DDIFO Calls for Greater Controls over Dunkin' Franchisee Ad Fund Following Indictment

Bellingham, Mass. (Blue MauMau) - After yesterday's news on Blue MauMau regarding the federal indictment of a former executive of Dunkin' Brands, the DD Independent Franchise Owners is now releasing an official response calling for the institution of greater controls over the franchisee ad fund. It will include direct franchisee oversight and regular audits by an independent CPA and will be made available to all franchisees.

Wednesday's news reports stated that a former executive with Dunkin’ Brands has been indicted by the U.S. Attorney’s office on charges of mail fraud in connection with an alleged kickback scheme involving ad fund dollars. The U.S. Attorney’s case, filed on August 31, 2008, alleges Carolyn Kravetz, the former communications director for Dunkin’ Brands steered $400,000 in business to Boris Levitin, owner Luminore, of a graphic design company called in exchange for a 50% kickback. The funds Dunkin’ Brands paid to Luminore came from the ad fund, which is financed by contributions from all Dunkin’ Donuts franchisees.

Kevin McCarthy, Chairman of the Board of Directors for DDIFO, points out that this case highlights the fact that no entity can realistically be expected to always “obey all laws” even though that language is currently used by Dunkin’ Brands as justification for the termination of Dunkin’ Brands’ franchise agreements. McCarthy says, “If nothing else, this federal case shows that not even Dunkin’ Brands can comply with its own ‘obey all laws’ clause.

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Indictment of Dunkin' Executive Gives New Meaning to 'Obey All Laws' Provision