Clayton Turnbull was first introduced to franchising at age 15, while working at McDonald’s. The emerging business concept made such an impression on him that he was determined to have his own franchise one day.
In 1992, Turnbull opened his first Dunkin’ Donuts in Mattapan, Massachusetts. Six years later the number stands at five, with plans in the works for a total of 12 in the Boston area.
Turnbull looked at other franchises first, but chose Dunkin’ because there wasn’t one in his community. “Before I opened my stores, people in Dorchester, Roxbury and Mattapan had to go downtown to get a good cup of coffee.”
Both the idea and choice have paid off. He has received the 1998 Black & White Boston Business Profile Award, the 1997 Entrepreneurial Success Award and the 1996 African American Achievement Award for Business from the mayor of Boston.
According to Terry Hill of the International Franchising Association, the opportunities are there for the taking. “Franchising has grown 10% over the last year,” says Hill. “Growth has been particularly strong in certain fast-food chains.”
Since its face-lift in 1994, Dunkin’ Donuts has been one of those chains. U.S. sales grew 10% in 1997 and are up more than 10% this year, outpacing the fast-food industry’s 2% sales growth average overall.
Dunkin’ is giving fast-food chains like McDonald’s and specialty coffee retailers like Starbucks a run for their breakfast dollar. Their addition of flavored and specialty coffee drinks has pushed coffee sales up 40% since 1995. Bagel sales are expected to exceed $200 million this fiscal year and doughnut sales are prolific-they’re up 10% industrywide.
“Dunkin’ Donuts is forward-thinking in that they’re doing a good job of understanding what their customers’ needs are,” says Tom Feltenstein, president and CEO of Franchise Systems Corp., a franchise consulting firm in Palm Beach, Florida.
Allied Domecq, Dunkin’s parent company, isn’t just settling for the breakfast market, however. This spring, the British-based operation–which also owns Baskin-Robbins (ice cream) and Togo’s Eateries, a 215-store California-based sandwich chain, announced it would make all three stores available in one franchise agreement. By adding 1,600 new locations, Allied Domecq will increase its U.S. retail presence by nearly 34% over the next three years. Eighty-five percent of the growth is expected in New England, New York, Baltimore, Washington, D.C., Philadelphia, Chicago, Phoenix, South Florida and California.
“Growth will come from new franchisees with the financial means and sophistication to open and successfully operate multibrand locations, and existing franchisees who open additional outlets,” says Douglas Fischer, director of franchising for Allied Domecq.
A minimum financial requirement of $100,000 for a Baskin-Robbins or a Togo’s and $200,000 for a Dunkin’ Donuts franchise or a multibrand location only buys the name. The franchisee is still responsible for leasing or purchasing the site, building it to specifications, hiring all employees and handling day-to-day operations.
Like Dunkin’, Baskin-Robbins has undergone a makeover and has expanded its beverage line to include smoothies and frozen coffee drinks. Turnbull declined to add Baskin-Robbins to his lineup due to slow and/or seasonal ice