Dunkin' Donuts To Close 800 U.S. Locations

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Dunkin' Donuts To Close 800 U.S. Locations

Post by Alpha8472 » August 1st, 2020, 3:53 am

Dunkin' is closing 800 U.S. locations by the end of the year including 450 limited menu locations at Speedway gas stations. These are low volume locations per Dunkin'. Dunkin' wants to encourage franchisees to invest in more profitable high volume locations such as drive thrus.

There are 2 Dunkin' locations near me, and one does not have a drive thru. That location was the only one in the San Francisco Bay Area when it opened several years ago. It was very crowded at first with lines stretching out the door and hours long waits. Now it is empty and sad looking. The donuts are not that great and the novelty has worn off.

A Dunkin' with a drive thru opened at a Chevron gas station in Oakland, California a couple of years ago. This location does decent business. It replaced a Del Taco.

https://chainstoreage.com/dunkin-expect ... -us-stores

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by storewanderer » August 1st, 2020, 5:35 pm

What is interesting about this is Dunkin is a virtually 100% franchise network. So are they kicking out 800 franchises, or are 800 franchises performing so poorly that they are going out of business?

In the East, Dunkin is a very present and very popular brand. They have a reliable model to provide lousy but passable food and pretty good drinks, at reasonable prices. Cleanliness and service are not strong points, but efficiency is a strong point and so is value. They have many small shoebox like locations; large locations and locations with drive throughs are few and far between. They are like a Subway, but a coffee and donut version- opening in funny spots, lousy spots, and able to survive on low sales volumes.

Out West, Dunkin seemed to go for a different strategy. They seemed to want to present as another Starbucks. Oversized locations were opened in too high rent of places for the service offering of this brand. The prices are the same or higher than Starbucks, yet the experience in the locations is quite terrible. The Sparks, NV Dunkin is a horrible operation; filthy, extremely slow service, frequently out of donuts, drink prices are higher than Starbucks, requires a bathroom key, and understaffed often with one or two employees for both counter and drive through; very disorganized. The Sparks Dunkin has the 3.6 rating on Google Maps and 2.5 rating on Yelp that it deserves. Now there is a new Dunkin inside Wal Mart in NW Reno and it already looks dirty, with storage carts in the "dining area" and presents poorly. No clue how it is operated but it does not present like a professional operation. The other Dunkin in my area in Carson City, NV went out of business but it was run just like Sparks except that it did have lower prices than Starbucks.

Dunkin is a mismanaged operation. They should have entered the Western United States with some corporate operated locations (see if they could actually make the oversized locations in high cost markets turn a profit...), run them well, built up the business, then gone to a franchise model if they wanted to. They basically blew it. They need to exit the west coast entirely. Again. Or take over the franchisees and run as corporate stores and run them well but even then I question if their model can be profitable with the locations they've selected.

There is a place for Dunkin in the west, if operated properly. It could be the Starbucks for the working person. That means locate where Starbucks isn't. And stop trying to charge Starbucks prices.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by buckguy » August 1st, 2020, 6:18 pm

Not quite sure where you're getting your generalizations. Dunkin has been pushing their coffee for decades in all their markets. Pre-Starbucks it wasn't bad compared to the competition and they continue to have a following of sorts fo it. It's still not unusual for people to bring a box of it to workplaces anyplace I've been in the East, even where Starbucks has saturated the market, mostly because it's easy to pick up a dozen donuts, too. They don't have drive throughs in urban locations (which make no sense) or places where their locations have even around for a long time, but drive throughs are not difficult to find E of the Mississippi. Dunkin' has come, gone and come back again in quite a few markets, it probably depends on who they get as regional franchises.

The donuts have been pretty horrible for a long time, but they really don't have much competition unless you count Krispy Kreme which is bad in a different way. They bought out Mister Donuts, which had more a cake donut. They've had foreign franchises for decades and seem to do well in a variety of places.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by cjd » August 1st, 2020, 7:09 pm

There is a Dunkin' Donuts near where I work and they frequently bring in donuts since it's close by. That location dates back quite a while, I believe it was built around the late 80s, and as far as I can remember it's always had a drive thru. The line often backs up into the road most mornings.

The location also sells Marathon gas and diesel. IIRC it originally sold Shell fuel.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by storewanderer » August 1st, 2020, 7:30 pm

buckguy wrote:
August 1st, 2020, 6:18 pm
Not quite sure where you're getting your generalizations. Dunkin has been pushing their coffee for decades in all their markets. Pre-Starbucks it wasn't bad compared to the competition and they continue to have a following of sorts fo it.
Before the main push at Dunkin was hot black coffee and frozen blended coffee products (back in the 90's). Starbucks focus was much more geared toward custom made espresso-based drinks, specifically hot drinks. And that holds true today. Starbucks has really pushed iced beverages the past 10-15 years but before that the focus was hot. When you go into a Dunkin back east even during off hours there are always multiple types of black coffee available. When you go into a Starbucks during off hours, you are lucky if they have one kind of black coffee available and often the black coffee order will have a delay as they brew it fresh due to slow sales of that item during non-morning periods, or they will offer to do a pour over.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by marshd1000 » August 1st, 2020, 11:20 pm

So if they are closing 800 stores, will they keep expanding in the West? Last year I was in a Dunkin’ in San Carlos, CA. I thought the products, both coffee and donuts, and atmosphere were fine! I am hoping that they will return to Washington State! Before last year, the last time I had set foot in a Dunkin’ was in 2002 in one of the last Washington State stores in Burien. The San Carlos location was a huge improvement from what I had remembered of Dunkin’. Ironically, the Burien store’s lease ultimately was taken over by Starbucks!

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by pseudo3d » August 2nd, 2020, 12:14 am

They're constructing a Dunkin' Donuts in my town on a well-trafficked (if underdeveloped) major corridor. The other closest one I know of is inside a Pilot gas station about an hour away, and I seem to remember that was just a kiosk (possibly self-serve), despite advertising it as one of the business' options (the only other options are the generic "PJ Fresh" and a Subway, the latter of which isn't even connected to the truck stop due to previous construction)
Off Topic
The Pilot was built about twenty years ago as a Exxon gas station that incorporated a full-scale Denny's. About five years ago, about a third of the Denny's was converted into a new Subway, which only opened to the outside. Not too long after, Denny's became some sort of generic "country cafe" and ceased operating all together. After that, the whole station was gutted for a Pilot, except for the Subway. The new Pilot for some reason did not have operational restrooms when it opened (forgot what their excuse was), literally directing patrons to the Subway next door.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by storewanderer » August 2nd, 2020, 1:10 am

marshd1000 wrote:
August 1st, 2020, 11:20 pm
So if they are closing 800 stores, will they keep expanding in the West? Last year I was in a Dunkin’ in San Carlos, CA. I thought the products, both coffee and donuts, and atmosphere were fine! I am hoping that they will return to Washington State! Before last year, the last time I had set foot in a Dunkin’ was in 2002 in one of the last Washington State stores in Burien. The San Carlos location was a huge improvement from what I had remembered of Dunkin’. Ironically, the Burien store’s lease ultimately was taken over by Starbucks!
I'm sure they will expand wherever they can sell franchises... that seems to be the model. Quantity over quality. And now that model means close 800 stores (plus those Speedway ones they previously announced closing?)...

The beverages they sell are actually quite good. The donuts are mostly horrible in Sparks; not fresh and poorly prepared; little variety. Some of their flavors are good- if you can get them; butternut is probably my favorite flavor they have (in the case of Sparks, they have not had it about the last 5 times I've gone). Their muffins are also above average in quality. Atmosphere would be fine in Sparks if the place was clean and not run like it is in the middle of a high crime area, which it is not (locked restrooms, filthy floors, etc.).

I just think the dominance of Starbucks, combined with the generally strong operation of Starbucks sites, on the west coast, is simply too much for them to overtake based on their model. Again if they went for locations where Starbucks isn't, it could work out. But that would mean going into some lower income neighborhoods which to this point I have not seen happen. Many, many opportunities though.

Also I see that San Carlos location running on extremely limited hours; closing at 3 PM now. That is even more limited hours than the one in Carson City had during its final months of operation. Recent reviews on that San Carlos location on Yelp are absolutely horrible.

These West Coast Dunkin locations should be top of the line, operated like well oiled machines, and high volume. There is a novelty factor with this brand; these locations are always extremely busy when they first open, and if they ran them right they could make it happen and retain some of that business to the point they would at least be busy shops (not like when they first open with dozens of people in line and traffic jams, but at least steady lines of a few customers). And with that they'd sell more franchises as potential franchisees saw these busy well run shops. But instead they run them like crap, and they flounder.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by Alpha8472 » August 2nd, 2020, 1:19 am

They wanted to make customers go inside the Subway and get more business. Running a Subway franchise is very difficult. You cannot even get customers to go inside anymore. I know one Denny's restaurant that lost its right to use the Denny's name. They could have renamed it Danny's and kept it open as an independent restaurant.

Dunkin' says that closing these underperforming stores will create opportunities for Dunkin' to open more locations in the future. The chain wants to get rid of these awful stores that are dragging the company down. There are some awful locations that need to be shut down in order to not tarnish the Dunkin' name. The ones without drive thrus are not big moneymakers. Once the bad locations are gone, new people can open up high volume drive thru locations that will bring in the profits. Dunkin' believes that people will see these new well run locations and flock to them over Starbucks and Krispy Kreme. Dunkin' is thinking that they can take over the West Coast from Starbucks.

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Re: Dunkin' Donuts To Close 800 U.S. Locations

Post by BillyGr » August 2nd, 2020, 11:17 am

storewanderer wrote:
August 1st, 2020, 5:35 pm
What is interesting about this is Dunkin is a virtually 100% franchise network. So are they kicking out 800 franchises, or are 800 franchises performing so poorly that they are going out of business?

In the East, Dunkin is a very present and very popular brand. They have a reliable model to provide lousy but passable food and pretty good drinks, at reasonable prices. Cleanliness and service are not strong points, but efficiency is a strong point and so is value. They have many small shoebox like locations; large locations and locations with drive throughs are few and far between. They are like a Subway, but a coffee and donut version- opening in funny spots, lousy spots, and able to survive on low sales volumes.
The article notes that it's up to 800, and that includes the 450 Speedway locations (they didn't want to renew the contract that was originally set up by Hess before Speedway bought those stores), so at most 350 additional locations elsewhere.

Most of the ones locally (this is NY State and parts of Western MA/VT) have drive thru (many are newer or replacements for older stores) - the ones without drive thru tend to be in spots where they are older and simply haven't got room to add a drive thru (in fact, many have added one that you wouldn't have thought they would have had room to do), sometimes in city type locations where they may get more people walking/using buses anyway where a drive thru wouldn't be helpful.
storewanderer wrote:
August 1st, 2020, 7:30 pm
When you go into a Dunkin back east even during off hours there are always multiple types of black coffee available.
As far as I know, they only make 3 coffees - regular, decaf and a dark blend. So, they probably do have all 3 at most times, as it's not nearly as hard as stores that offer many different flavors already premade.

All the flavored options at DD are just shots or syrups added into those basic coffees, unlike years ago where they actually brewed flavored coffees (even though they still sell flavored versions for take home use).

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