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In 1948 Dunkin Donuts started off as a restaurant serving donuts and coffee in Quincy, Massachusetts; the original name was “Open Kettle” which was founded by Bill Rosenberg. In 1950, Rosenberg changed the name of the restaurant to “Dunkin Donuts”. His goal was, and still is today, to “make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores.” Within the next five years, Rosenberg opened Dunkin Donut’s first franchise location and the number of restaurants grew to over 100 shops within just 10 years.
Dunkin’ Donuts has since served more than 3 million customers each and every day. They offer more than 70 varieties of donuts, including classic and regional flavors, along with a wide variety of bagels, beverages, breakfast sandwiches and more. Dunkin’ Donuts menu also includes drinks such as: coffee, iced coffee, iced teas, latte and many more. They have more than 11,300 Dunkin Donuts restaurant locations worldwide with over 3,200 international restaurants located across 36 countries. Their products are priced moderately and affordably in order to attract their target market, “the urban crowd of age 35 years and below”.
Depending on their location within a country, they use global pricing to provide quality product and price to customers. Using print media to mass media from the bright color logo, they use these to promote their brand.
Dunkin’ Donuts knows that in order to have a great and thriving company they have to provide their employees with a great culture. They united their employees with a value proposition: “Extraordinary Brands, Extraordinary People”.
They seek to create a safe and fun environment for their employees and provide them with the tools necessary to succeed within the company. In their latest engagement survey, Dunkin Brands employees wanted to see more reflections of diversity and inclusion within the brands and since then they have increased resources to the D&I strategy.
With its strong geographic coverage, legendary variety of more than 1,000 doughnut products, and strong loyalty by the average Joe, Dunkin’ Donuts is one of the most recognizable quick-service restaurants in the world. The company’s tagline “America runs on Dunkin” reminds us of the loyalty that its customers possess for its pastries, bagels, muffins, and coffee. There are many similarities between Portuguese pastries, and their ingredients, to Dunkin’ Donuts current menu. Cafés in Portugal are everywhere, not just in your retail centers, but spread throughout the neighborhoods as well, even in the most remote places. The bakery and pastry industry in Portugal consists of around 6,300 companies; these types of traditional Portuguese cafés often have a range of baked goods that are similar to those that are sold through Dunkin’ Donuts. The Portuguese people do not need for it to be any particular time of day in order to indulge in a pastry; they often consume them during coffee breaks, breakfast, mid afternoon snack, or with an after-dinner coffee its more of a time to gather with friends or family to catch up.
In order for Dunkin’ Donuts to enter the country of Portugal, the best way to move forward would be to use a company franchise as they are relatively low risks and offer a low initial capital investment need. Considering that Dunkin Donuts does not offer licensing as a current business model, as they run a nearly 100% franchise business model, conducting business in Portugal is fairly easy as they have a very cooperative approach to negotiation and seek a win-win resolution. There are, however, a few customs that need to be kept in mind as to not offend the Portuguese and their culture. The United States approach to business negotiation is very aggressive and is typically conducted in a fast pace manner, which is commonly frowned upon by them. United States companies are used to negotiation dealings being done “their way” and that potentially aggressive conduct should be kept in mind when entering business meetings between the two counties.
There are, however, many benefits to franchising as there is a low need for capital and more of a focus on the brand, especially when you consider marketing. The potential for penetration into the market is greater this way and there is a relatively low risk being run. The liability of being a foreign business in the country Dunkin’ Donuts would have to oblige by the rules and customs of conducting a business in Portugal. On average the initial capital expenditure needed to partner up with Dunkin’ Donuts is of $450,000 with an initial franchising fee ranging from $25,000 to $100,000. They report an average unit amount of around $936,000. Royalties charged range from 5% to 6% in the U.S., and an advertising fee of 5% of total gross sales. The one thing that might defer potential investors is that the company does not provide guarantee for the financial obligation of the franchise.
International market expansion can be a great source of revenue and growth for Dunkin’ Donuts as there are several parts of the world where Dunkin’ Donuts does not have an impressive presence. Although the products are good, market expansion is needed, especially as earning of people rise and consumption of branded products is increasing. Dunkin’ Donuts is both a place to come and get your morning fix of coffee and somewhere you can hang out after work or school with your friends and family and enjoy some pastries. A desired location in Lisbon, preferably within a popular shopping mall that is readily available to the locals, is the ideal spot as this will present both a high traffic and high demand for a fast and easy pick me ups in between the locals shopping experience.
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