As Dunkin' Donuts gears up to sell K-Cups in more locations than ever before, franchisees are getting a slice of the profits.
On Thursday, Dunkin' Brands announced the launch of a program that allows qualified franchisees to evenly split net profits with Dunkin' from the sale of K-Cups and packaged coffee at non-restaurant locations. This program comes at the same time as the announcement that Dunkin' Donuts is making Dunkin' K-Cups available at grocery stores, retail outlets and online for the first time.
Prior to this announcement, Dunkin' K-Cups have only been available in Dunkin' Donuts shops in the U.S. However, now Dunkin' is expanding partnerships with Smucker and Keurig to sell the K-cups in thousands of new retail locations. Under the deal, Smucker will exclusively distribute and market Dunkin' K-Cups to grocery chains and other mass merchandisers, and Keurig will do the same at specialty stores and office superstores.
The expanded retail program will begin in mid-2015. In the spring, Dunkin' will additionally begin selling K-Cups online, including at Dunkin', Smucker and Keurig's websites.
"When we introduced Dunkin' K-Cup® packs as a retail item in our restaurants in 2011, we said we would only consider allowing this product to be sold at other retailers if we could do so in a way that benefitted both us and our franchisees," Dunkin' Brands CEO Nigel Travis said in a statement. "In keeping with that commitment, I am delighted to announce that we have been able to reach a profit-sharing agreement with our domestic Dunkin' Donuts franchisees that we believe will drive incremental, profitable growth for both Dunkin' Brands and our franchisees."