Conflict Brewing Between Dunkin' Donuts and Franchise Owners

BOSTON, Feb. 14 /BlueMauMau PR -- An overwhelming majority of Dunkin' Donuts franchise owners in New England and New York opposes new partnerships between Dunkin' Brands, Sara Lee Foods, Procter & Gamble and Hess gas stations; the majority also believes these actions will ultimately devalue the iconic coffee brand.

The DD Independent Franchise Owners asked franchisees to express their opinions about partnerships allowing Sara Lee's food services division and Hess gas stations to sell Dunkin' Donuts coffee. 98% of franchise owners who participated in this survey said they oppose the Sara Lee partnership; 97% oppose the Hess partnership and; 98% said these deals will negatively impact their businesses and the Dunkin' Donuts brand over the long run.

The survey was conducted in January. Respondents are franchise owners representing more than one thousand shops,

"There is little doubt in my mind that the Dunkin' Brands Management Team either failed to understand or did not much care about DDIFO member sentiment as to the Hess and Sara Lee distribution deals," said Mark Dubinsky, President of the DDIFO.

Dunkin' Donuts shops are 100% franchise owned. Despite the company's expansion into new U.S. markets and international markets, 99% of survey respondents said their cash flow from operations has been declining for some time and is showing little sign of improving any time soon.

Last year Dunkin' Brands announced its partnership with P&G to sell packaged coffee in supermarkets, drug stores and off-price retailers. Those 12-ounce packages of coffee compete directly with the 16-ounce packages sold at Dunkin' Donuts shops. To date, franchisees have received no financial benefit from P&G sales. 59% of survey respondents said the P&G deal devalues their franchise.

"The company believes these partnerships are a strong way to build the brand and that may be the case," Dubinsky said. "But, in markets where there is already a strong brand presence, like the northeast, it can have a negative impact."

The DDIFO survey was conducted in January 2008 through Zoomerang, a division of Market Tools, Inc.

About the DDIFO

Created in 1989, the DDIFO is the largest, independent organization dedicated to protecting the interests of Dunkin' Donuts franchise owners. The DDIFO serves to communicate, educate and advocate on behalf of members in 12 states. The DDIFO is a founding member of the Washington, D.C. based Coalition of Franchisee Associations.

Learn more at http://www.ddifo.org.

DDIFO, Inc.