee...but disproportionately the zee.
As to TiF "take it or leave it" approach, this may be true for incoming zees. But it is emphatically not the case for the existing Dunkin franchisees who are facing dimunition of equity by virtue of public response to the sub-standard presentation standards of their food in the gasoline stations.
Significantly, the Guest poster did not complain about alternate distribution channels so much as the failure of those alternate channels to adhere to the quality standards of the main distribution channel. We heard much the same analysis in the case of Krispy Kreme a few years ago, and it would appear that Dunkin Brands has seen some wisdom in the concerns such as Guest espoused.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Indeed, Mr. Steinberg
Value of each franchsiee's shop is really the most important issue to both the franchisee and the franchisor bent on rapid expansion.
Anything that dilutes that value is not good for anyone but competitors. Franchisees committed to the brand SHOULD be "bitching and moaning" and the brand is right to take notice and act to fix the problem.
Committed franchisees selling their shops isn't good for the franchisor, TIF. You want these people in your system, even if they are a pain in the neck at times.
Starbucks Dilution
Starbucks doesn't sell coffee; it sells an atmosphere in which you the lowly consumer can feel wonderful engaging in some strange language to order.
So, yes, Starbucks in supermarkets did damage their brand. And no, even though they own it, the shareholders of the public company have the right to fire the directors who signed off on this idea.
Michael Webster PhD LLB
Franchise News
Not Related to the Article
This comment has been moved here.
This news article is about Kussell visiting DDIFO and comments should be about that.
Mr. Blue MauMau
Moderator
Nice first step.
Mr. Kussell: Nice first step.
Now you, as the franchisor, should consider officially recognizing the DDIFO and find a way to engage / align with each other to accelerate the growth of your system.
Kudos to Kussell
DDIFO members appreciated Mr. Kussel's direct rallying call to our shared enterprise. It was a breath of fresh air that we hope will continue to blow through our ranks.
Mr. Kussell did a great job of inoring the backround noise of "official" versus "unoffical" and "not recognized" B.S. to cut directly to the matters that Dunkin' Donuts franchisees care most about. He showed gravitas and leadership, which is exactly what Dunkin' Dunuts franchisees want from management in these difficult economic times.
Members await the re-negotiated terms of the new franchise agreement with optimism.
Congratulations, Mr.Kussell, on a strong first step to market domination.
Did you see the new F/A?
Did you see the new Dunkin' Donuts F/A that was released last week? It is materially the same crap that we have been objecting to for weeks. They gave us next to nothing. I think our franchiser wants to turn is into Quiznos!
My shops will be on the market as soon as values come close to former levels. I fear the glory days of our iconic brand are now sadly behind us, at least in terms of getting a reasonable ROI.
Why are there no company owned DD shops? Because the brand can't run them profitably and they can't take the scrutiny of the franchisees seeing that they can't do what we can do!
Kudos to zees
DD has a solid franchisee association. Not many systems do.
Kudos to the zees.
DD Coffee
More of this full open truthful exhanges are going to be needed if DD is going to beat Starbucks and McDonalds' on DD's home turf.
It would have been nice to hear that DD and the Association had found some common measure of the effectiveness of co-branding.
Michael Webster PhD LLB
Franchise News
A better franchise agreement is most important first
DD needs to give its Zees a better agreement if it wants to beat Starbucks and McDonalds.
Starbucks doesn't have franchisees and does not have the issue of an unfair contract with its shops. McDonalds franchisees don't need to care what is in their contracts because their Zor doesn't sue them by the hundreds.
Dunkin has created its own Zee probolem with uncontrolled lawsuits filed against Zees. Dunkin Zor has filed many multiples more lawsuits against ots own Zees than McDonalds or any other Zor.
It is no wonder that Dunkin Zees are concerned about what their franchise agreements say. That needs to get done because the Zees need to not worry about fighting their own Zor to successfully fight the competition!!!!