BELLINGHAM Mass. A group representing Dunkin’ Donuts franchisees in New England and New York is objecting to business deals made last year by franchisor Dunkin' Brands Inc. to sell the chain's coffee products in retail and on-site locations.
The Bellingham-based DD Independent Franchise Owners, which includes franchisees in 12 states, said in a statement Thursday that deals with Hess Corp., Sara Lee Foods and Procter & Gamble would ultimately devalue the brand and hurt business for franchisees in the Northeast.
The partnerships with Hess and Sara Lee call for the development of self-service coffee stations in gas stations and corporate dining accounts, respectively. Dunkin's deal with Procter & Gamble involves the distribution of packaged coffee to grocery stores, club stores and other retailers.
The DDIFO survey found that 98 percent believe the Hess and Sara Lee deals will hurt the brand. Fifty-nine percent said the same about the Procter & Gamble pact. Respondents said they haven't received any financial benefit from the P&G partnership, which pits retail sales of 12-ounce-size packages against 16-ounce packages bought in Dunkin’ Donuts stores.
"The company believes these partnerships are a strong way to build the brand and that may be the case," said DDIFO president Mark Dubinsky. "But, in markets where there is already a strong brand presence, like the Northeast, it can have a negative impact."
Dunkin’ Brands officials, however, said the company communicated fully with its franchisees concerning the deals.
“Dunkin’ Brands and our senior leadership team communicate broadly and directly with our entire Dunkin’ Donut franchisee system about all of our strategic partnerships, which are designed to build out the Dunkin Donuts Brand for the long-term,” said Stephen J. Caldeira, chief global communications and public affairs officer for the Canton, Mass.-based company.
He added: "Our goal is to increase franchisee profitability by responding to ‘on-the-move’ consumers’ desire for their brand of coffee wherever they go, and we’re confident these partnerships will achieve this goal.
"Quite simply," he said, "if our franchisees do not do well, then we do not do well.”