Dunkin’ Brands appoints Travis CEO; Luther remains chairman in new plan

Dunkin’ Brands appoints Travis CEO; Luther remains chairman in new plan

CANTON Mass. Dunkin’ Brands Inc. [3] could help to strengthen global expansion, technological development and franchisor-franchisee relationships at the company’s two snack chains, Dunkin’ Donuts [4] and Baskin-Robbins [5], observers say. —The addition of Nigel Travis to the executive ranks of

Travis, who recently relinquished his post as president and chief executive of the No. 3 pizza chain, Papa John’s, will step into the role of chief executive at Dunkin’ Brands early next month. The position was vacated by 65-year-old Jon Luther, who will remain executive chairman. —The addition of Nigel Travis to the executive ranks of

While the company characterized the move as part of succession planning, Luther intends to remain active in the company. —The addition of Nigel Travis to the executive ranks of

“Naming a successor wasn’t about [Travis] succeeding me and then having me retire,” said Luther, who joined Dunkin’ in 2003.“It was about how do we split the role of executive chairman and CEO.” —The addition of Nigel Travis to the executive ranks of

In the new configuration, Luther continued, Travis will focus on day-to-day operations. —The addition of Nigel Travis to the executive ranks of

“Nigel will drive brand performance over the next five years,” he said. “As the executive chairman, I’ll look more at the big strategic picture, the long-range picture.” —The addition of Nigel Travis to the executive ranks of

Travis takes the reins of the privately held firm at a time when U.S. snack chains are struggling with the deepening recession. Competitors like Starbucks [6], Caribou Coffee [7], Krispy Kreme and Jamba Juice [8] all have reported sharp decreases in same-store sales. —The addition of Nigel Travis to the executive ranks of

Dunkin’ Donuts also is feeling the heat in the escalating coffee wars with McDonald’s [9], Starbucks and other brands looking to boost sales by offering specialty brews. Subway [10] became the latest brand to join the fray recently when it announced it would begin testing Starbucks-owned Seattle’s Best coffee next month. —The addition of Nigel Travis to the executive ranks of

Luther declined to reveal financial results for the privately held Dunkin’ Brands’ chains, but acknowledged that the economic climate is “far worse than anything I’ve ever seen before.” —The addition of Nigel Travis to the executive ranks of

“We’re holding our own,” he said. “We have strong, positive cash flow, and we’re profitable. But some markets, like Southern California, have been harder hit than others.” —The addition of Nigel Travis to the executive ranks of

While the company continues to make “prudent investments in some initiatives,” he said there also has been some belt tightening at the two chains. —The addition of Nigel Travis to the executive ranks of

Observers praise Travis’ track record at Papa John’s. During his nearly four years at the pizza chain, which began in April 2005, the Louisville, Ky.-based brand posted significant growth, especially when compared with the three years prior to his hiring, a period that included the economic slowdown of 2002. —The addition of Nigel Travis to the executive ranks of

For the three full fiscal years ended in December 2007, worldwide revenue at Papa John’s grew 9.8 percent, to $1.06 billion, compared with a revenue drop of 0.15 percent in the preceding three years. Though profit margins fluctuated year to year during that time, the company booked a 36.9-percent increase in net income during the three years with Travis at the helm. In the previous three years, the company’s net income declined each year. —The addition of Nigel Travis to the executive ranks of

However, because of the environment of weakened sales and increased costs, Papa John’s most recently reported a 3.9-percent decrease in net income to $24 million, on a 9.3-percent increase in revenues to $852.4 million, for the nine months ended Sept. 28. —The addition of Nigel Travis to the executive ranks of

During Travis’ time at Papa John’s, the chain’s online sales tripled through the implementation of new technology, and global expansion was stepped up as a major growth platform. Travis estimates that the number of units grew by about 20 percent to 3,300 locations worldwide. —The addition of Nigel Travis to the executive ranks of

Under Luther’s leadership, Dunkin’ Brands also ratcheted up international growth. For example, earlier this year Baskin-Robbins inked a deal to expand its presence in China by opening 100 new dipping shops there. The brand already operates more than 40 Beijing locations. —The addition of Nigel Travis to the executive ranks of

Luther also spurred the company to grow beyond its Northeast roots by entering new domestic markets through partnerships with franchisees that had the financial muscle and infrastructure to open multiple locations. The company signed more than 1,000 franchise deals in 2007 alone. —The addition of Nigel Travis to the executive ranks of

“We’re confident that growth will top the agenda at Dunkin’ Brands through strong franchisee relationships,” said Travis, who also worked closely with franchisees during his decade at Blockbuster Inc. between 1994 and 2004. During that time, the brand increased international sales by more than 50 percent. —The addition of Nigel Travis to the executive ranks of

Malcolm Knapp, president of Malcolm M. Knapp Inc., a New York-based restaurant consultant, called Travis’ appointment “a fabulous move.” —The addition of Nigel Travis to the executive ranks of

“[Luther and Travis] are very complementary,” Knapp said. “It frees Luther up to handle external matters, and he can continue with his strategic role, which I’m sure he will. Nigel is technologically savvy. He helped increase Papa John’s use of online ordering. He knows the international markets, which is important for Dunkin’ Brands. He is a strong guy administratively, tactically, strategically—and he’s very personable. He also has dealt with franchisees, which is an important part of the puzzle.” —The addition of Nigel Travis to the executive ranks of

Travis said his first actions as chief executive “will be to listen to what others have to say.” —The addition of Nigel Travis to the executive ranks of

“I want to meet with the team at Dunkin’ Brands and want to meet with the franchisees and hear what they have to say,” he said. —The addition of Nigel Travis to the executive ranks of

Dunkin’ franchisees are looking forward to meeting Travis as well, said Jim Coen, acting president of Dunkin’ Donuts Independent Franchise Owners, a Bellingham, Mass.-based group that represents about 1,500 locations. —The addition of Nigel Travis to the executive ranks of

“Nigel has a reputation for reaching out to franchisees and listening to what they have to say,” Coen said. “We very much look forward to that opportunity. —The addition of Nigel Travis to the executive ranks of

“Franchisees are under a lot of pressure,” he continued. “We are struggling with profitability, with increased competition, increased costs from remodeling, from new sandwich lines. It’s a much tougher environment than a few years ago, and some decisions made by the brand have impacted the profitability of the franchisees in a negative way. We’re hoping that [Travis] will embrace a collaborative approach with the franchisee community.” —The addition of Nigel Travis to the executive ranks of

During his time at Papa John’s, Travis said, the company communicated with franchisees by conferencing with them in small groups. —The addition of Nigel Travis to the executive ranks of

“It was called ‘tea time with Nigel,’” said the British-born executive. “I guess here it’s going to have to be ‘coffee and doughnuts with Nigel.’” —The addition of Nigel Travis to the executive ranks of

Luther said Travis’ first 100 days with Dunkin’ Brands would be spent evaluating the chains. —The addition of Nigel Travis to the executive ranks of

“[Travis] will have free rein,” Luther said. “I look to him to challenge things.” —The addition of Nigel Travis to the executive ranks of

Luther also said one of his roles will be to serve as a liaison between Travis and the board, “so he gets good counsel and the board is apprised of what is happening.” —The addition of Nigel Travis to the executive ranks of

In addition, Luther said he plans to step up his involvement in public affairs, working in Washington, D.C., with such organizations as the National Restaurant Association [11], National Council of Chain Restaurants [12] and the International Franchise Association [13] to address industry-related issues like menu labeling. —The addition of Nigel Travis to the executive ranks of

“With the ongoing growth of the company there is responsibility to step up involvement in key issues that impact the industry and the brands,” said Stephen Caldeira, Dunkin’ Brands’ chief global communications and public affairs officer. —The addition of Nigel Travis to the executive ranks of

In 2007 Dunkin’ Brands Inc. counted more than 14,000 restaurants in the Dunkin’ Donuts and Baskin-Robbins systems worldwide, which generated systemwide sales of about $6.6 billion. The publicly traded Papa John’s reported systemwide sales of some $2.1 billion. —The addition of Nigel Travis to the executive ranks of

Under Luther’s stewardship, Dunkin’ Brands was acquired from former parent Pernod Ricard SA by three private-equity firms: Thomas H. Lee Partners LP, Bain Capital and The Carlyle Group. The 2005 transaction, which included the now-divested Togo’s [14] sandwich chain, was valued at $2.43 billion. Knapp suggested that Travis’ experience running a public company like Papa John’s could be invaluable if the three private-equity firms decide to take Dunkin’ Brands public in the future. —The addition of Nigel Travis to the executive ranks of

Luther also oversaw the expansion of the chains’ menus. During that time Dunkin’ Donuts broadened its beverage offerings to include espresso, cappuccinos, lattes and flavored blends. The chain also expanded well beyond its core doughnut business to include items like panini sandwiches, personal pizzas, bite-sized hash browns and flatbread sandwiches. —The addition of Nigel Travis to the executive ranks of