CNBC Interviews Dunkin's CEO
Nigel Travis, CEO of Dunkin Brands, Inc., appeared on CNBC Thursday morning to discusses the company's outlook. He brought with him a huge Christmas box that contained thousands of gift cards to give New York consumers.
The bakery chain has been on ground zero of the coffee wars, a value fight between itself, McCafe and Starbucks. When asked if the high unemployment was dampening sales because more people were not going to work, Travis didn’t share numbers but said, “Unemployment is something we are concerned about.” Sitting with a cup of Dunkin’ coffee and a donut, the CEO interjected, “We haven’t really seen a decline [in same-store sales].”
Travis declared, “We have a great relationship with our franchisees.” He added, “We push our franchisees the whole time to get their operations better and better. That’s the major job of someone like me.”
But there has been a very large group of franchisees who have not been happy with Dunkin’ Brands, and do not characterize their relationship as “a great relationship.” Franchise Attorney Robert Zarco declared a few months ago that Dunkin’ is the most litigious franchise chain in the industry, having some 350 lawsuits against its franchisees. And the new CEO has yet to meet with the largest association of its franchisees, the Dunkin’ Donut Independent Franchise Owners, an association that represents now nearly four thousand of its franchises, and growing.
When asked about why donut chain Krispy Kreme crashed in the number of their outlets, Travis speculated, “It’s very easy to grow too fast, too quickly. I’m not saying that’s what they did.” He added for Dunkin’, “We have very steady growth.”
Some have had difficulty seeing the franchisor focusing on slow and controlled development. “I wonder what they told the developers who were buying hundred store SDA’s [store development agreements] under the rapid development plans,” a franchisee queried of Blue MauMau. A number of those SDAs have aborted, most notably the Northern Texas SDA, operated under the Zale family.
- Franchise topic:
Insiders at Dunkin' Brands have reported to several blogs that Nigel Travis and company have hired spin doctors RF Binder & CEO Amy Binder in an attempt to repair the spiraling reputation of the company with franchisees, especially foreigners.
Widespread reports indicate that corporate polices in place are designed to harass and intimidate Koreans, Indians, Chinese, and other minorities who've bought Dunkin Donuts and Baskin Robbins stores the last few years. Of special concern is the damage done by DDI partner Allied Brands Ltd., the Australian franchisor of these brands who have been caught selling failed locations to Koreans along with fraudulent residency visas for Australia.
baskinrobbinsaustralia
Perhaps a better solution would be DDI taking an active concern for the franchisees in Australia instead of trying to "spin doctor" their way out of the problems. Getting franchisees profitable in Australia instead of allowing Allied Brands and CEO Lachlan McIntosh to continue their anti-franchisee campaign might prove a better strategy.
The exploiting of minorities in the sale and operation of Baskin Robbins and Dunkin' Donuts franchises will not be easily explained to the market as venture capital companies try to dump their ownership of this company on the market. Better to fix the problems.
I take it you cannot provide any substantiation of your claims?
On yesterday's Mad Money show, Cramer commented on Starbucks stock and compared the "speed of service" experience to Dunkin Donuts. Cramer hit the core Dunkin' differentiating market niche by attacking Dunkin's "speed of service" proposition. Someone like Nigel should get behind the counter to focus on getting the franchisees operations better and better... Time To Get Back to Basics. If it doesn't work, we've got Richie from Q's to crack that enforcement whip.
If Starbucks' stock price is starting to trend higher, then the "growth" trend period would be an ideal window for a competitor to begin pricing a potential stock offering during "good" coffee trend periods. Technically speaking, of course. DBI - Are you on your road show? It's going to be tougher this time around compared to your old Lehman days in 2006. The good news is your long term buddy, JP Morgan, has an affinity for "crap" management teams like yours and "Q's".
http://seekingalpha.com/article/178150-cramer-s-lightning-round-amazon-naysayers-eat-lead-12-14-09
Steve Horn and his crew destroyed all credibility and relationships between Dunkin Brands and Dunkin Donuts franchisees.
Horn is gone, but his crew is STILL THERE. Dunkin Brands still uses the Gambino Crime Family tactis unit at Gray, Plant and Mooty for their legal team. They designed the shakedown and extortion strategy with Stve Horn and are trying to get other franchisors to adopt it.
Until Travis meets with the DDIFO or some other widely representative group of franchisees (and NOT the corporate owned advisory councils) and hammers out a new contract iwht WRITTEN and ENFORCEABLE protections will he begin to repair the relationship and restore credibility between franchisor and franchisee.
He so far has spurned the rapidly growing and powerful DDIFO. I guess that matter little as long as he delivers to franchisees by protecting them from the abuses of his predecessors, one of whom is still the chairman of the board of directors.
The jury is still out. Travis has not realy done anything concrete yet (OK, the departure of Steve Horn was a big step, but it is still only one small step in a marathon). Travis is still in his hooneymoon, but it has been one year. Time to get the marraige cousneling sessions into full gear.
How much would you pay for a share in Dunkin Brands if it went public right now?
If Travis is avoiding DDIFO then that is not a good sign that he understands what ‘a great relationship’ with franchisees can do for Dunkins.
The exit of Horn was/is an opportunity to begin to rebuild relationships and DDIFO is a big part of that challenge. DDIFO would be more accommodating to genuine efforts than possibly most of the individual franchisees. Independent franchisee representative bodies are about creating efficiency in the management of a healthy and mutually beneficial relationship.
This whole approach at best suggests Travis will be taking the long road to getting franchisees to again ‘buy in’ at Dunkins to ‘get their operations better and better’.
Not developing a collaborative, efficient relationship with DDIFO suggests a lack of confidence in Dunkins’ ability to deal openly and in good faith. Any franchisor that doesn’t embrace and use the existence of a developing DDIFO is short sighted and is most likely not going to be anyone’s saviour.
Likewise; holding out for a magic recipe ‘new’ contract is a waste of time. Franchisors do not give away their protection. Franchisees should be looking for a change of culture and behaviour driven by Travis and perhaps they are not seeing it.
There is a lot of ROI at risk here and not just for franchisees so someone best be getting some momentum happening. Time IS [everyone's] money.
reach out to DDIFO. It has a professional board and president, not a franchisee board or a franchisee president. They will keep emotions about what Steve Horn did to franchisees out of it.
Things just might turn to sunshine in shore order. They certainly can't get worse, can they?
Stay tuned.
...for one moment. Travis has ABSOLUTELY met with insiders of the DDIFA. As has been previously mentioned on multiple posts there is a large contingency of leaders and outspoken DDIFA members who "secretly" advise the company on what takes place within the DDIFA. These "inside rats" expect to avoid audits, gain favor, and generally reserve preference as it relates to anything concerning their agreements.
All one needs to do is look towards Franchisees in the Northern Virginia/Maryland markets and follow the trail of duplicity to determine who at least "some" of these moles are.
Always remember...She/He that squeaks loudest is probably double dipping the grease...from both sides.
"He that squeaks loudest is probably double dipping the grease...from both sides." - Insightful
Dear Insightful,
That makes absolutely no sense, and gives no insight at all. Try this: There's no breach of peace, where there is plenty of grease.
Virginia zees will squeal, if Canton gives a better deal.
If the glove don't fit, you must acquit.
Never did I realize that we at BMM are surrounded by such talent...between you and Dadu I'm awe struck!
Masashigee very wise.... I to have DD's. Want to play "Tune In Tokyo."
Mr. Donuts has very big Cruller Stick to play mortgage back game Internationally. Sales growth on US F'ee fool. Don't you know, we are a large multinational built off of f'ee ad fund float. We went to brewery to hide Mr. J Lyons & Co. Don't you know who I am today - DBI?
Sales growth for me not for you... Big Cruller Stick = Good TOCAM TOCI (It's Gujarati for Debauchery)
Great Brand, Great Relationships, and the Great Hype in Brouhaha land is message I heard.
Wait a minute.. there was a mistrial.. the Brouhaha is brewing... Look at his face..