Franchisees: No Worries On Dunkin' Donuts' IPO
Photo/Christina H. Davis
BAKED WITH OPTIMISM: Rob Branca, who owns 59 Dunkin' Donuts locations through his company Branded Realty LLC, stands in the backroom baking operation of his Shrewsbury Street location in Worcester. Branca says Dunkin' Donuts IPO should be a positive for franchisees.
Like most Dunkin’ brands franchise owners, Rob Branca had been expecting to hear about an initial public offering from the company for the past several years.
“It’s no surprise to any of us,” said Branca, whose Worcester company, Branded Realty LLC, owns 59 Dunkin’ Donuts locations in four states. “It probably would have happened sooner if the economy hadn’t gone so poorly.”
So far, Branca and other franchisees seem pleased with what the company’s revealed about the IPO.
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Earlier this month, the company, which owns the Dunkin’ Donuts and Baskin-Robbins brands, announced the $400-million offering, saying it plans to have its stock listed on the Nasdaq Global Select Market under the symbol DNKN. The company hasn’t announced a date for the IPO, but it will probably occur over the summer.
Jim Coen, president of Bellingham-based Dunkin’ Donuts Independent Franchise Owners Inc., said that from his members’ perspective the most important thing about what the company has said so far is the things it won’t change.
Coen said franchisees breathed a sigh of relief to see that Nigel Travis, who became the company’s president and CEO in 2009, has signed on for five more years on the job. While there had been tension between franchise owners and previous corporate leaders, Coen said his members have found the company easy to work with under Travis.
Other top executives will also remain, and since the IPO represents less than 20 percent of the company’s value, Branca said franchisees aren’t worried about any big shake-ups.
Branca said another source of security for franchise owners is that they — rather than Dunkin’ itself — control the brand’s supply chain.
Dunkin’ is owned by private equity firms Bain Capital Partners, Carlyle Group and Thomas H. Lee Partners LP, which purchased it from Pernod Ricard SA in 2006 for $2.43 billion, and they’ll retain the majority of the company.
Coen said another concern about the IPO is that the company could lose focus on its overall strategy.
“A public company has strong interest in quarterly profits as opposed to long-term growth,” he said.
He said the franchisees are keeping a close eye on the company’s plans for expansion, particularly since previous Dunkin’ efforts on the West Coast haven’t been particularly successful.
Dunkin’ promises a different growth strategy this time, moving contiguously from its New England home base rather than trying to leap-frog to California, while also adding more stores in the states where they already do business.
Branca is already part of that effort. He’s in the process of opening new stores in Ohio and upstate New York, where Dunkin’ shops aren’t unknown, but aren’t on every other block, either.
“People will tell you, ‘I couldn’t wait for you to open a Dunkin’ Donuts in my town,’ ” he said.
Branca tells stories about eager future customers driving over traffic cones or onto the landscaping in an effort to get into new stores before they open their doors.
Branca said he’s hopeful enough about the IPO that, assuming the terms offered to franchisees are reasonable, he plans to buy stock himself.
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