Independent Joe Magazine Issue #7 December 2010

December 2010 • Issue 7

We Communicate, We Educate, We Advocate!

60 Years of Dunkin’ A Look Back on Rosenberg’s Dream

also in this issue

Immigration The Dunkin’ Donuts Success Story Profit Building with Perry

College Campuses Clamoring for Dunkin’ Donuts

www.lisasousa.com

Lisa & Sousa Ltd. is a firm with over 50 years of collective experience representing multi generational Dunkin Donuts franchisees in the acquisition, financing, development, structuring, transitions and transfer of franchised and other businesses.

Specific examples include: transfer of ownership of 100 franchise locations in Northeast, Southeast and other parts of the United States; sale of 48 locations in NY; purchase of 15 stores in the Northeast; acquisition of multi-shop networks in Florida (18), Vermont (20) and Cape Cod, MA (20); Store Development Agreements (SDA’s) throughout the country; and formation of cooperative Central Production Locations (CPL’s).

Lisa & Sousa Ltd. is general counsel for the Dunkin Donuts Independent Franchise Organization (DDIFO) with a membership of approximately 1500 Dunkin Donuts franchise units nationwide.

Our clients have chosen to have an on-going relationship with Lisa & Sousa Ltd. because of experience, proficiency, determination and attention to detail.

Immigration The Dunkin’ Donuts Success Story by Matt Ellis 03 It’s been nearly 40 years, but John Batista still remembers how it felt to be an immigrant. When he left his home village of Vila Franco de Campo on the Azorean island of Sao Miguel in 1971, he had no idea what to expect. After a quick stop in Montreal he found his way to Rhode Island to take a job at his brother’s Dunkin’ Donuts shop.

Batista had not gone to college and knew he was lucky to get a job that would help him get established in this new country.

board of directors and a former vice president of development and operations for Dunkin’ Donuts, says the secret to the success of Dunkin’s early immigrants was their determination and willingness to work hard.

Matt Ellis

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“Because the immigrants who joined with [Dunkin’ Donuts founder] Bill

After working as a night baker for a number of years, Batista started feeling at home in America. It certainly helped that he was surrounded by family; it also helped that his work had a customer service component.

John Batista is behind the counter “At the Dunkin’ Donuts store of the Warwick, RI store in 1974, we had to deal with English and in a recent photo at right. speaking customers. It didn’t take me too long to feel comRosenberg in the fortable having conversations,” he said. early years were hard workers who It also didn’t take long for Batista to get knew how to save established. Less than a decade after and reinvest their equity, Dunkin’ was emigrating to the U.S., he bought his reinvigorated during the difficult ecoown Dunkin’ Donuts store in Worcester, nomic years of the mid 1970’s and early MA. Not long after, he expanded and 1980’s,” he said. built a successful network that now provides jobs and financial security for In September 2010, McCarthy was his family. invited to speak to the National Immigrant Integration Conference (NIIC) held If “America runs on Dunkin’” as the in Boston. “I specifically sought out the slogan suggests, it was immigrants who Dunkin’ franchisees rather than somegot the engine started. From the beginone from the corporation because the ning, immigrants who moved to America from the Azores, India and Pakistan built real story of Dunkin’ Donuts’ success is its labor,” said Westy Egmont, co-chair Dunkin’ Donuts into one of the most of the 2010 conference. “Dunkin’s bigprized American brands. Today, more gest story is the entrepreneurial nature than half of all Dunkin’ Donuts stores of its immigrants – not its market capiare owned by immigrants. 60% of the talization.”

Dunkin’ Donuts shops in the northeast are owned by the families of Portuguese While some immigrants, like Batista, immigrants; and in the Mid-Atlantic, came here to find new opportunities; Southeast and Chicago-area, a majority others came to escape war and ecoof stores are owned by South Asians. nomic upheaval. At the same time Kevin McCarthy, chairman of the DDIFO Batista left the farms of the Azores, Siraj

Immigration The Dunkin’ Donuts Success Story College Campuses Clamoring for Dunkin’ Donuts Brooke McDonough

07 08 10 19

Turning on a Dime Perry Ludy

DDIFO Directory of Sponsors 60 Years of Dunkin’ Brooke McDonough

Index of Advertisers

Cover Photo: Customers lined up for George Carras’s donuts and fresh coffee during Boston’s Blizzard of 1978. Carras’s was the only business open in the neighborhood for days.

Virani left the rugged terrain of Pakistan.

It was 1971 and Pakistan was at war with India. During the conflict 90,000 Pakistanis wound up in prisoner of war camps; thousands of others fled.

Just 19 years-old, Virani had won a scholarship to attend college in the United States. He emigrated, earned an associate’s degree from the Central YMCA College in Chicago and went on to study accounting and finance at Roosevelt University. Eventually, Virani followed the lead of earlier south Asian immigrants like Amrit Patel, who came to America and scraped together enough money to buy a Dunkin’ Donuts franchise.

As he became established Virani realized he was no longer an immigrant; he was an American. “Once I started working I felt this was my home. It was Immigration continued on page 15 DECEMBER 2010 • INDEPENDENT JOE

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INDEPENDENT JOE • DECEMBER 2010

College Campuses Clamoring

by Brooke McDonough for Dunkin’ Donuts Franchise Owners Are Finding Success on Campus College campuses are showing their love for Dunkin’ Donuts.

means fitting into the college’s individual culture. Franchise owners have to work with the college administration and may as well have to work in concert with the school’s contracted food service provider.

“It’s important to keep an open mind,” Doyle said. “A campus store may look different from your street stores. But you have to work it out so that you’re part of the way the students live on campus.”

Either way, campus life is not what it used to be. Gone are The Bryant University sign for the new campus the days of vending machine coffee and second-rate cafeteria Dunkin’ Donuts sparks school pride. food. Today’s savvy students like One thing is clear: no two schools are their brand names and know how to exactly alike. get what they want. As it turns out, they want Dunkin’ Donuts.

Some campus stores are small, set up in student centers with room for just one In a survey at Bryant College in Rhode cashier. Others are part of convenience Island, students overwhelming requeststores and offer a self-service type ed a Dunkin’ Donuts on campus. Ditto of experience. Conversely, the Penn at Assumption College in Worcester, State store, attracts students with large Massachusetts, and at Roger Williams screen TVs, Wi-Fi, and couches for University. At Penn State University, a lounging. group of Dunkin’ fans went as far as to

Assumption hosted a formal interview process deciding on Dunkin’ Donuts.

In fact, they interviewed more than one coffee franchise to fill the spot. The selection committee included student government representatives and university administrators.

Maybe it’s the freshly brewed coffee.

After all, college students are famous for their late-night study sessions and early morning classes.

Or maybe it’s the munchkins.

As one Penn State blogger wrote in an effort to get a Dunkin’ Donuts on campus, “Who can resist a munchkin?”

At Assumption College, lines for Dunkin’ Donuts have been out the door since opening this September. Doyle and his wife, Christine, are Assumption alumni and have remained active donors to the school, which may have helped get their foot in the door.

Doyle wanted the school to know that he was going to be involved on campus. “You have to be proactive about that,” he said.

“It’s important to build relationships and reach out to the school. You’re on their turf.”

Campuses continued on page 12

create a Facebook page titled, “Bring Dunkin’s to PSU.”

Colleges, eager to please, are connecting with local franchise owners to find ways to put Dunkin’ Donuts outlets on campus.

Currently, there are approximate 25 Dunkin Donuts on campuses across the country. Franchise owners, like Matt Doyle, are discovering that going back to school has its perks, and embracing the collegiate life is the way to make a profit.

“The campus is a great place to be,” Doyle said, who, with his family, has stores at both Worcester Polytechnic Institute and Assumption College.

Some of the lessons learned with campus stores sound familiar. As usual, good locations and excellent service go a long way. But, running a Dunkin’ Donuts franchise on campus also

Independent Joe TM is published quarterly by DD Independent Franchise OwnersSM Editors: Jim Coen, Matt Ellis Contributors: Perry Ludy, Brooke McDonough Advertising: Amy Levine • Graphic Design/Production: Susan Petersen

Direct all inquiries to:

DDIFO, Inc. • 150 Depot Street • Bellingham, MA 02019 508-422-1160 • 800-732-2706 • info@ddifo.org • www.ddifo.org DD Independent Franchise Owners, Inc. is an Association of Member Dunkin’ Donuts Franchise Owners.

INDEPENDENT JOE is a trademark of DD Independent Franchise Owners, Inc. DD INDEPENDENT FRANCHISE OWNERS, DDIFO, and INDY JOE are service marks of DD Independent Franchise Owners, Inc. Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of DD Independent Franchise Owners, Inc. All Rights Reserved. Copyright © 2010 • Printed in the U.S.A. DECEMBER 2010 • INDEPENDENT JOE

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INDEPENDENT JOE • DECEMBER 2010

Turning on a Dime

By the author of Profit Building: Cutting Costs without Cutting People

“Once I built a railroad, I made it run, made it race against time.

Once I built a railroad; now it’s done.

Brother, can you spare a dime?”

Excerpted from Songs of the Great Depression, “Brother, can you spare a dime,” lyrics by Yip Harburg, music by Jay Gorney (1931)

It’s been almost 80 years since the song “Brother, can you spare a dime?” was released. That was right before Franklin Delano Roosevelt was elected to his first term as President of the United States. Much has changed since then although some might argue otherwise, but one thing remains the same – a dime is still a fraction of something larger, it is worth something and can be easily attained with a little effort.

With all the rhetoric surrounding Radiant, JBOD, FLIP, potential new franchise owners, and future innovations, after the smoke clears, improving profits will remain as the number one objective of Dunkin’ franchise owners.

Yet, too many operators do not understand how to move beyond the basics when it comes to cost reduction and profit improvement to make the dimes add up.

It is not a major stretch to see that rapid changes in technology and increasing competition against our core products exacerbate the problem of ineffective management, which makes profit improvement harder to achieve than ever before. Corporate attempts to promote strategies to build franchisee profitability while it tackles technological advancements and strives to develop its own management to keep up with fierce competition.

One common complaint from franchise owners is that Dunkin’ Brands is not able to drill down on the individual components of a profitability growth plan because the company is not in the business of running stores the way franchisees are. This is why franchisees need to identify and seize upon existing opportunities to improve profit – in essence, make all those dimes add up.

If profit improvement is one of the essential elements of our business strategy, what is keeping us from developing the ability to focus continuously on profit improvement the same way we focus on marketing, operations and human resources? Why don’t we provide the resources and leadership necessary to achieve successful and sustainable cost reduction? The following is a brief and simple approach that franchisees may find useful in answering these questions and more.

By way of an example, let’s assume that we are a team that owns a four store network and we are reviewing our monthly results. As we review our September financial statements, we observe the following:

$0.47 of EBITDA while serving 56,463 customers. What could this network do over the next three months to generate $0.57 of EBITDA per customer? If we took this question back to our managers and their crews, I believe we would start to see a trending toward increased cash flow and profit. Restaurant managers often become more engaged when they are asked to approach their jobs from a different direction. To them, being challenged to find ten cents of improvement feels more achievable than saying, “you need to improve your bottom-line by 20%!”

Let’s consider some other scenarios:

• Revenue: Assuming that a price increase is not in our plans, what ways can we increase the average SEPTEMBER guest check Revenue $260,000 in our stores?

COGS $75,400 29.0% Can employees accomplish this Total Labor $64,220 24.7% through sugEBITDA* $26,779 10.3% gestive selling Number of Customers 56,463 or sampling: EBITDA/Customer $0.47/customer Would you *Earnings Before Interest, Tax, Depreciation and Amortization like to make that a large My guess is that before you had a today? Our flatbread sandwiches are chance to finish reading through the outstanding, would you like to try one list, a few questions started to form this afternoon? What about switching in your mind. Where is the network from the regular frequency card to one located? What is the coffee/donut mix? that offers a product with a higher price Is it a CML or JBOD market? Is it a point and profitability? Fully stocked combo network? These are excellent donut cases and coffee walls also help questions, and many more could be build guest check averages. And a asked, but for the benefit of this exersimple “thank you, come see us again” cise let’s ask this question: What can always works. we do to make one additional dime • COGS/Labor Cost (Big Two): We per customer? all understand the opportunities that In our example, for the month of A Dime continued on page 18 September the network generated DECEMBER 2010 • INDEPENDENT JOE

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Directory of Sponsors Absolut Contracting

William Lako 4346 Route 27 Princeton, NJ 08540 609-655-0800 blako@absolutlycan.com “A Member of Franchise Pros”

Access Rewards

Doug Jentzsch 1012 W Beardsley Place Salt Lake City, UT 84119 866-681-2427 dougj@accesscashrewards.com www.accesscashrewards.com

Access to Money, Inc.

Doug Falcone 628 Route 10 - Suite 8 Whippany, NJ 07981 973-599-0600 dougf@accesstomoney.com www.accesstomoney.com

Adrian A. Gaspar & Company, LLP

Robert Costello 1035 Cambridge Street, Suite 14 Cambridge, MA 02141 (617) 621-0500 cpas@gasparco.com www.gasparco.com

Bederson & Company LLP CPAs and Consultants Steven Bortnick 405 Northfield Avenue West Orange, NJ 07052 973-736-3333 sbortnick@bederson.com www.bederson.com

Bedford Cost Segregation Bill Cusato 60 State Street – Suite 700 Boston, MA 02109 978-263-5055 bcusato@bedfordcostseg.com www.bedfordcostseg.com/ who_we_serve/ddifo.asp

Belshaw Adamatic Bakery Group

Fran Kauth 814 44th Street NW Suite 103 Auburn, WA 98001 206-718-3573 fran_kauth@belshaw.com www.belshaw-adamatic.com

Brendon Pierson/PurePayroll Brendon Pierson, Jr. or Jeff Kotch PO Box 1750 Wall, NJ 07719 732-681-4800 bpierson@brendonpierson.com jeffkotch@purepayroll.net www.brendonpierson.com www.purepayroll.net

Carter Glass Insurance Agency Debbie Carrara 5901 Falls of Neuse Road Raleigh, NC 27609 919-781-1973 debbiec@cc-is.net www.carterglassinsurance.com

Caturano & Company

Jennifer Grossetti 80 City Square Boston, MA 02129 617-241-1412 jennifer.grossetti@caturano.com www.caturano.com

CeilSpray Ceiling Refinishing, Inc. Brian Nolen 18 Lamy Drive Goffstown, NH 03045 800-258-3096 Brian@CeilSpray.com www.CeilSpray.com

Comcast Business Services

Jamie Gersten 500 South Gravers Road Plymouth Meeting, PA 19462 610-405-4135 jamie_gersten@cable.comcast.com htp://business.comcast.com/internet/index.aspx

Direct Capital Franchise Group

Robyn Gault 155 Commerce Way Portsmouth, NH 03823 (603) 433-9476 rgault@directcapital.com www.directcapital.com/apply/dunkinbrands

Diversified Solutions, Inc.

Chrishelle Gavoni 412 Long Pond Road Plymouth, MA 02360 508-746-6995 jkerchgavoni@comcast.net www.diversified-solutions.com/dsi_dd.html

DTT Surveillance

Mira Diza 1755 North Main Street Los Angeles, CA 90031 800-933-8388 mdiza@dttusa.com www.dttusa.com 8

INDEPENDENT JOE • DECEMBER 2010

Duro-Last Roofing Jim Schriber 525 Morley Drive Saginaw, MI 48601 800-248-0280 jschribe@duro-last.com www.duro-last.com

Fast Track 2+2 Drive-Thru Timer Mike Pierce 3500 West Moore Ave. Ste. M Santa Ana, CA 92704 714-850-1320 mike@phaseresearch.com www.fasttracktimer.com

FireKing Security Group Rick Uren 101 Security Parkway New Albany, IN 47150 800-457-2424 ricku@fireking.com www.Fireking.com

Glacial Energy

Eric Nickulas 24 Route 6A Sandwich, MA 02563 Local: 508-833-3500 Eric.nickulas@glacialenergy.com www.glacialsales.com/dunkindonuts

Hirshon Associates, H & H Properties and Franchises

Stephen Hirshon or Andrew Hirshon 425 Broadhollow Road Melville, New York 11747 Email- Hirshonrep@aol.com “A Member of Franchise Pros”

Hi-Tech Sound

Gary Hanna 53 Brigham Street Unit 8 Marlborough, MA 01752 508-624-7479 gary@hitechsound.com www.hitechsound.com

HME Drive-Thru Timer Systems

Lisa Jokinen 14110 Stowe Drive Poway, CA 92064 858-535-6085 ljokinen@hme.com www.hme.com

HS Brands International Michael Mershimer 500 Myles Standish Blvd Taunton, MA 02780 800-723-1150 mike@mershimer.com www.hsbrands.com

Directory of Sponsors IKMS Group Inc.

Cliff Pratt PO Box 6221 Manchester, NH 03108 603-644-4683 ctp@ikmsgroup.com www.ikmsgroup.com

iTech Digital

Natalie Himmel 4287 W. 96th Street Indianapolis, IN 46268 317-704-0440 ext. 104 natalie@itechdigital.com www.itechdigital.com

James P. Ventriglia, CPA, Inc. Jim Ventriglia 145 Phenix Avenue, 2nd Floor Cranston, RI 02920 401-942-0008 jimv@jpvcpa.com www.jpvcpa.com

Jarrett Services ATM, Inc. Eric Johnston 1315 Stelton Road, Piscataway, NJ 08832 732-572-0706 ej@jarrettforcash.com www.jarrettforcash.com

Jera Concepts

Wynne Barrett 17 Fruit Street Hopkinton, MA 01748 508-686-8786 wynne@jeraconcepts.com www.jeraconcepts.com

Joyal Capital Management Franchise Development Daniel Connelly 50 Resnik Road Plymouth, MA 02360 508-747-2237 dconnelly@joycapmgt.com www.jcmfranchise.com

Law Office of Carmen D. Caruso, P.C.

New England Repair Service

Carmen D. Caruso 77 West Wacker Drive, Suite 4800 Chicago, IL 60601 312-377-7761 cdc@cdcaruso.com www.cdcaruso.com

Lisa & Sousa Attorneys at Law

Paris Ackerman & Schmierer LLP

Macdonald Restaurant Repair Service

Paris-Kirwan Insurance

Carl Lisa, Sr. 5 Benefit Street Providence, RI 02904 401-274-0600 clisa@lisasousa.com www.lisasousa.com

Mark & Debi Macdonald PO Box 61/ 83 Pond St Norfolk, MA 02056 508-384-9361 debi@macdonaldcompany.com www.macdonaldcompany.com

New England Acquisitions Jim Calash 7 Babcock Street Pawcatuck, CT 06379 860-235-1344 Papijoe2002@sbcglobal.net

New England Drive-Thru Communications

David Paris 101 Eisenhower Parkway Roseland, NJ 07068 973-228-6667 david@paslawfirm.com www.paslawfirm.com “A Member of Franchise Pros” John Mulcahy 1040 University Avenue Rochester, NY 14607 585-473-8000 johnm@paris-kirwan.com www.paris-kirwan.com

Partyka Isuzu

Craig Judge 200 Skiff Street Hamden, CT 06415 860-281-4117 cjudge@partykatrucks.com www.partykatrucks.com

Sponsors continued on page 17

Angela Bechard 12 Wildwood Road Auburn, NH 03032 888-966-6337 angela@nedrivethru.com www.nedrivethru.com

Zarco Einhorn SalkowSki & Brito, pa

Franchisee Attorneys

KK Insurance Agency

Kiran Sondhi 541 Broadway Long Branch, NJ 07740 732-870-1500 info@kkinsuranceagency.com www.kkquote.com

Jerry Brown 100 Charles Street Malden, MA 02148 781-873-1536 jerry.brown@necoffeeco.com www.NERepairService.com

100 SE Second Street 27th Floor Miami, FL 33131

www.zarcolaw.com CONTACT:

Robert Zarco, Esq. • Robert Salkowski, Esq.

305-374-5418

DDIFO does not endorse or recommend any commercial products, processes, or services. A sponsor on DDIFO’s Web site is paying to advertise, it is not to be considered a product or service endorsement by DDIFO. DDIFO does not endorse organizations and does not endorse products or services that such organizations may offer. Furthermore, DDIFO does not control or guarantee the currency, accuracy, relevance, or completeness of information provided by sponsors in their advertising.

DECEMBER 2010 • INDEPENDENT JOE

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60 Years of Dunkin’

by Brooke McDonough

A Look Back on Rosenberg’s Dream with Early Franchise Owner George Carras The Dunkin’ Donuts story begins long before William Rosenberg opened the famous donut store in Quincy, Massachusetts, that started the empire.

During the 1930s as an employee at New England Vending Sales Company, Rosenberg learned a valuable lesson about sharing that would one day set the course for what was to come.

It turns out that his boss and early mentor, Harry Simberg, was “tight with his money,” as Rosenberg writes in his memoir, Time to Make the Donuts.

And that made quite an impression on young Rosenberg.

and he knew a good thing when he saw it.

And, because of Rosenberg’s commitment to share, Carras, like many Dunkin’ Donuts franchise owners, was able to grow his own network, owning several stores in the Boston area through the 1960s, ‘70s and ‘80s before he retired.

“Bill Rosenberg was an honest man,” Carras said. “He wanted to have a quality product, good service, and a clean store, all for a value to the customer. That’s how you have success.”

talks about donuts: “They were made with such care. We made the mix by hand, with the best ingredients, and we hand cut each donut. They were the best donuts around. People loved them.”

Rosenberg’s Somerville store was across the street from the Ford Motor Company and included a 10,000 foot parking lot. He designed the store like the one in Quincy with a counter stools –Rosenberg was the first to put seats in a retail donut store so customers could either eat in or take out.

Carras worked in Somerville and then in Porter Square as a manager, where he was selling about 350 dozen donuts a day. He worked diligently for 14 years in total before he eventually bought the Somerville store.

“Consequently, I learned to do just the opposite: to share,” Rosenberg wrote. “He taught me a lot of lessons, but the most important one was to share with people.

That’s why I’m passionate about franchising and the International Franchise Association, which I founded in 1959.”

That lesson on sharing has been making dreams come true for Dunkin’ Donuts franchise owners for 60 years. It is a fitting tribute at the end of the 60th anniversary year to look at the story of one early franchise owner, whose true rags-to- riches story mirrors the story of many Dunkin’ Donuts franchise owners.

Carras was part of the first franchise training course Rosenberg established.

Sensing the quality in Carras, Rosenberg offered him a sweet financing deal. Carras put down $25,000 of his own money and borrowed $90,000 from Dunkin’ Donuts.

Rosenberg didn’t charge him interest on his loan.

Olga Pithis prepares a deposit in 1972 at her dad’s Porter Square store.

George Carras recognized Bill Rosenberg’s spirit of generosity and savvy business sense when he was first hired as a donut maker in Rosenberg’s second Dunkin’ Donuts store in Somerville, Massachusetts.

From then on, the two men’s fortunes became intertwined. Like Rosenberg, Carras didn’t have much more than an elementary school education. He came to this country from the village of Agia Paraskevi from the island of Lesvos, Greece in 1954 with two important skills: He wasn’t afraid of hard work, 10

INDEPENDENT JOE • DECEMBER 2010

Carras was 28 when he landed his first job at Dunkin’ Donuts, working from 10:00 at night to 6:00 in the morning, making donuts, which had to be finished early enough to be on display for the first customers.

“Bill appreciated my work. He knew that I could make money. He was fair and he was a good man,” Carras said.

A sign in the store window set them apart from the competition: Just Made—Handmade.

To his credit, Carras said that he didn’t have any qualms about jumping into franchise ownership at a time when franchising was at its infancy. He knew that this new opportunity was worth taking a risk on. He said that Rosenberg was a visionary predicting that Carras would be able to grow his business at least 10% a year.

Carras remembers Rosenberg as a stickler for quality, a value Carras emulated, which becomes evident when he

“He predicted that more people would want to eat breakfast outside of the house,” Carras said, which, of course is

60 Years from previous page exactly what happened. People became mobile and eating on the run became the norm. Rosenberg and his early franchise owners were poised to take advantage of that.

But being a success in the food industry doesn’t only mean having insight into customer’s habits. In the past 60 years, many trendy franchises have come and gone. Carras credits Rosenberg’s core values as the key to the Dunkin’ Donuts franchise success: quality service, cleanliness, and value.

Even when he was selling coffee from the back of his canteen truck, Rosenberg sold only the best—the same coffee that was being brewed in the finest hotels in Boston. His competition was selling a lesser product for five cents a cup; Rosenberg charged 10 cents in order to not skimp on the quality.

Parked outside of the Gillette Company, Rosenberg offered free samples of his coffee to attract customers. The rest is history. Customers loved Rosenberg’s coffee, and along with a following of loyal customers, he received a contract to sell products on the property.

That type of commitment to quality was something Carras said he could believe in.

In fact, Carras is so committed to the quality of Dunkin’ Donuts coffee that even in his retirement it’s the only coffee he will drink. That means, he said, when he vacations on St. Martin, he packs bags of coffee in his suitcase.

“The coffee was the best. The quality of the donuts was high. The price –you couldn’t beat it. It was a good breakfast for people,” Carras said, and remembered how Rosenberg taught him to dump the pot of coffee after 20 minutes.

“Rosenberg believed that you give people what they want: a good value. I learned from him.”

After finding success in the Somerville store, Carras bought the Porter Square store in a partnership with Maury Epstein, one of Rosenberg’s early associates. While Rosenberg continued to expand and create more franchising opportunities, Carras worked hard to make his shops profitable, adopting the “customer is always right” mentality that Rosenberg instilled.

One Call. One Vendor.

Endless Solutions.

Customers lined up for Carras’s donuts and fresh coffee during Boston’s Blizzard of 1978. Carras’s was the only business open in the neighborhood for days. (see cover photo) Carras’s Porter Square store was the first Dunkin’ Donuts to reach one million dollars in sales.

By this time he was no longer making the donuts—unless the baker couldn’t make it in, which he said happened frequently enough. In 1978, when the city of Boston was crippled by a major blizzard, Carras spent three days in the Porter Square store, making donuts and fresh coffee for the emergency workers and neighbors. He slept those nights on flour bags in the basement, determined to keep the store open for his customers.

“He was the only one serving food for days in that area. The emergency workers were so grateful,” his daughter, Olga Pithis, said. In fact, after the third-straight day, the Boston police drove Carras home so he could shower and sleep, and then drove him back to the shop the next day.

60 Years continued on page 14

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SINCE 1989 DECEMBER 2010 • INDEPENDENT JOE

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Campuses continued from page 5 Right from the start, Doyle has been involved with the campus, sponsoring the orientation programs and donating to clubs. At a recent presidential luncheon on campus, Doyle approached the director of Residence Life to learn about any upcoming events and to see how Dunkin’ Donuts can fit into those. “Little things like that go far,” Doyle said.

Assumption is just as thrilled to have Dunkin’ Donuts on campus as Doyle is to be there. “We believe Dunkin’ Donuts is a good fit for Assumption College and provides a nice alternate for our students. We are also pleased that the operators are Assumption alumni,” said Robert Ravenelle, dean of students.

Just as a standard street shop would sponsor the local little league team, Doyle said that the successful campus stores should appeal to students. “It’s understanding and knowing your customer that gets you ahead.”

In fact, Doyle attracted customers to the grand opening of the Assumption store this October by raffling off an iPad. He also parked a branded Hummer out front, and brought costumed characters to the student center for product giveaways and coupons.

“Students loved it,” said Doyle who wouldn’t think of giving away IPads at his other locations. Each store calls for different strategies, he said. “You have to entertain that environment.”

The Dunkin’ Donuts at Penn State is fitting into the campus life as well. When the Nittany Lions football team is playing at home, the population swells and University Park becomes the third largest city in the state.

That’s why the Dunkin’ Donuts on West College Ave is “propped out” in team colors, white and blue, with team logos, said Pete Waldron, Vice President of Marketing of Wildcat, LLC. The franchise owns several Dunkin’ Donuts throughout State College and Central Pennsylvania.

A recent popular promotion at the Penn State stores features the teams muchloved football coach Joe Paterno. The local Dunkin’Donuts stores sell “We Love Our Joe” commuter mugs for six dollars.

Customers get free coffee with the mug and part of the proceeds goes to the Special Olympics Pennsylvania. Penn State 12

INDEPENDENT JOE • DECEMBER 2010

students and alumni “loved their Joe” so much last year, the franchise owners repeated the offer during this season.

Another move to attract attention of PSU was the “Eat Your Vote” campaign, during the 2008 presidential elections. Students could choose between a red-sprinkled donut for John McCain, or a blue-sprinkled one for Obama, casting their “vote” either way. Undecided voters could buy a combo red and blue-sprinkled donut. The franchise owners worked with the students’ campus political groups to organize the idea.

“It created a lot of publicity,” Waldron said.

We keep looking for ways to foster the relationships with the students and the alumni.”

Hayley Coen, a sophomore at Bryant University, said that she leaves for her morning classes 20 minutes early even though it’s only a three-minute walk to class. Her mission: to grab an ice tea at Bryant’s new campus Dunkin’ Donuts before class.

strong. The Bryant store is particularly busy in between classes, so Blau’s crew keeps an eye on the schedule. His staff is already getting to know the customers by name.

“It helps to be blessed with a really good crew,” he said.

Another difference is the payment system.

Colleges typically have a meal plan system where a portion of the money is allotted to the main cafeteria, but parents and students can buy additional points (or Bulldog bucks as they are called at Bryant) to be used around campus.

“It’s a huge part of business,” said Doyle, and an important detail to work out early in the negotiations with the college. His WPI store originally didn’t accept the campus money, but after switching over, the store vastly increased its business.

“It’s worth leaving early. Everyone does it, and they love having the store right on campus,” Coen said. “It’s fast, easy, Lines have been out the door at the new Dunkin’ Donuts at cheap, and good.” Assumption College in Worcester, MA. Indeed, the new Bryant campus Dunkin’ franchise was an immediate hit. Students were lined up on day one, according to Jerry Blau, director of retail operations Coppage Management.

As a tie into campus life, a “Bryant Runs on Dunkin’ ” sign gives the store a strong sense of campus pride that students love.

Blau often sees students posing for photos under the famous slogan.

The big difference in a campus store, according to Blau, is the captive audience.

“You don’t get transit traffic,” he said. “Almost all of your customers either work or go to school at Bryant. That is why being involved is important. ” Like any other restaurant, Blau said, the key is making sure you’re operationally

“Students don’t carry cash,” Doyle said.

“We have to be able to accommodate that.”

Students’ tastes may run a bit differently than what franchise owners have seen in their other stores as well. Vinny Leo was surprised by the amount of iced coffee students were ordering at his Bentley College campus store.

“The younger people drink iced drinks all day, and all year round,” said Leo who admitted that he couldn’t keep enough ice stocked in the store. Once they worked with the college to share ice with other vendors and found space for a new freezer, they were in business.

The Bentley store is right in heart of the campus, and business is brisk all day exCampuses continued on next page

Campuses from previous page cept in between classes. That’s when they get “slammed.”

“You can get a line of 25 people in a matter of seconds,” Leo said. “They all come at the same time, at the last minute, right before class starts.”

At the Bentley store, weekends are popular too, with students coming back for more iced coffee, bagels, and breakfast sandwiches. “Students are into healthy

Penn State University’s “We Love our Joe” mugs were a big seller at the campus Dunkin’ Donuts.

ers work directly with the college’s food service management company (or contract feeders). Chris Prazeres was in close contact with Bon Appetit when opening his store this year Roger Williams University (RWU).

The already popular RWU Dunkin’ is a self-service style shop inside a new dorm.

The location is great because the dorm is close to the parking lot so there are both on-campus and off-campus students and faculty going by the shop every day.

Penn State’s “Eat Your Vote” campaign was done in conjunction with student government organizations on campus.

choices. They like the egg white sandwiches, and love the bagels,” but we don’t sell many donuts. If I order 90 in a day, I end up tossing 40,” Leo said.

With campus stores, often franchise own-

The challenge is the small space. Prazeres trained Bon Appetit employees on how to brew coffee and monitor temperature controls. “It’s important to keep up the high standards,” he said.

By continuing to build a relationship with the college and the food service company, Prazeres hopes to expand to other parts of campus. “Once you get your foot in the door, you can the build relationship and then expand,” said Prazeres, whose family has owned Dunkin’ Donuts stores since 1989.

Visit us at

Booth D5

Dunkin’ Donuts APOD (Alternative Point of Distribution) team helps develop campus stores, and Doyle worked with them closely. “The APOD team works with food service companies across the country, so they gave me insight on how to manage the process and the build out.”

Doyle’s partner, Robert Branca, is an attorney and franchise owner with experience dealing with the food service providers at universities and other institutions. He said that setting up college campus stores can be more complicated than the typical franchised restaurant.

“The contract feeders have very specific ways of doing things, which aren’t necessarily in compliance the franchisor recommendations.”

“We have to find solutions in our contract negotiations that are win-win,” Branca said. “It’s important to get Dunkin’ Brands to permit certain variations in equipment and product, and franchise owners also have to protect themselves against a break-up in the relationship between the university and the contract feeder.”

In the end, a direct contractual relationship with the host university is best, and being a contributing part of the campus community goes a long a way in getting that established.

“It is a balancing act, but it is well worth it,” Doyle said. “We want these students to choose to be our guests in our other shops after they graduate, and we don’t see a better way to get that done.”

Although each campus store is unique and the relationships franchise owners foster vary, one thing they agree on—being part of the campus is fun.

“The energy is amazing around campus.

We feed on that energy,” Waldron said.

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This year, at Penn State’s homecoming weekend, the Dunkin’ Donuts mascot coffee cup marched down the parade route to the West College Avenue store. Fans were cheering and taking photos. Many followed the mascot back to the store.

At times like these, Waldron peeks down the street to the nearby Starbucks, and notes that the lines are smaller and that there are fewer customers, which proves that the promotions and hoopla do pay off.

Or maybe, it’s just that the college campus crowd simply prefers to run on Dunkin’.

DECEMBER 2010 • INDEPENDENT JOE

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60Years continued from page 11 Running the stores became Carras’ life and, as was the case with many early franchise owners, it also became a family business. His wife, Betsy, was the company’s bookkeeper, and Carras enlisted his daughters for weekend and summer help.

Pithis, remembers working as a teenager alongside Robert Rosenberg, Bill’s son. According to Pithis, Bill Rosenberg wanted his son to learn about the company from the bottom up. She remembers the younger Rosenberg as a college student frying donuts at the Porter Square store. Robert Rosenberg then served as CEO of Dunkin’ Donuts from 1963 until 1998.

She also remembers that growing up in the Dunkin’ Donut’s life meant crazy hours for her parents and lots of hard work. “It was an education on how to run a business, how to serve people, how to manage and how to sell,” Pithis said.

Despite the hard work and long hours she knew were ahead, she agreed with her husband, Steve, when he decided they should follow in Carras’ footsteps and become franchise owners themselves in 1979.

Steve Pithis, who graduated as a waste management engineer, saw the continued potential in Dunkin’ Donuts franchises, and they opened three shops in Boston with their partner Peter Vorvis that are still in operation today. Olga’s sister Cathy is involved in the family business as well.

There have been many changes in the stores over the past 60 years as the company grew into a world-recognized, 21st century brand. The numbers tell the story best. There are now 6,395 stores in the United States and 2,440 internationally.

As Rosenberg once predicted, customers become even more mobile.

The counter stools have given way to drive-through and convenience locations. Bagels and flat bread sandwiches outsell the famous donuts in many locations. And coffee comes in a variety of temperatures and flavors.

Although she admits that it was amazing to be a part of the growth, Pithis is nostalgic about the company’s past.

“Back then you opened a shop and you worked in it. If you worked hard, you did 14

INDEPENDENT JOE • DECEMBER 2010

well,” she said. “A family could make a good living.”

Today’s model is different, she explained, “Now you buy two or three shops—or even more—and you have someone else running them.”

Today’s fast-paced business is more complicated than in her father’s day, Pithis said. “Now everything is computerized.

There’s so much more equipment and expenses are much higher.”

But Rosenberg’s legacy and Carras’ lessons of hard work still apply today to Pithis’ business. For example, although her stores have computerized systems that allow customers to complete online surveys about their service, Pithis finds her father’s generation’s practice of simply talking to her customers is just as effective.

Every day either Pithis, her husband or Vorvis check into to make sure the stores are running right.

“I like talking to our customers,” Pithis said. “If they’re unhappy, they’ll let me know. But, for the most part, I find that they’re satisfied.”

Rosenberg and Carras remained friends their whole lives, and Rosenberg at60 Years continued on next page

60 Years from previous page

Immigration continued from page 3

tended Pithis’ wedding. “He was a smart man,” Pithis said about Rosenberg, “He knew how to please his customers and give them what they needed.”

a dream that I could finish my education then find a job that paid enough to support me and my family. I felt like this is it. This is my new home and it truly is heaven on earth.”

Achieving a dream is never easy, as Rosenberg said in his memoir. And the definition of success can be nebulous.

But, Carras, without a formal education, was able to send his four daughters to top colleges. He also set up trust funds for his grandchildren. He’s now retired in Naples, Florida, with another house on Cape Cod, and he vacations in the Caribbean with an occasional jaunt back to his roots in Greece.

As far as success and dreams go, he’s pretty satisfied.

“Those days were happy days,” Carras said. “I was a lucky man to be part of Dunkin’ Donuts. I came to this country with no education, and I appreciate what this country and what Dunkin’ Donuts has done for me.”

Here’s to sharing dreams and to the next 60 years at Dunkin’ Donuts.

L-R: John Salema, Carlos Andrade, Maria Dos Anjus Andrade Batista and John Batista behind the counter of the Worcester, MA store: 1981

Virani says operating a Dunkin’ Donuts franchise was hard work. “You need a lot of help from family members and I was lucky enough to have that.”

He says the long hours were worth it

because the business enabled him to provide for his family.

At the Immigrant and Integration Conference, Massachusetts Governor Deval Patrick noted that 61% of all new businesses created in Massachusetts in 2008 were started by immigrants.

Experts believe the future evolution of the U.S. economy will be influenced by immigrants starting new ventures.

There are over 34 million legal immigrants in the United States and many of them come here willing to take jobs that American citizens reject.

John Salema, another immigrant from Sao Miguel, says when he first came to the United States he gladly took a job as a night baker. Like Batista, his lack of formal education prevented him from securing certain jobs.

“The reason we got involved in Dunkin’ Donuts was because we were willing to take jobs that people with more skills didn’t want. It was hard work but it was all we had,” said Salema. Today, he says, immigrants still have the opportunities to devote themselves to work and build something for their families.

Immigration continued on page 16

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Immigration continued from page 15 As Egmont points out, many of today’s new breed of immigrants – ones who come here armed with a college education – are able to integrate into some of the nation’s top technology companies.

He points to Genzyme, the Massachusetts biotech firm which has a strong immigrant presence at all levels: from the vice presidents down to the lab workers and food service staff.

surveyed. And, during the boom years preceding the recession (2000 to 2006), immigrants accounted for more than half of all net job growth (5.5 million of 10 million jobs). The picture has darkened a bit during the recession, particularly because of the decrease in construction jobs.

As Batista remembers, once his knowledge of English improved he felt more like an American and was able to quickly scale the employment ladder.

In their case, franchising provided jobs and financial security for them and their extended families. Egmont says franchising still provides a great opportunity for immigrants who can follow a family member that is already established, to take a job and learn the business then branch off on their own. He says immigrants are not just willing but are also able to establish themselves as American entrepreneurs.

In a recent study, the Migration Policy Institute (MPI), a non-partisan, nonprofit think tank, found that America’s immigrant workforce is growing into the middle class. Since 2000, the fastest growth in employment has occurred in middle-skilled jobs, ones that require more than a high school degree but less than a four-year college degree. These jobs typically pay around $30,000 per year.

The study examined employment in four sectors (IT, health care, construction and hospitality). It noted employment growth for immigrants far outpaced the growth rates of American citizens between 1990 and 2006 in the total economy and the four industries

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INDEPENDENT JOE • DECEMBER 2010

For immigrants without proficiency in English, however, access to middle and higher level jobs is a bigger struggle.

It’s not that different from the late 1960’s and early 1970s when Virani, Batista and Salema made their way to the United States and into the Dunkin’ Donuts system.

DDIFO Board Chair Kevin McCarthy addresses the 2010 National Immigrant Integration Conference in Boston

“In America the sky is the limit because of the freedom that you have here.

There’s plenty of opportunity. If you have a dream and you work hard, it can materialize,” said Virani.

Directory of Sponsors continued from page 9

SKAL East, Inc

Larry Dunning 3231 SE 6th Avenue Topeka, KS 66607 785-295-2498 larry_dunning@payless.com www.payless.com

Michelle Meleo PO Box 303 - 31 Eastman Street Easton, MA 02334 800-966-0106 michelle@skaleast.com http://www.skaleast.com/index. cfm?keyword=dunkin

PepsiCo

Sprint

Bryan Gruttadauria 315 Norwood Park South Norwood, MA 02062 781-255-2663 bryan.gruttadauria@pepsi.com www.pepsico.com

Caroline Fedele 3 Van De Graaff Drive Burlington, MA 01803 781-367-1057 Caroline.fedele@sprint.com www.sprint.com/ddifomembers

Performance Business Solutions, LLC

Starkweather & Shepley Insurance Brokerage, Inc.

Payless Shoe Source

Jeff Hiatt 87 Lafayette Road - Suite 11 Hampton Falls, NH 03844 508-878-4846 jdh@revenuebanking.com www.revenuebanking.com

Sabrina San Martino 60 Catamore Blvd.

East Providence, RI 02914 800-854-4625 ext. 1121 ssanmartino@starshep.com www.starkweathershepley.com

R.F. Technologies

Stera-Sheen Brands by Purdy Products Co.

Gary Gerst 542 South Prairie Street Bethalto, IL 62010 618-377-4063 ext. 121 garyg@rftechno.com www.rftechno.com

RPS Legal Solutions

Rupali Shah The Tiger Building 1221 Locust Street Philadelphia, PA 19107 215-320-7510 rpshah@rpslegalsolutions.com www.rpslegalsolutions.com

Royston, LLC

Bonnie Padgett One Pickroy Road Jasper, GA 30143 770-735-3456 ext. 3164 bonnie.padgett@roystonllc.com www.roystonfordunkin.com

Rubiano & Company, CPA’s Daniel J. Rubiano, CPA 5 Austin Avenue, Suite 1 Greenville, RI 02828 401-949-2600 dan@rubianocpa.com

Secure Energy Solutions, LLC Kevin Mattson 12-14 Somers Road East Longmeadow, MA 01028 413-733-2571 ext. 212 kmattson@sesenergy.org www.sesenergy.org

Cathy Morgan PO Box 456 Wauconda, IL 60084 800-726-4849 cathy@purdyproducts.com www.purdyproducts.com

Trust Capital Funding

Mark Wesalowski 132 Adams St. Suite 1 Newton, MA 02458 800-LENDER1 Mwesalowski@trustcapitalfunding.com www.trustcapitalfunding.com

ViewPoint Sign and Awning Bill Gavigan 35 Lyman Street Northboro, MA 01532 508-393-8200 billg@viewpointsign.com www.viewpointsign.com

WDFA Marketing

Jason Fordley 1201 Broadway -Suite 1001 New York, NY 10001 646-240-4880 jasonf@wdfamarketing.com www.wdfamarketing.com

Zarco Einhorn Salkowski & Brito, PA

Robert Zarco, Esq. or Robert Salkowski, Esq. 100 SE 2nd Street - 27th Floor Miami, FL 33131 305-374-5418 rzarco@zarcolaw.com rsalkowski@zarcolaw.com www.zarcolaw.com

SurePayroll

Francesca Zelasko 2350 Ravine Way, Suite 100 Glenview, IL 60025 877-954-SURE francesca@surepayroll.com www.lps.surepayroll.com/Dunkin DonutsPayroll

SureShot Dispensing Systems

Deanna MacKinnon 100 Dispensing Way Lower Sackville, NS Canada B4C 4H2 902-865-9602 ext. 144 dmackinnon@sureshotdispensing.com www.sureshotdispensing.com

Thomas Colitsas and Associates, PA

Tom Colitsas 103 Carnegie Center, Suite 309 Princeton, NJ 08540 609-452-0889 tcolitsas@tcacpa.com “A Member of Franchise Pros”

Thank You

TO ALL SPONSORS, TOGETHER WE KIN I DO IT! DECEMBER 2010 • INDEPENDENT JOE

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A Dime continued from page 7 lie in these two categories, but for this exercise let’s look at different line items for help. Food cost, labor management and loss prevention are real opportunities where effective inventory management, hourly sales labor management, waste tracking, coupon enforcement, and Radiant reports would provide help. Focusing on these and other line items will help to ensure that your teams are looking at all the line items on your P&L statement.

• Uniforms: Review hiring practices with an eye towards reducing turnover within your restaurants. Does anyone above the restaurant manager screen hourly employees before hiring? Are restaurant managers trained to interview effectively? Do you have employee handbooks to include polices? Do you have special days where employees are allowed to wear T-shirts, buttons, etc. to support a local high school sports team or event?

• Worker’s Comp: Does your payroll information match your actual workforce or is your premium based on a labor projection that is not reflective of

18

INDEPENDENT JOE • DECEMBER 2010

your workforce? Do you have an effective accident reporting procedure in place? Are employees given a mandatory drug screening when reporting for emergency care after a workplace accident? Is your restaurant coded properly to receive a lower rate? Is your policy reviewed annually to compare pricing?

• General Liability Insurance: Are your policies reviewed regularly for market comparisons to determine best pricing? Are asset lists current?

• Office Supplies/Postage: Are these items managed against the store budget? Do you have arrangements with local suppliers to gain the best price? Are weekly reports minimized or made electronic to curtail the amount of paper going from store to office and vice-versa?

• Cash Over and Short: Do you have a disciplinary policy in place to manage against a plus or minus $3.00 standard?

• Repair and Maintenance: Does each store have a budget? Are managers required to call for approval before contacting a repair service? Are

contracts in place with specific rules of engagement? Is your network pricing better than the single location market?

Are parts requiring a replacement left as evidence that a part was actually replaced? Are meetings held annually with suppliers to discuss pricing? Is PM a part of your contracts? Are reports generated to compare like stores (age, volume) and repair costs to determine unusual trends? At what point would a repair and maintenance person added to your staff be more cost effective?

• Cleaning Supplies: Is there a budget per store? Does one store use more cleaning supplies than others?

Are items inventoried to determine if there is too much stockpile? Are employees trained on how much cleaning material to use?

• Telecom: Are the least amounts of phone/data lines available for daily operation? Are phones protected against employee personal/long distance calling?

• Utilities: Are utility usage reports reviewed monthly to determine if one location is using more electrical, water A Dime continued on next page

index

A Dime continued from page 18 or gas than another similar location?

Are buying coops considered for practicality? Are restroom lights turned off when not in use? Are leaks repaired immediately? Are sinks filled to a minimal level for water conservation? Are toilets retrofitted to reduce the amount of water at flushing?

• Rent: Have you approached your landlords to discuss potential reduction in monthly rent?

• Pest Control: Are contracts adjusted to coincide with seasonality and summer versus winter?

• Trash and Waste Removal: Are waste pick-ups properly set to maximize container usage? Do you breakdown boxes and cartons and use recycling/conservation methods?

Based on our example and the scenarios above, if our network found an additional $0.10 in EBITDA per customer, the EBITDA would have increased from 10.3% to 12.5% which represents a 21% improvement! This makes the point that franchisees can indeed turn profits literally on a dime.

Independent Joe Advertisers TM

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Lisa & Sousa, Ltd. Attorneys at Law New England Repair Service Purdy Products RF Technologies Zarco Einhorn Salkowski & Brito, PA

Brother, can you spare a dime?

Perry Ludy is a senior executive, business consultant, and author of business books. He is president of Carolina Restaurant Partners LLC d.b.a. Dunkin’ Donuts. Contact Perry at perryludy@earthlink.net.

Join Mission Statement Dunkin’ Donuts Independent Franchise Owners, Inc. shall act in the best long-term interests of its membership, communicating, educating, and cultivating internal and external relationships. Dunkin’ Donuts Independent Franchise Owners, Inc. exists solely for the benefit of its members.

Become a Member Today!

Call 800-732-2706

Or Visit www.ddifo.org DECEMBER 2010 • INDEPENDENT JOE

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