America et al. Runs on Dunkin: Brand Releases 2013 Expansion Results


Dunkin’ Brands Group (NASDAQ:DNKN) had optimistic news to report to investors Monday when the company released its global expansion results for 2013 and made forecasts for 2014. Dunkin’ Brands has been especially vocal about its agenda for expansion across the U.S. and abroad within recent years, and this latest news report proves that the Canton, Massachusetts-based company hasn’t been messing around.

According to its news release, Dunkin’ Brands opened a combined total of 790 new net Dunkin’ Donuts restaurants and Baskin-Robbins shops globally in 2013, and that makes the brand one of the fastest growing companies by unit count in the quick service restaurant industry. Dunkin’ Brands especially was aggressive with its Dunkin’ Donuts expansion last year, and opened 371 net new restaurants in the U.S. in places like Colorado, New York, Texas, and Utah, among others. Dunkin’ Donuts also signed multi-store development agreements in more than 20 domestic markets, including Southern California; Detroit, Michigan; Reno, Nevada; Salt Lake City, Utah; throughout Texas and Ohio; and many other regions.

It was back in June we learned that Dunkin Donuts was gearing up to expand its presence West, and more than six months later, the brand has made significant progress. The donut chain has long been a brand rooted firmly on the East Coast, but although it is still thriving in New England, New York, and other eastern markets including Pennsylvania and Florida, the company announced its readiness in June to take its product West and eventually break into the lucrative market that is California. Expanding westward into California is still Dunkin’s plan, and the company’s news report Monday illuminated that it has executed agreements to develop nearly 100 traditional restaurants in California. The company believes it will eventually have 1,000 Dunkin’ Donuts locations in the Golden State.

As for Baskin-Robbins, Dunkin’ Brands reports that the brand also experienced positive net new growth in 2013, and opened a net number of four new locations in markets including California, Florida, and Texas. Baskin-Robbins plans to open new units in markets including Arizona, California, Florida, and Texas within the coming year, and its ultimate goal is to open 5 to 10 new Baskin-Robbins restaurants in the U.S. in 2014. The brand also launched a new restaurant design option last year.

Dunkin’ Brands also isn’t keeping its expansion plans within U.S. borders. The company announced Monday that Dunkin’ Donuts opened 138 new restaurants outside the U.S. in 2013, and among those were its first locations in the United Kingdom in the Greater London area, and in Vietnam in Ho Chi Minh City. Dunkin’ Donuts also signed five new franchise agreements in Germany, and plants to have 150 restaurants in that country over the next several years. As of now, it has 41.

Baskin Robbins opened 277 new locations internationally in 2013, and announced franchise recruitment in South Africa and Germany, while also signing a licensing agreement for the Philippines and nine new store development agreements for Baskin-Robbins in China. It plans to add 375 new Baskin-Robbins restaurants in China over the next 10 years.

Looking forward, Dunkin’ Brands expects its franchisees and licensees to open 380 to 410 new U.S. Dunkin’ Donuts restaurants and 5 to 10 new U.S. Baskin-Robbins locations in 2014, and also continue expanding its presence internationally. By the end of the year, it expects to open 300 to 400 new Dunkin’ Donuts and Baskin-Robbins restaurants for a worldwide total of 685 to 800 Dunkin’ Donuts and Baskin-Robbins net new restaurants in 2014.

Nigel Travis, CEO of Dunkin’ Brands, stated Monday in his news release that, “We are delighted with Dunkin’ Donuts’ accelerated growth across the U.S., which demonstrates ongoing strong demand for our brand, and we remain on track for a five percent net annual development rate for Dunkin’ Donuts U.S. We are especially pleased with the solid start to our development plans in California where, to date, we have executed agreements for nearly 100 traditional restaurants. Additional good news is that in 2013 Baskin-Robbins, which has been experiencing strong growth internationally for many years, also had positive net development growth in the U.S., marking a major milestone in the turnaround of the brand domestically.”