Click to Print

Encouraged by Solid Year, Dunkin' Aims to Conquer New Markets

February 7, 2014
URL: http://www.entrepreneur.com/article/231350

It's been a solid year for Dunkin' – and for doughnut lovers and franchisees, that means the chain could be popping up in uncharted territories in California and abroad.

Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin-Robbins, reported Thursday that revenue increased 8.5 percent and same-store sales rose 3.4 percent in 2013, exceeding analysts’ expectations. The company also added 790 net new restaurants across both brands, including 371 new Dunkin’ Donuts in the U.S.   

Perhaps most notably, 2013 was the first year that Dunkin’ sold franchise agreements in California, selling commitments to nearly 100 restaurants in parts of California in less than 12 months. In 2014, franchises are now available for purchase across the entire state. The first of these restaurants are expected to open in 2015.

Dunkin’ has yet to emerge as a major chain in the western United States. Starbucks, founded in Washington, is the dominant coffee chain on the West coast, while Dunkin’ Donuts’ core region is New England.

Related: From Chipotle to Starbucks: 6 Chains That Do Mobile Apps Right

Dunkin’ spent 2013 not only expanding west, but also overseas. Outside of the U.S., Dunkin’ added 415 new restaurants for both brands, and expects 300 to 400 new restaurants to open in 2014. With a focus on higher GDP, Europe has emerged as a key area for future growth for the company.

“Going into 2014, we look to drive growth by strengthening worldwide awareness of our two brands through global marketing initiatives, such as our recently announced partnership with Liverpool Football Club,” said CEO Nigel Travis in a statement.

As Dunkin’ expands into new territory, the established and emerging markets along the East coast, in the South and edging into the Midwest continue to be the company breadwinners.

“In 2014, we expect to established and emerging markets to each contribute between 30% and 35% of Dunkin’ U.S net developments or 60% to 70% combined,” said Dunkin’ Brand’s CFO Paul Carbone in an earnings call. “We expect that the core will contribute between 10% and 15% and the west between 15% and 20%.”

Related: The Top 10 Franchises of 2014