How Dunkin' Pivoted to Serve the Home-Office Crowd
The #2 company on our Franchise 500 list closed some stores during the pandemic, but new stores are seeing higher sales.
"Great coffee, fast.” That’s the tagline Dunkin’ — the franchise formerly known as Dunkin’ Donuts — has pushed to highlight its shift toward beverage service. The message resonated: In 2019, revenue hit $646 million, and last year Dunkin’ held the no. 1 spot on our Franchise 500 list.
But 2020 shifted priorities. Customers still wanted great coffee, but with a side of reassurance. “The two biggest things our customers are asking for are: Make me feel safe, and give me access to your brand on my terms,” says Scott Murphy, president of Dunkin’ Americas.
On both fronts, Dunkin’ has been able to accommodate. Through mobile ordering and delivery options put into play prior to the pandemic, the franchise survived a year that locked its usual work-commute crowd in home-based offices. Within weeks of the pandemic, Dunkin’ made curbside pickup available at 1,400 U.S. stores and, in a bid for new customers, introduced a lineup of trendy beverages: matcha and oat-milk lattes, plus Dunkin’ Refreshers, made with iced green tea. “Dunkin’ Refreshers was our most successful new offering since cold brew was introduced four years ago,” says Murphy, noting a surge of young, female patrons.
Yes, Dunkin’ took a sales hit and shuttered 800 locations (450 of which were Speedway self-serve kiosks). But it managed to keep more than 90 percent of locations open throughout the pandemic, and sales are recovering. In a sign of change to come, Dunkin’ Brands announced in October that it would go private in a sale to Inspire Brands, owner of Arby’s, for $11.3 billion. (In a November interview, Murphy was not able to comment on the in-process transaction.)
Despite the tough year,Murphy sees signs for optimism. “We are focused on quality over quantity,” he says. “Our franchisees are opening fewer units because of COVID, but the ones they are opening are generating higher sales per restaurant.”