June 2011 • Issue 9
We Communicate, We Educate, We Advocate!
All in A Day’s Work Boston Shop Gears up for Annual Marathon Madness
Profit Building with Perry Former Brand Employees Finding Franchise Success
also isnue Why WiFi? More Shops Offering Free Wireless Internet this is
Why WiFi?
by Linda Formichelli
More and More Dunkin’ Donuts Franchise Owners are Offering Free Wireless Internet to Their Customers You’ve got the great coffee, the snacks, the comfortable seating, even TVs. But your competitors are offering something that you may not be: Free wifi, or wireless Internet connectivity.
benefits outweigh the costs.” Some owners are bundling wifi with other services that require a wireless connection. “If we want to have remote access for security cameras, we need to get a separate Internet connection,” says Ken Blum, who offers wifi at eight of his nine stores in the suburbs of Cleveland and Akron, OH. “I figured once I had that separate Internet connection, I might as well offer wifi.”
Many café-goers stop at Starbucks and other cafés not only to get a cappuccino, but also to hop online to work, study, and play. If the choice is between a Dunkin’ Donuts without wifi and a competitor that does offer it, many people will opt for the wifi hotspot. “If A New Type of Customer you don’t offer it then you are by default forcing those dwellers to look elsewhere Franchises that offer wifi attract scores -- and so it becomes a value proposiof students. For example, D’Alelio has tion game of how much they are worth some stores in college areas around to you and whether you want them to Boston, and students flock to the store experience your competitor,” says James Sinclair of OnSite ConsultPlugged In ing, a restaurant consulting firm that handles many coffee stores for One thing to consider when offering independent operators and chains. Dunkin’ Brands encourages the use of wifi and the pricing for a system-wide discount is being worked out. They also recommend a data filtering service to prevent users of the connection from visiting inappropriate websites. In addition, Dunkin’ Brands is considering wifi-boosting tactics such as a wifi marketing program for franchisees and a pre-designed landing page that will show Internet surfers special offers when they sign on. But for now, franchisees are offering wifi independently.
Dollar Sense Many franchisees who offer wifi are finding that cost is not an issue; connectivity costs about as much for a franchise as it does for a home user. Of course, that adds up quickly if a franchisee owns multiple stores. “You can end up spending $50 to $60 a month in some of the stores,” says Gary D’Alelio, who owns 24 franchises in and around Boston, most of which offer free wifi. “It’s coming down now, but some of the contracts that I have committed to were a little higher. But I think the
free wifi is your electrical outlet situation. “I tried to add a couple of outlets in certain areas so that people can plug into a power source,” says Gary D’Alelio. “If they’re offering free wifi, [franchise owners] need to put in outlets every six or eight feet so that people can plug in their computers and not just be using the battery.” Blum adds, “Our new stores are getting a lot more outlets. Our first two stores had very few outlets, so we get some feedback on that. We’ve made changes to our design inside to add more convenient outlets.”
to access their study materials and surf to their colleges’ online links and tools. Sometimes groups of students come in to study together. And of course, all of those kids are buying food and drinks -after all, who drinks more coffee to fuel late-night cram sessions than college students? Businesspeople are another prime market for Dunkin’ Donuts stores that of-
03 05
Why WiFi? Linda Formichelli
Former Brand Employees Finding Franchise Success Brooke McDonough
07 08 10 19
When Profits Are Electric Perry Ludy
DDIFO Directory of Sponsors All in A Day’s Work Matt Ellis
Index of Advertisers
fer wifi. “The perception is that we used to get all of the plumbers and electricians,” says D’Alelio. “Now we’re getting a mix of businesspeople who come in and will sit down and do their thing. We’re getting a lot of different people that are coming in that we didn’t get before. It’s nice.” The benefit? Steve Gabellieri, who owns four locations in Rhode Island, says that many businesspeople and salespeople are on expense accounts -- so they’re more likely to spend a little more money than the average customer.
A Place to Meet Stores that offer wifi generate a sense of community as people come in not just to dine-and-go, but to congregate, chat, and work. “It gives people a second option for somewhere to be, whether they’re at home or they’re just bored and want to get out,” says D’Alelio. “Or they’ve been in the office for six hours. -- they want a change of scenery, but they still want to be productive.” D’Alelio also sees regulars who come in daily to check up on Facebook and e-mail. WiFi continued on page 18 JUNE 2011 • INDEPENDENT JOE
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INDEPENDENT JOE • JUNE 2011
Former Brand Employees Finding by Brooke McDonough Franchise Success Hard Work and Core Dunkin’ Values Are Key The allure of entrepreneurship is strong. Being your own boss and building a business that you can pass down to your family are ideas ingrained in the American Dream. Add to that the historic success of Dunkin’ Donuts franchises and it makes sense that former executives from the corporate offices at Dunkin’ Brands would be drawn to franchise opportunities. While current employees at Dunkin’ Brands are prevented from having an ownership stake in a franchise, there are many who have left Canton to pursue ownership opportunities. And for those ex-executives, who understand the nuts and bolts of the business, owning a Dunkin’ Donuts franchise can be the optimum situation. But, as some have discovered, having a corporate background doesn’t always guarantee success as a franchise owner. Instead, it seems that a willingness to work hard, put the customer first, and have a core sense of fairness and trustworthiness are what matters most. Randy Plante, who now owns five stores in Waltham, Massachusetts, had a successful career in Dunkin’ Donuts corporate office. He worked in stores in Long Island, NY, which were corporate owned, then in Watertown Mass., increasing sales in the businesses as he moved on. As Tech Advisor at Dunkin’ Brands he opened over 50 stores and changed over more than 20 from one owner to another. In other words, Plante became a corporate expert in opening stores, assisting franchise owners with start up, equipment purchasing, training, and organizing logistical and operational strategies. So when he purchased his first Waltham store in 1988 from Bernie and Claude Dejivekian, he knew he was getting into a good thing. “There was a lot of growth potential at the time,” said Plante. Working throughout New England and New York, Plante saw what he described as a huge cus-
tomer base, “almost like a cult following” and he knew it was a great business to invest in. What surprised him however, is the amount of work it took to run a store. “I thought I could do it all myself,” said Plante, who remembers making the donuts in the wee hours of the morning.
his network, the company changed quite a bit as well. “It was a more physical demanding job those days,” said Plante. “Things are still challenging but in a different way.”
“I left my corporate job, with the company car and the perks and all of a sudden I’m working around the clock, harder than I’ve ever worked before.”
“The good thing about Dunkin’s is that it is always moving forward. The R&D is amazing and the company tries new ideas to stay current.” With that said, Plante still clings to the sound business strategies that he learned from the ground floor up.
Ironically, as a corporate executive, Plante worked with actor Michael Vale, best known as Fred the Baker—the iconic Dunkin’ spokesman—as an advisor ensuring the product in television commercials looked authentic. As a franchise owner, Plante was the one getting up early when it was “time to make the donuts.”
In fact, he found that the early store experience as a crewmember gave him a sense of the importance of customer service, and working at Dunkin’ Donuts as a manager taught him the importance of developing good people and treating everyone fairly-- business ideas that are cornerstone of the business Bill Rosenberg built.
But Plante, who had been working for Dunkin’ Donuts since he was 15, washing floors and cleaning counters, is not a stranger to hard work. As he expanded
“Rosenberg would come into the store on Main Street,” said Plante. “He always amazed me with his work ethic and simple philosophy about clean stores,
Franchise Success continued on page 15
Independent Joe ® is published quarterly by DD Independent Franchise Owners, Inc.SM Editors: Jim Coen, Matt Ellis Contributors: Linda Formichelli, Perry Ludy, Brooke McDonough Advertising: Kimberly Margolis • 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 ® and INDY JOE ® are registered trademarks of DD Independent Franchise Owners, Inc. DD INDEPENDENT FRANCHISE OWNERS and DDIFO 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 © 2011 • Printed in the U.S.A. JUNE 2011 • INDEPENDENT JOE
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9 Stores Currently Under Contract
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INDEPENDENT JOE • JUNE 2011
When Profits Are Electric
By the author of Profit Building: Cutting Costs without Cutting People
Why the team approach to profit building is well suited to Dunkin’ Donuts Franchises When it comes to reducing cost in every line of the P&L statement, a team effort will always outperform the individual. Businesses that want to improve their bottom line on a continuous basis must have a constant focus on building profits. The Profit Building Team (PBT) requires the right chemistry and the proper mix of all functions within the organization, because effective cost reduction requires multiple skills and experiences; and functional experts have the depth of knowledge needed to get beneath the surface and ferret out opportunities for cost reduction. Most organizations miss the chance to reduce cost by not including team members from all disciplines within the business. A cross-discipline approach cannot be emphasized enough when implementing a cost reduction strategy. You must include representatives from as many departments as possible to create a wide knowledge base. Each representative brings his or her unique perspective to the table, along with specialized knowledge and talents. Think about it. You are creating a team of experts with inside knowledge on how the business operates, immediate acquaintance with its past and present performance, and priceless instincts about what methods would work best. In addition, rather than in just one or two areas, you have a whole company from which to draw profit improvement ideas. Small cost reductions in one or two areas will have little effect, but small reductions in every area of the business can translate into substantial savings. A key point to remember is that managers have a tendency to “put the blinders on” as they go about their daily duties. Absorbed in their own world,
they become oblivious to the activities of other areas of the business that may affect their own productivity. Following their daily routine, they may also fail to consider changes within their area that could increase efficiency or cut waste. Just as it is easier to recognize someone else’s faults than acknowledge one’s own, a team member from a different part of the business may be quick to notice when someone else has become blind to a problem that exists right under his or her nose. PBT mem-
Effective cost reduction requires multiple skills and experiences bers quickly become blind-spot experts. This, coupled with their complementary skills and out-of-the-box thinking, leads to a team that is innovative, creative, and covers the possibilities for cost reduction in every major part of the business. This sort of team interaction is fundamental to the success of the Profit Building Process. Recently, I had the opportunity to watch the Profit Building Process in action. It started as a typical discussion about cost cutting where the restaurant owners exchanged their thoughts about labor scheduling, food cost control and marketing costs when someone from Human Resources, attending the monthly financial review for the first time, simply asked “Have you looked for ways to reduce your utility costs?” Of course what followed was the operator’s comment that they had already addressed that area by making sure that restroom lights are turned off when not in use and the thermostats are always set to one temperature. The HR person responded by saying, “Those are good
steps, but what I was referring to was looking at ways to either cut the cost of each kilowatt hour and or reduce the number of kilowatts used monthly.” He had just opened a new avenue for cost reduction with a simple question. It turned out that the spouse of the HR representative worked for a utility consulting firm specializing in helping businesses reduce their electric and natural gas costs by partnering with utility suppliers. Those conversations led to identifying another organization that had just introduced a breakthrough device for commercial refrigeration and both eventual strategies led to a pilot project which is currently tracking towards a 25% reduction in utility costs. This situation would have not happened if the HR person had not been invited to the cost reduction meeting, thus making the point to assemble a team with cross-discipline, complementary and cross-sectional skills to look at cost control. When you do this your team will come up with new avenues to explore for cost reduction and profit improvement.
Profit Building Tips 1. As a result of deregulation in the gas and electric markets, consultants are able to work with businesses to reduce their electric and natural gas costs. Check the status of your state, but some of the deregulated states include Illinois, Indiana, New York, New Jersey, Michigan and Texas. In these states, consultants partner with the utility suppliers and provide your business with reduced rates per kilowatt hour and locked in rates on an annual basis. The consultants do not charge your busiProfits continued on page 16 JUNE 2011 • INDEPENDENT JOE
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Directory of Sponsors Absolut Contracting
Bunn-O-Matic Corporation
Duro-Last Roofing
Access Rewards
CareerBuilder.Com
Ecolab
Access to Money, Inc.
Caruso Kaplan LLC
Fast Track 2+2 Drive-Thru Timer
Caturano & Company
FireKing Security Group
Comcast Business Services
GE Capital, Franchise Finance
Direct Capital Franchise Group
Glacial Energy
Steven Bortnick, CPA 405 Northfield Avenue West Orange, NJ 07052 973-736-3333 sbortnick@bederson.com www.bederson.com
Robyn Gault 155 Commerce Way Portsmouth, NH 03823 (603) 433-9476 rgault@directcapital.com www.directcapital.com/apply/dunkinbrands
Bedford Cost Segregation
Diversified Solutions, Inc.
Hirshon Associates, H & H Properties and Franchises
William Lako 4346 Route 27 Princeton, NJ 08540 609-655-0800 blako@absolutlycan.com “A Member of Franchise Pros” Doug Jentzsch 1012 W Beardsley Place Salt Lake City, UT 84119 866-681-2427 dougj@accesscashrewards.com www.accesscashrewards.com Doug Falcone 628 Route 10 - Suite 8 Whippany, NJ 07981 973-599-0600 dougf@accesstomoney.com www.accesstomoney.com
ADP
Jana Abramson 225 Second Avenue Waltham, MA 02454 jana_abramson@adp.com www.adp.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
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 8
INDEPENDENT JOE • JUNE 2011
Frank McAdam 1400 Stevenson Drive Springfield, IL 62703 800-637-8606 Frank.McAdam@bunn.com www.bunn.com
Erica Basso 400 Crown Colony Drive, Suite 301 Quincy, MA 02169 781-453-3581 erica.basso@careerbuilder.com www.careerbuilder.com Carmen D. Caruso 77 West Wacker Drive, Suite 4800 Chicago, IL 60601 312-606-8640 cdc@carusokaplan.com www.carusokaplan.com Jennifer Grossetti 80 City Square Boston, MA 02129 617-241-1412 jennifer.grossetti@caturano.com www.caturano.com 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
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
Jim Schriber 525 Morley Drive Saginaw, MI 48601 800-248-0280 jschribe@duro-last.com www.duro-last.com
Arliene Bird 27 Oak Street Wayne, NJ 07470 973-699-8465 arliene.bird@ecolab.com www.ecolab.com/Businesses/ Mike Pierce 3500 West Moore Ave. Ste. M Santa Ana, CA 92704 714-850-1320 mike@phaseresearch.com www.fasttracktimer.com Rick Uren 101 Security Parkway New Albany, IN 47150 800-457-2424 ricku@fireking.com www.Fireking.com
Ab Igram 201 Merritt 7, 2nd Floor Norwalk, CT 06851 203-229-1885 ab.igram@ge.com www.gefranchisefinance.com
Eric Nickulas 24 Route 6A Sandwich, MA 02563 Local: 508-833-3500 Eric.nickulas@glacialenergy.com www.glacialsales.com/dunkindonuts
Stephen Hirshon or Andrew Hirshon 425 Broadhollow Road Melville, NY 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
Directory of Sponsors HME Drive-Thru Timer Systems
Kensington Company & Affiliates
HS Brands International
KK Insurance Agency
IKMS Group Inc.
Lisa & Sousa Attorneys at Law
Payless Shoe Source
iTech Digital
Macdonald Restaurant Repair Service
PepsiCo
Brady Campbell 14110 Stowe Drive Poway, CA 92064 858-535-6034 fax: (858) 535-6060 bcampbell@hme.com www.hme.com
Michael Mershimer 500 Myles Standish Blvd Taunton, MA 02780 800-723-1150 mike@mershimer.com www.hsbrands.com Cliff Pratt PO Box 6221 Manchester, NH 03108 603-644-4683 ctp@ikmsgroup.com www.ikmsgroup.com Natalie Himmel 4287 W. 96th Street Indianapolis, IN 46268 317-704-0440 ext. 104 natalie@itechdigital.com www.itechdigital.com
David Stein 185 Roslyn Road Roslyn Heights, NY 11577 516-626-2211 office 718-490-2218 cell kstein@kensingtoncompany.com www.kensingtoncompany.com Kiran Sondhi 541 Broadway Long Branch, NJ 07740 732-870-1500 info@kkinsuranceagency.com www.kkquote.com 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
Paris-Kirwan Insurance 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 Larry Dunning 3231 SE 6th Avenue Topeka, KS 66607 785-295-2498 larry_dunning@payless.com www.payless.com Bryan Gruttadauria 315 Norwood Park South Norwood, MA 02062 781-255-2663 bryan.gruttadauria@pepsi.com www.pepsico.com
James P. Ventriglia, CPA, Inc.
New England Acquisitions
Performance Business Solutions, LLC
Jarrett Services ATM, Inc.
New England Drive-Thru Communications
R.F. Technologies
Jim Ventriglia 145 Phenix Avenue, 2nd Floor Cranston, RI 02920 401-942-0008 jimv@jpvcpa.com www.jpvcpa.com Eric Johnston 1315 Stelton Road Piscataway, NJ 08832 732-572-0706 ej@jarrettforcash.com www.jarrettforcash.com
Jim Calash 7 Babcock Street Pawcatuck, CT 06379 860-235-1344 Papijoe2002@sbcglobal.net
Angela Bechard 12 Wildwood Road Auburn, NH 03032 888-966-6337 angela@nedrivethru.com www.nedrivethru.com
Jeff Hiatt 87 Lafayette Road - Suite 11 Hampton Falls, NH 03844 508-878-4846 jdh@revenuebanking.com www.revenuebanking.com Gary Gerst 542 South Prairie Street Bethalto, IL 62010 618-377-4063 ext. 121 garyg@rftechno.com www.rftechno.com
Jera Concepts
New England Repair Service
Royston, LLC
Joyal Capital Management Franchise Development
Paris Ackerman & Schmierer LLP
Rubiano & Company, CPA’s
Wynne Barrett 17 Fruit Street Hopkinton, MA 01748 508-686-8786 wynne@jeraconcepts.com www.jeraconcepts.com
Daniel Connelly 50 Resnik Road Plymouth, MA 02360 508-747-2237 dconnelly@joycapmgt.com www.jcmfranchise.com
Jerry Brown 100 Charles Street Malden, MA 02148 781-873-1536 jerry.brown@necoffeeco.com www.NERepairService.com
David Paris 101 Eisenhower Parkway Roseland, NJ 07068 973-228-6667 david@paslawfirm.com www.paslawfirm.com “A Member of Franchise Pros”
Bonnie Padgett One Pickroy Road Jasper, GA 30143 770-735-3456 ext. 3164 bonnie.padgett@roystonllc.com www.roystonfordunkin.com Daniel J. Rubiano, CPA 5 Austin Avenue, Suite 1 Greenville, RI 02828 401-949-2600 dan@rubianocpa.com
Sponsors continued on page 17 JUNE 2011 • INDEPENDENT JOE
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All in A Day’s Work
by Matt Ellis
Boston Shop Gears Up for Annual Marathon Madness If there’s one thing George Alepedis has learned after more than 40 years of Boston Marathons it’s don’t run out of ice. Years ago he remembers, his store at 715 Boylston St. in Boston’s Copley Square—for 18 years the system’s top sales performer—ran out of ice on a warm Marathon Monday when tens of thousands of people cram this section of the city’s Back Bay to see the world’s best marathon runners cross the finish line. In those days George had bags of ice delivered from a nearby vendor. Now, he has three ice machines capable of pumping out 2600 pounds of ice a day. The workhorses have outside compressors so the downstairs baking area doesn’t overheat. George and his team have learned to anticipate anything on the third Monday in April.
Athletic Association sponsors a 5k race. In fact, since the BAA started the Sunday 5k three years ago, it’s made that the busiest Sunday of the year for the Copley store. Customers line up from 8 in the morning until 3 in the afternoon, but Simopoulos says it’s just a warm-up for the main event. “On a normal day we serve around 1100 customers. On Marathon Day it’s over 1500,” said Simopoulos. “We sell more of everything.”
ready for anything.” That can be frustrating, especially when the meteorologists are wrong and the forecast turns out to be nothing like the real weather. Plus, weather can change quickly so, after a cool morning when people want hot coffee and hot chocolate, a warm afternoon finds people ordering cold drinks to stay cool. Another thing Alepedis and his team have learned is that people’s eating habits are a bit different on Marathon Day. “People are inspired to eat healthy that day, I guess,” said Simopoulos.
The most popular food items tend to be bran muffins, low-fat blueberry muffins, multi-grain bagels and whole wheat bagels. Understanding people’s propensity to watch what they Marathon Day is the eat while they watch busiest day of the year runners finish an at the Copley Square exhausting race has store –one of three the helped them refine Alepedis’ family owns; their DCP orders the other two are less over the years. Still, than a mile away at the (L-R) Store manager Abdel Soltany,owner George Alepedis and George there are always Back Bay train station. Simopoulos, director of the three stores. those who want a According to Dunkin; jelly-filled or glazed Brands, that store is in For comparison’s sake: for a typitreat while they watch the race. the top 15 percent of sales throughcal Monday, the Copley Square store out the entire Dunkin’ system, but on “Donuts are still popular for the kids. orders 30 dozen donuts; for Marathon Marathon Day it jumps into the top one The parents come in with them and Day they order 90 dozen. This year, percent. Planning for Marathon Monday they may get a bagel or sandwich for donut sales were up 60 percent; breakbegins in March, preparing schedules, themselves but they get the kids a fast sandwiches were up 100 percent; checking the equipment, watching the donut or two,” said Alepedis. bagels were up 120 percent; bottled weather and doubling up on their DCP drinks were up 150 percent. Because And it’s not just the kids. Kent, a twentyorders. the weather was mild, sales of hot something from Portland, Oregon, who “It takes a lot of practice because we coffee were up 70 percent. Still the ice was waiting for his wife to finish the are getting supplies for three stores and makers were running—cubes stacked race, said he couldn’t resist the Dunkin’ all of them get busier that weekend. We to the tops of the three machines ready Boston Kreme donut. “There aren’t too have to be careful because we don’t for any potential run on iced coffee. many Dunkin’s where I live so I wanted have that much storage space,” said When assignments are handed out to try the Boston Kreme. I don’t have George Simopoulos, director of the for Marathon Day, one employee is on to eat healthy today,” said Kent, who three stores. standby to man the ice machine—asadmitted at home he typically drinks suming the role of ice-scooper for as coffee from that Seattle-based coffee Business starts to pick up over the long as it takes. chain. preceding weekend when runners and tourists arrive in Boston for the Mara“So much of what gets ordered deWalk up and down Boylston St. and thon. Foot traffic is up all weekend and pends on the weather,” said Simopouyou will see people carrying Dunkin’ peaks on Sunday when the Boston los. “It’s hard to predict. We have to be 10
INDEPENDENT JOE • JUNE 2011
Marathon from previous page Donuts coffee cups and bags. Charlie from Louisiana was enjoying a large hot regular coffee. He doesn’t get to drink Dunkin’ Donuts coffee much. “We don’t have these back home but, up here they’re like chicken joints—one on every corner.”
back to the register. Simopoulos says the staff has worked out hand signals to help them communicate when things get really busy and the store gets really loud.
Tom, a former marathoner from California, was hanging out early at the shop biding his time until his daughter would cross the finish line. “I’m excited to see her,” he said while waiting for a bagel and cream cheese. The doors to the 1,000 square foot shop are constantly opening and closing; the line for food and drinks is also constant but moves steadily. Yuri, a Boston firefighter working the Marathon, is a regular customer at this shop but, unlike his colleagues, he doesn’t drink coffee. “I like the food,” he said. To accommodate the steady steam of customers for 8 or more hours, the store doubles its staff. Behind the counter there is more than the average bobbing and weaving of servers moving from the registers, to the hot coffee, to the donut and muffin trays, to the iced coffee and
SINCE 1989
Marathon Day crowds start forming early outside George Alepedis’ Dunkin’ store. The Copley Square shop serves 1500 customers on race day.
By and large, the workers know the drill. Many have been here for 10 years or longer. While Simopoulos and his store manager lend a hand behind the counter, Alepedis perches himself on a stool near the back of the store to watch the traffic flow and help the managers make adjustments. His keen eye, honed after 40 Marathon Mondays, tells him when the barrier dividing the line of customers from those receiving their orders needs to be moved. Even a few feet one way or the other can affect the inevitable bottleneck that occurs at the registers. He can immediately recognize a customer looking for the rest room (they don’t have a public rest room) and he can tell by the ebb and flow of customers when it’s time to give crew members their breaks so they can be fresh and ready for the rush that peaks between 11am and 4pm. “There’s real excitement in the store all day,” said Simopoulos. “The employees get an adrenaline rush and that keeps them going. Everyone’s in a good mood and that makes it fun for all of us.” Maybe the biggest challenge is dealMarathon continued on page 13
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Marathon continued from page 11 ing with customers who are not Dunkin’ regulars and may not know the lingo Bostonians use to order their favorite drink. “Around here a ‘regular coffee’ is served with cream and sugar. But in the South, regular means black coffee. So we have to make sure when a customer says, ‘I want a medium regular’ we know what they really want,” said Alepedis. Something else George and his team have learned over the years is that good customer service matters every day of the year— even when many of the customers are out-oftowners they may Healthy offerings like whole never grain bagels are big sellers on see Marathon Day but kids still enjoy again. a traditional donut. “We have plenty of regulars who come in on Marathon Day and they expect the same kind of treatment they get every other day,” said Alepedis. “We are always focused on customer satisfaction.” It would be easy for George Alepedis to let his managers and employees run it alone on Marathon Day; after all, he has done it every year since 1969. But, sitting with George, enjoying a hot coffee (he still can’t believe people pay to drink “cold coffee”) you get the sense there is no place he would rather be than in the middle of the hubbub, watching the faces of the tourists and the regulars; the cops and the firemen; the counter staff and the managers; and all others who make a visit (or two) to this Dunkin’ shop a part of their Marathon Day. “It’s a lot of fun. We’re working but we feel like we’re involved in the race and if you pay attention, you can hear the people outside cheering.”
Like many early franchisees in the Dunkin’ Donuts system, George Alepedis came to America in search of a new life and new opportunity. He was 27 years old when he left his job as a firefighter in Lesvos, Greece—not yet married and not yet sure what he wanted to do for his life’s work. “After arriving in Boston I got a job at the old Palace of Sweets candy store in Malden Square,” said Alepedis, referring to a location about 8 miles from Copley Square where he has three shops within one square mile.
George Alepedis bought the Copley Square Dunkin’ store from Bill Rosenberg in 1969.
The store was a popular destination in Malden offering hand-dipped chocolates and home made ice cream. Alepedis remembers making 700 gallons of ice cream a week— in 72 flavors. Just four years after coming to America, Alepedis bought a restaurant and candy store in the neighboring city of Everett. Mellon’s Candy had been owned by his uncle but in 1960, it became Alepedis’ first business.
After five years, Alepedis learned to make donuts from a friend who was working for Dunkin’ Donuts and in 1965 he sold Mellon’s to become the manager of the Dunkin’ store in the Porter Square section of Cambridge. His experience as a candy and ice cream maker came in handy but he quickly learned that donuts were a different beast. He admits now he was an excellent donut maker back then and others came to the Porter Square shop to learn his technique. These were early days for Dunkin’. The chain was growing but most stores were still owned by the Rosenberg family. In 1969, Bill Rosenberg sold the Copley Square store to George Alepedis—and the rest was history. At the time, the store had a horseshoe counter and served coffee in cups and saucers. Take out business was tiny; people sat and drank coffee, read newspapers and talked with friends. In those days 2/3 of the store’s 1,000 square feet were designated for sitting; they had two dishwashers to keep up with the volume of dirty cups, saucers and spoons. Today it’s a much different story. The counter came out in the 1980’s; the store was one of the first within the Dunkin’ system to eliminate saucers and begin serving coffee in mugs and in 1989 went entirely to disposable cups. Looking back on his 46 years in Dunkin’ Donuts—Alepedis smiles. He’s built a solid business to provide for his family and he loves coming to work. “It was hard in the old days, working all night making donuts and sleeping on the flour bags in the basement,” said Alepedis. His recollections of the early days sound like those of other long-time Dunkin’ franchise owners. JUNE 2011 • INDEPENDENT JOE
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INDEPENDENT JOE • JUNE 2011
Franchise Success from page 5 fresh product, and most of all putting the customer first.” Tony Pellizzi, who worked for Dunkin’ Brands for 23 years before joining his son Anthony Jr. as a franchise owner in New York, said that there is a huge difference between being a franchise owner and working in the corporate office “You never get to really understand the challenges and the intricacies of running a business. You think you know, but you don’t,” he said. Pellizzi said that as a corporate executive he put together plenty of profitability analysis reports, but until he was actually running a store, he didn’t realize how in depth that analysis has to be. “If you’re short on cash for a month as an owner, you might not be able to pay your electric bill.” You’re more removed in the corporate world, he explained. “The challenge of controlling your costs is easier said than done.” Dave Place, former director of retail operations at Dunkin’ Brands, said that at the corporate level you’re the advisor and consultant. “As a franchise owner you handle the day-to-day issues that make a business. It takes a significant amount of work to make that look easy for the customers.” Place and Plante have combined their efforts to expand and develop the network of stores. “This still is and always will be a penny pinching business. There’s a lot of pressure with food costs rising, and dayto-day management that makes this a challenging business to say the least,” said Place. Pellizzi says that former employees buying franchises is a good thing. “They know the business and you keep people in the family. But it takes a willingness to learn. You have to know that you’re not going to know everything and be ready to learn on the job.” Even if you apply everything you were taught to make a successful store, you can still fail. According to Pellizzi, entrepreneurs, have to be able to react to change, to be flexible, and to adapt policies on the fly. “The training is not always aligned with reality.” Still, Pellizzi and Plante agree, with all of the hard work, being a franchise owner has paid off. “You have to like the busi-
ness, said Pellizzi. To know that nothing is beneath you and that you’re going to have to work hard and be challenged everyday.”
was at the corporate office and has worked with him on a number of boards. Cain said that he is not surprised by Gabellieri’s success as a franchise owner.
Steve Gabellieri, a franchise owner in Rhode Island, is another example of
“First of all, he is a true operator because he grew up in the business and understands it completely.” But there’s more to it than that. Cain said that Gabellieri’s strong character, work ethic, and integrity make the difference.
Franchise owners Dave Place and Randy Plante left Dunkin’ Brands to become franchise owners. The pair own a number of stores.
that. In fact, although he worked in the corporate office for 39 years, entrepreneurship may just well run in his blood. Gabellieri was a vice president of operations when he left the corporate world. In that role he worked closely with franchise owners. The Gabellieri legacy goes way back in the Dunkin’ history. His father, Ralph, one of the original Dunkin’ Donuts employees, helped build the business from the start. So, Gabellieri, who also started as a crewmember when he was in high school, learned lessons about making employees feel respected, giving customers what they want, and being disciplined in management and cost controls. “Those three things,” said Gabellieri, “are the key to a franchise’s success. “It may all sound like common sense but having the discipline to consistently execute and deliver on the promise is the difficult part.” Gabellieri was pleased to discover that the advice he offered franchise owners when he was at Dunkin’ Brands actually worked when he applied those ideas to his own stores. Fundamentals, such as establishing a professional and positive work environment for employees and making the guests feel welcome are paramount to the success of any business. “The ideas have worked better than I thought they would,” he said. “It’s gratifying to see how well you can do by doing the right things.” Jim Cain, a franchise owner in New York, worked with Gabellieri when Steve
Generally speaking, said Cain, not all-corporate people are cut out for entrepreneurship. “The reason why guys like Gabellieri and Plante are successful is that it’s in their backgrounds—they started from the bottom and are basically really hard workers.”
“It’s a tough transition unless you have it ingrained from somewhere in the past,” he said. That knowledge of the business worked for Gabellieri both ways said Cain, who pointed out that as a liaison to the franchisees in the corporate world Gabellieri understood what the owners went though—that made him a better corporate employee as well. “He understood our challenges.” Dave Place also started his long career at Dunkin’s making and finishing donuts after school in a Dunkin’ Donuts in Wilmington, Massachusetts. A job that he thinks gave him the leg up when he applied to the corporate office after graduating from college. “I think they saw the value in the fact that I knew about the business.” Place echoes the sentiments of Plante and Gabellieri and said that customer service is a key to the business. For one reason or another, he said, you don’t always see that. “You always have to maximize your customer’s satisfaction. Once you lose a customer it’s impossible to get that back.” Place, who worked his way up to a director’s position at Dunkin’ Brands was drawn to the idea of running his own business so much so that he left the corporation twice to run franchises. The idea of entrepreneurship won over. “I had worked in the businesses since I was a kid. I know first hand that it’s a great business, and there’s still a lot of potential.” JUNE 2011 • INDEPENDENT JOE
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Profits continued from page 7 ness, but are compensated by the utility providers. 2. Technology is causing rapid change in all aspects of business. Two recent innovations may prove to be beneficial for restaurant owners. The first is a device that monitors food temperature rather than air temperature for a savings of 30 plus percent on refrigeration energy cost. This device changes the paradigm in the way of thinking that setting the equipment to respond to rapidly fluctuating air temperature, as doors are opened and shut throughout the day, the standard refrigeration equipment will respond to food temperature instead, thus reducing the compressor cycles 66% with a 30% reduction in energy use. The second device works to reduce the fan speed when the refrigerator compressor is in the off cycle, reducing the heat generated by the fan inside the refrigerated space. This device helps reduce the energy cost by 20% as used by each compressor. Additionally,
in the deregulated states mentioned above, there are rebates available to the businesses that install this type of equipment. There are many other cost reduction opportunities to be explored in the areas where you do business.
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.
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Thank You to Our Sponsors!
DDIFO does not endorse or recommend any commercial products, processes, or services. A DDIFO sponsor is paying to advertise, and 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. JUNE 2011 • INDEPENDENT JOE
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WiFi continued from page 3 Those businesspeople the wifi is attracting hold meetings at Dunkin’ Donuts too. “If they operate out of their homes, they may not be comfortable bringing someone there to meet, so they’ll say ‘Meet me at the local Dunkin’ Donuts,’ explains Gabellieri. “Then they bring their laptops and you can see them make a sales presentation. So now it becomes a place to meet and instead of getting the one person that has the laptop, you’re getting two customers.”
and I use it when I go there, but it’s not really there for the customers.” Stores with plenty of parking may seem like better candidates for offering wireless than locations with
few spaces or street parking, but Gabellieri doesn’t see it as an issue. “It’s not like you’re going get 10 people at once with their laptops who want to connect,” he says. “It’s kind of spread out through the day.”
Have a Seat
Personal Space If a franchisee is not offering free wifi, it’s often because there are few or no seats in their store. For example, Blum doesn’t have wifi at his one store that has limited seating. And while three of Gabellieri’s stores have wireless, the fourth one does have it but doesn’t advertise it. “Without seats, it really doesn’t make sense to have it,” Gabellieri says. “We actually do have it in the store
It’s not just customers who benefit from wifi in stores. Owner Steve Gabellieri looks on as his General Manager Greg Tetrault uses the wireless internet connection to complete a Restaurant Operations Review. Gabellieri says if franchisees are weighing the cost of installing wifi, they should consider the additional time-saving benefits.
One big concern for most restaurants and cafés that offer wifi is that customers will stake out a table and sit there all day, ordering nothing but a two-dollar coffee and taking up space that could be used by paying customers. “It needs to be understood that by offering free wifi your REVpash [revenue per available seat hour] plummets and by default the seats occupied by those technically loitering become loss leaders,” says Sinclair. “For coffee shops that are looking to remain busy, be a focal point of a community, and create a strong atmosphere, offering it is a must -- just strike out WiFi continued on next page
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INDEPENDENT JOE • JUNE 2011
index
WiFi continued from page 18 a portion of those seats when looking at the KPI [key performance indicator] for turnover.” Most Dunkin’ Donut franchises avoid this issue as most of their business is takeout and the busiest period is early in the morning when commuters pop in for their morning coffee, while laptop users tend to come in later in the day. “We have that morning rush where people are trying to get somewhere,” says D’Alelio. “Later in the day, you see the people coming in and settling down, whether they’re on lunch break or they’ve left their office early and they’re still getting a few things done at Dunkin’. It works.” And even if laptop users are taking up seats all day, Sinclair says that this helps lend a store a busy feel that attracts other customers.
The Bottom Line All the franchise owners we talked to recommended that other owners go for it and join the wifi camp. “If you’ve got a store with seating capacity and you’ve already got a separate connection for your cameras, I think it makes all the sense in the world to do it because the incremental cost is small,” says Blum. “It’s definitely not all things to all people, and I think most franchises know their business, but certainly our experience has been a positive one.”
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