Page 64 - Entrepreneur - USA (January - February 2020)

THE FRANCHISE
Dunkin’
1
STARTED FRANCHISING —
How Dunkin’ dropped
the word Donuts,
sold more doughnuts
anyway, and rose to #1.
BY MAGGIE GINSBERG
he brand once known
as Dunkin’ Donuts
T turns 70 this year.
The first 68 are inextricable
from the word Donuts. They
were a beloved treat for founder
Bill Rosenberg, a working-class
eighth-grade dropout in
Depression-era Boston. By the
time he died in 2002, he’d built
his brand into 5,000 stores in
38 countries.
62 / ENTREPRENEUR.COM / January-February 2020
1955 TOTAL UNITS
— —
12,957
But the most recent 20 years
of history have been an evo-
lution toward something big-
ger. The brand evolved into the
largest coffee-and-baked-goods
chain in the world, as well as
one of the fastest- growing in
the U.S. Of its 13,000 stores,
about 9,500 are in the U.S., and
it plans to double that number
over the next 20 years. It might
even pull it off, with rising same- be limited by its doughnut-
store sales now driving $1.3 bil-
lion in hot and cold drinks.
Today the company also sells
bagels and sandwiches and
low-calorie wraps, and cus-
tomers can purchase creamy,
$395.5K–$1.6M
COST TO OPEN
nitrogen-infused cold brew
from tap handles. The foam
cups it used for decades are
actively being phased out in
favor of a double-walled paper
cup that won’t be too hot to the
touch. Using the company’s DD
Perks app, customers can even
order on their phones before
leaving the house. So given all
this, the brand didn’t want to
focused name. In September
2018, it announced that it was
changing its name to simply
Dunkin’—a change as big as
when Kentucky Fried Chicken
eliminated Kentucky, Fried,
TOTAL UNITS NUMBERS AND COST TO OPEN AMOUNTS AS OF JULY 31, 2019.
and Chicken from its name.
Dunkin’ Donuts, minus the
Donuts. It was once unthink-
able. But the weirdest thing
has happened: Doughnut sales
grew. It’s happening at the
nearly 500 U.S. stores that have
adopted a store redesign. It
turns out people became more
impulsive when the dough-
nuts jumped from behind the
counter to a front-facing pastry
case by checkout. It didn’t mat-
ter if the word was in the title.
Now, worldwide, Dunkin’ is
moving two billion doughnuts a
year—in 70 varieties, no less.
That’s just how powerful this
brand has become. The com-
pany debuted at #17 on our
first-ever Franchise 500 list in
1980, and it’s ranked every year
since. Seventeen times, it broke
the top 10, including five years
consecutively now. And it has
ranked #2 three times in three
different decades.
This year, finally, for the first
time ever, Dunkin’ is #1. It’s the
just result for a brand that has
innovated through the decades
while never losing sight of what
makes it so strong.
BILL ROSENBERG always had a
hustle. He was born in June
1916 in Boston’s Dorchester
neighborhood, and family leg-
end has it that he was selling ice
from his tricycle at 3 years old.
He had a watermelon stand at
age 9, bought and sold ice
cream for a markup by age 11,
and dropped out of school at 14
to work full-time and support
his family. Even then,
Rosenberg had a soft spot for
doughnuts.
In his 2001 memoir, Time to
Make the Donuts, Rosenberg PHOTOGR APHS COURTESY OF DUNKIN’
reflects on visits to a diner in
Boston, where they sold the
“biggest nickel jelly doughnuts
you ever saw.” And at home, his
mom would fry hot-cake