Independent Joe Magazine December 2013 #23

December 2013

The Magazine for D D

Independent Franchise Owners

Issue 23

Destruction Opens

Opportunities

Growth for

The Cain family took Superstorm Sandy as an opportunity to expand and help rebuild the Rockaways IF DD O

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What’s Brewing

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A 25 YEAR “SELFIE” It went viral in short order and was captured by all the major news organizations around the world.

The smartphone self-portrait, or “selfie” as it’s being called, that President Barack Obama took with Denmark’s Prime Minister Helle ThorningSchmidt and Britain’s Prime Minister David Cameron at the South African memorial service for anti-apartheid leader and former South African President Nelson Mandela has been portrayed – rightly so, from my perspective – as an inappropriate and narcissistic action by a world leader.

It seems there are never ending efforts at increasing the taxes that are levied against the income of small business owners. And, there are a number of states that currently apply a different level of taxation on the sales of donuts in a QSR compared to sales in a supermarket. Our goal is to help remedy these inequities by working with state and local governments as well as other pro-business organizations—all with the goal of enhancing your bottom line.

But, politics aside, the idea of the selfie has prompted me to consider how people view DDIFO. As we mark 25 years since the creation of this independent organization (see article on page 8), it is a good time to take a closer look at who we were, who we are today, and who we can and should be tomorrow – an organizational “selfie”, if you will.

DDIFO is fighting local and state government initiatives – like those seeking to ban the use of polystyrene foam or trans fats– that drive up franchisee costs. In communities seeking Styrofoam bans, we are offering alternatives like polystyrene recycling programs, which benefit all without forcing small business owners to bear the brunt of the cost. And, as labor organizers continue pressing QSR employees to join unions so they can fight for an unrealistic minimum wage, DDIFO is working with the Coalition of Franchisee Associations and others to provide a united front against that manipulation and the economic turmoil it will unquestionably foster.

During my travels around the footprint over the course of the past year, I have heard DDIFO described by more than a few of our franchisees as the anti-Dunkin’, an organization that exists as a check or a counter to Dunkin’ Brands. When confronted with that description in conversations with franchisees and others, I dispute it; and will continue to do so as we move into our 2nd quarter century. Instead, I point out that we exist to protect the interests of our members. Over the years, that mission has meant clashing with Dunkin’ Brands – and while it may necessitate a similar approach in the future – such conflict is not the organization’s focus in 2014.

In 1989, the year DDIFO was founded, Ronald Reagan had just wrapped up two terms in the White House. President Reagan worked tirelessly trying to reduce the reach of government into our lives and our businesses. Today, 25 years later, it is quite apparent his efforts fell short. In 2014, government will be even more closely involved in your business. That means this organization will continue to focus its efforts trying to minimize that negative impact and protect its members from the long arm of government intrusion.

For the past quarter-century, DDIFO has been there to defend the interests of its members against a multitude of threats. Even as those threats and the entities creating them have changed, our mission has not. We continue to fight to preserve your ability to operate your businesses successfully and will continue to do so, no matter the specific threat, no matter the origin of the threat, no matter the region of the threat!

It is why we exist, it is where our efforts can most benefit our members and it is what we see when we look at the DDIFO “selfie” – a focused and effective organization with a specific singularity of purpose.

Now, about that Obama “funeral selfie”…

Ed Shanahan DDIFO Executive Director

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SUB HEADLINE

CONTENTS

From the Executive Director: A 25 Year “Selfie”• • • • • • • • • • • • • • • • • • • 1 What’s Brewing: A Look at State Issues Around the Footprint• • • • • 5 An Independent Voice for 25 Years • • • • 8 I FO DD

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Superstorm Sandy Opens Opportunities for Growth in the Rockaways • • • • • • • • • • • 12 New Dunkin’ Redesign Rolls Out• • • • • • • 16 My Perspective: Preventive Maintenance • • • • • • • • • • • • • • • • • 18 Directory of Sponsors • • • • • • • • • • • • • • • 20 Lisa on the Law: The Qualified Franchisee DD Trust • • • • • • • • • • • 24

Joe

Independent •

December 2013 Issue #23 Independent Joe® is published

by DD Independent Franchise Owners, Inc. Editors: Edwin Shanahan, Matt Ellis Contributors: Cathy Cassata, Adam Goldman, Lisa Iannucci, Carl B. Lisa, Esq. Advertising: Joan Gould Graphic Design: Caroline Cohen

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The Magazine for DD Independent Franchise Owners Direct all inquiries to: DDIFO, Inc. 10 First Avenue, Suite 20, Peabody, MA 01960 978-587-2581 info@ddifo.org • www.ddifo.org

Pleas note theat w e h ave moved

DD Independent Franchise Owners, Inc. is an Association of Member Dunkin’ Donuts Franchise Owners.

INDEPENDENT JOE®, INDY JOE®, and DDIFO® are registered trademarks 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 © 2013 Printed in the U.S.A.

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WHAT’S BREWING A LOOK AT STATE ISSUES

AROUND THE FOOTPRINT

By Cathy Cassata Inventory, staffing, making donuts and beyond are all part of your daily routine and work as a franchise owner, so keeping up with laws and regulations that might affect your Dunkin’ Donuts shops can be mind-boggling and time consuming.

Don’t fret. DDIFO works hard to stay on top of matters like minimum wage increases and Styrofoam bans so you can keep to what you know best—making customers happy. Here’s what’s brewing around the states.

Minimum wage protests and increases This fall, unions in several cities organized rallies and wildcat strikes at a number of quick service restaurants calling for increases to the minimum wage. Already a number of state legislatures have approved higher minimum wages taking effect in 2014, which will directly impact franchisees’ operating costs.

According to Dr. Benjamin Litalien, instructor of franchise management at Georgetown University and principal of Franchise Well, a specialized consulting practice in franchising, “These artificial increases basically cause small businesses,

like franchisees, who are in very competitive markets, to take less profit or pass on the cost to the consumer, which isn’t always possible without reducing customer expectation and satisfaction.”

Here is a look at how some key states are increasing their minimum wage: • California $8.00 to $9.00, with another $1.00 an hour raise in 2016.

• Connecticut from $8.25 to $8.70, with another .30 raise in 2015.

• Florida from $7.79 to $7.93.

• New Jersey from $7.25 to $8.25. Voters in the Garden State also approved an amendment to the state constitution to index the minimum wage to the rate of inflation.

• New York from $7.25 to $8.00, with another .75 raise in 2015 and again in 2016.

• Ohio from $7.85 to $7.95.

• Rhode Island from $7.75 to $8.00.

Lawmakers in Massachusetts are proposing a minimum wage increase starting in July 2014 from $8.00 per hour to $9.00 per hour, with automatic $1.00 an hour increases each year through 2016.

By far the highest increase of any municipality is taking place in the city of SeaTac – population 27,000 - the boundaries of which completely envelop Seattle-Tacoma International Airport. Here voters passed what some call the “Good Jobs Initiative,” mandating a minimum wage of $15 an hour for all local workers. Much of SeaTac’s workforce is connected to the airport and includes many minimum wage hotel and restaurant workers.

Dr. Litalien from Georgetown University says any kind of wage control artificially affects the market. “If there are people willing to work for whatever a market rate is, you now have a government agency artificially setting a generic rate that they deem to be reasonable without any detailed or specific data about the work being done or the industry being affected.”

“Artificial increases basically cause small businesses, like franchisees, who are in very competitive markets, to take less profit or pass on the cost to the consumer...”

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Sick leave spreads to Jersey City If you’re sick of the sick leave issue, we apologize, but it’s like a nasty cold that just keeps spreading. Jersey City now joins New York City, San Francisco, Seattle and Portland, Ore. – as well as the state of Connecticut – mandating that employers provide paid sick leave.

The Jersey City ordinance requires employers with ten or more employees to offer as many as five paid sick days a year to employees who work at least 80 hours a calendar year in Jersey City. Employers with ten or more employees, must provide five paid sick days, and for those with fewer than 10 employees, they must provide five unpaid sick days.

“In a free market society, if a person is looking for work and one employer offers them five paid sick days and another offers them none, that’s the individual’s decision about what works best for him or her. The free market should dictate what is competitive from an employment perspective not legislation generically set across a state,” says Litalien. “This is another issue where mandating it may be well-intentioned or sell well politically, but the facts are clear that the small business takes it in margin or the consumer takes it in higher prices.”

Despite opposition from business groups, the city of Newark might follow Jersey City’s lead. On October 29, the City Council voted unanimously to introduce an ordinance that would require

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Newark businesses to pay their workers for time spent at home sick or caring for an ill loved one. The ordinance would mandate that full- and part-time workers in businesses with 10 or more employees earn one hour of sick time for every 30 hours worked, up to 40 hours per year. Workers in smaller businesses would earn one hour of sick time for every 30 hours worked, up to 24 hours annually. Workers with direct contact with the public, including waiters or retail clerks, would earn up to five sick days, regardless of their company’s size, to care for themselves or family members.

Two additional council votes, as well as a public hearing and the mayor’s signature, are required to adopt the measure.

Increase in Maine meals tax In an effort to add revenue and balance to Maine’s two-year $6.3 billion budget, Democrats and some Republicans voted to override a veto by Gov. Paul LePage to raise Maine’s meals tax.

This means that from October 1, 2013, through June 30, 2015, the 7% tax rate on the rental of living quarters, sales of prepared food, and sales of liquor sold on premises will increase to 8%. The general sales tax rate of 5% also increased to 5.5%.

FDA trans fats ban in the works Last month, the United States Food and Drug Administration published a Federal Register notice that partially hydrogenated oils – which create trans fats in food – should no longer be

WHAT’S Photo Credit: Elvert Barnes via photopin cc

BREWING considered safe for consumption because of their link to heart disease. A 60 day comment period is underway, in which the FDA is gathering additional information on trans fats in order to determine whether or not to ban them from food production.

New Hampshire fair franchising In November, a fair franchising bill was filed in the New Hampshire legislature for consideration during the 2014 session. The bill’s public hearing will take place sometime after the New Year, so now’s the time for New Hampshire franchisees to state their support to members of the New Hampshire House. The International Franchising Association (IFA) is already on record opposing the measure, writing in a letter to lawmakers that the measure would “weaken franchisee equity, damage brands, reduce product quality, limit franchisor assistance to franchisees, increase incentives for litigation and jeopardize contract rights.”

DC considers Styrofoam ban When California banned polystyrene cups and food containers, other cities followed suit including, Seattle, Washington; and Amherst and Brookline, Massachusetts. Many others cities like Philadelphia, New York, Boston and Chicago continue to consider a ban. In October, Washington, D.C. Mayor Vincent C. Gray proposed banning foam food containers as part of a legislative package he says, will “make the District of Columbia the healthiest, greenest, and most livable city in the United States.” The legislation bans “expanded polystyrene” in food containers, plates, clamshells, hot and cold beverage cups, meat and vegetable trays and egg cartons. Any business that uses ploystyrene to sell or provide food for consumption on or off the premises will be affected by the ban, including restaurants, grocery stores, food trucks, cafes, coffee shops, cafeterias, and supermarkets.

“As business owners we find less expensive ways to deliver services and products, but if those less expensive ways are ultimately damaging our environment or have other unintended consequences, than we certainly need to give them more thought,” says Litalien. “It can be challenging to be cognizant of our environment and to be cost efficient in our operations. One potentially valuable component of government is to look beyond the free market and at the whole picture.”

The D.C. Council will take up the proposal.

On December 12, Albany, New York County Executive Dan McCoy signed into law the Food Service Waste Reduction Act, which bans the use of Styrofoam containers in all chain restaurants.

DC businesses to foot the bill for transit fees Another component of D.C. Mayor Vincent Gray’s “green” legislative package would require businesses in the District to provide transit benefits to their minimum wage employees.

“The increasing high cost of transportation is a significant amount in the budget of the minimum wage employee, so I can see the good behind paying the fee for their transit costs,” says Marc Yaffe, who owns several Dunkin’ Donuts on military bases throughout Washington, D.C.

However, Yaffe adds that mandating the benefit across the board doesn’t make sense. “It depends on the location of the individual store. In areas where you have a lot of employees living nearby, they might not need this benefit, and an increase in wage, for instance, might better serve them. Employers should be able to choose which benefits make the most sense for their employees.”

As we usher in 2014, it is clear new regulations impacting small business owners in general – and Dunkin’ Donuts franchisees in particular – will emerge. Independent Joe is keeping an eye out for these issues and will continue reporting on them.

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An Independent Voice for 25 Years

By Matt Ellis

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n 1989, there were 1500 Dunkin’ Donuts shops in the U.S., Mister Donut was still an independent company and a “black knight” was lurking at the company’s Randolph, Massachusetts headquarters. Fighting to maintain control from a hostile takeover bid, Dunkin’ Donuts founder Bill Rosenberg steered the sale to the English conglomerate AlliedLyons, which later became Allied Domecq.

As the sale moved into the courts, the judge asked, “What is the franchisee’s position?” In those days – like now – Dunkin’ was primarily a franchised business, but there was no entity that spoke for the interests of its 1500 shop owners.

“A lot of people forget that DDIFO came together at the recommendation of Dunkin’s senior management to have an independent an voice at the time,” remembers long-time franchise owner Jim Cain.

According to its original charter, drafted in 1989, the independent association should, “Promote the interest of the members of the corporation in connection with their ownership of franchises in the Dunkin’ Donuts Incorporated franchise system, and to take further action incidental thereto including: the development of programs and ideas and a provision of educational and other services designed to further enhance the opportunities available to the members within the system.”

As DDIFO General Counsel Carl Lisa remembers, “It was in Dunkin’s best interest to get their arms around [the sale] and be sure the franchisees were in line.”

Now entering its 25th year, DDIFO remains singularly focused on the best interests of its franchisees. Times have

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changed and corporate ownership has changed, but DDIFO remains the only true independent voice for a growing family of franchise owners.

“We are not just set on resolving issues, we are a proactive organization here to steer the franchisee community in the right direction,” says John Justo, who first became involved with DDIFO in the early 1990’s.

He remembers the turmoil in those early times, between franchise owners and the brand’s Market Leadership Council, or MLC—the precursor to today’s Brand Advisory Council (BAC). “The point was to create an avenue of strength among the franchisee community to move the agenda in the right direction, not just where the brand wanted to go.”

In those years, Fred the Baker was an omnipresent face on TV screens; he was the lovable face of a brand that was building an unprecedented customer loyalty base in its core markets. Dunkin’ was emerging as not just a coffee shop, with counter-seating and porcelain mugs, but, rather, as a daily stop for an on-thego society. Coffee sales spiked thanks to increased advertising and promotions— and quality control. As Corby Kummer

wrote in his book, The Joy of Coffee, “When I was growing up in Connecticut in the late ’60s, Dunkin’ was an improvement over most home coffee. The fact that they threw it out after 18 minutes and didn’t let it sit on the burner was, in itself, a giant leap.”

The coffee business proved quite successful for Dunkin’ Donuts and its franchisees, but issues remained. Justo characterizes the relationship between Dunkin’ and its franchisees like this: “Sometimes you’re on a parallel course; sometimes you’re on a perpendicular course.”

According to Lisa, issues in the 1990’s centered on remodeling, territory expansion and the Franchise Agreement. The fact that Dunkin’ was owned by a European interest complicated things, Lisa says.

In a 2009 interview with Independent Joe, Jason Dubinsky, who was the first president of DDIFO and passed away in 2012, recalled how after the Allied sale went through, Dunkin’ management told him DDIFO was no longer necessary because franchise owners were well-served by the existing Leadership Councils.

“We didn’t really know the new owners or what their policies would be. They were in London and we still felt there could

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25TH ANNIVERSARY

DDIFO SPONSOR ADVERTORIAL

While Fidelity Bank became a DDIFO Sponsor just two years ago, members of its leadership team have extensive experience with Dunkin’ Donuts franchise owners. President and Chief Lending Officer John Merrill, and Senior Business Banking Officer Sally Buffum each has more than 10 years experience providing financing to Dunkin’ franchisees.

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“Dunkin’ Donuts franchisees find us knowledgeable and easy to work with,” said Buffum. “Every relationship begins with a LifeDesign discussion designed to help us understand their business, goals and capital needs. We recognize that each network is different and we are flexible in our customization of services for each individual.”

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be a threat to our business interests. We strongly felt that if Dunkin’ was sold once it could very well be sold again,” said Dubinsky. We had no way of knowing who the future owners might be or what their policies might be.”

avenue of y n a e t a e r c as to munit w m t o n c i o e p e s e i Th the franch t direction, g n o m a h t streng in the righ . a d n e g a e nted to go to move th a w d n a r b ere not just wh

“Franchisees felt they were being stonewalled,” Lisa recalls. “MLC bylaws were changed to diminish their power and DDIFO emerged as a viable option to have the voices of the franchisees heard. Franchisees stepped up to fund the organization for the short and long term, realizing the need for a permanent, viable organization with adequate resources.”

“We operated in a spectrum where we made things happen based on conflict. We were in conflict with the brand most of the time,” says Cain, who was involved in the MLC but not with DDIFO in the early 1990’s. He remembers noticing how the independent organization was “running a parallel path and being highly effective.”

What gave DDIFO its strength then is just what fuels it today: capital to invest in legal representation, research, education and publicity. DDIFO was able to apply leverage, which ultimately caused a change in the Leadership Councils. They were reformulated into Advisory Councils run by franchisees and representatives of Dunkin’ Donuts.

Franchisee Duke Carvalho joined DDIFO early on and became its chairman in the early 1990’s.

Today, he takes the long view of the organization as something that franchisees own and as something that helps guide franchisees through the kinds of issues that arise through the normal ebb and flow of a business.

“We’ve had some tough times, but we were able to overcome and we have gained ground.

The commitment was there even in tough times,” he says. “Gathering the best we have under one name benefits everybody.”

Justo, a one-time member of DDIFO’s board, says the history of conflict between Dunkin’ and its franchisees makes the organization as relevant today as it was then. “In the past we were just about the franchisee/franchisor relationship,” centering on issues like terminations, loss prevention and rating systems.

Today, he says, “We are not just an organization set on resolving issues. We are a proactive

organization here to help guide the franchise community in the right direction.”

Perhaps the most intense conflict between Dunkin’ and its franchisees came to a head in September 2009, when news of the company’s loss prevention and termination strategy became public. Franchise attorney Robert Zarco, speaking at a DDIFO meeting in Worcester, Massachusetts, called Dunkin’s loss prevention department a “profit center” which increased revenue during the nation’s economic slowdown. In an article in the Boston Globe, Zarco said, “By far and away, Dunkin’ is the most litigious brand out there.”

The publicity had immediate repercussions at Dunkin’s headquarters. New CEO Nigel Travis was clearly bothered by “the noise,” as one franchisee referred to the negative publicity. “It was driving him crazy.” Travis wrote a letter to franchisees saying, “Dunkin’ Brands has never pursued litigation against a franchisee without clear cause, nor will we.”

That episode brought swift change. Dunkin’ leadership pulled back on loss prevention litigation and began repairing relationships with its franchisees.

Karen Raskopf, chief communications officer for Dunkin’ Brands (DBI) says the company is “extremely pleased with our franchisee/ franchisor great relationship today.” As a publicly traded company, DBI relies on franchisees to invest the capital to drive the national expansion upon which its Wall Street story is based.

“A big part of maintaining our positive relationships is through constant communication and collaboration through our advisory council system,” she says.

Franchisees like Cain and Justo believe that advisory council system today is stronger and more responsive to franchisee needs. “Some franchisees don’t realize how DDIFO created a better advisory system,” says Cain, who is quick to note the positive impact Travis and his team has had on the relationship with franchisees.

Cosby Photo Credit: Quicheisinsane Photopin cc

“Under Nigel’s leadership the brand migrated to become a more operationally driven company, which resulted in both brand folks and franchisees focusing on the core business,” he says.

“The difficult part for franchisees is that you don’t know what you can’t see. Who would have predicted the 2008 [economic] crash or national healthcare insurance? There are more of those uncertainties in our future and DDIFO is there to help guide and protect the franchises in all areas of concern,” says Justo.

“This independent organization is important for the time when Dunkin’ Donuts’ leadership changes and a new CEO comes in with a new vision,” says Cain.

When that happens, Dunkin’ Donuts franchisees will do what they have done since the beginning: carry the flag for a brand that is well-loved, well-respected and well-known.

“At the end of the day we are all better because of what DDIFO does,” says Carvalho. “The better the franchisees do, the better the company does. We have more passion for this brand than most people do in other systems. The pride and commitment is what drives us. I represent the brand but the brand is me.”

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What was going in in 1989 • Toyota launches its luxury brand, Lexus • Gasoline averaged one dollar a gallon • The Dow Jones Industrial Average dropped 190 points on October 13 and closed the year at 2753 • Postage stamp cost 25 cents • Batman was the top grossing movie; Field of Dreams and When Harry Met Sally were also released • The Cosby Show was the top rated TV show; The Simpsons TV show premiered • San Francisco beat Denver in Superbowl XXIV • Oakland and San Francisco played the World Series during an earthquake • Nolan Ryan struck out his 5,000th batter • E xxon’s tanker the Valdez spilled 11 million gallons of oil in Alaska • The U.S. invaded Panama

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Superstorm Sandy Opens Opportunities for Growth in the Rockaways

By Lisa Iannucci

N

obody ever thought it would happen. After all, hurricanes aren’t supposed to hit Queens, New York. But in October, 2012, Hurricane Sandy had a mind of its own. This Category 3 Superstorm became one of the most deadly and destructive hurricanes of the Atlantic season and the second costliest hurricane in United States history, to the tune of $68 million and counting.

At the same time that Hurricane Sandy was beginning to brew, Shaun Cain was in discussions to take over several Dunkin’ Donuts shops in the Rockaways—a peninsula of Long Island that is among the more remote parts of New York City.

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“The previous owner was considering selling prior to Sandy, however, after the storm, he figured that it would not be possible to commence a deal due to the massive damage that his network had undertaken as a result of Sandy’s wrath” says Cain.

It wasn’t good. Sandy’s violent storm surge overwhelmed this thread of land, the extreme eastern end of Queens.

“We braced for cover, but couldn’t do anything about it,” remembers Cain. The storm flooded streets and crumpled buildings.

“The franchisee told me that it was so bad that three out of the five stores were destroyed and would need a complete gut job and all new equipment. They were under six feet of water. We

Cain Management operates 51 Dunkin’ Donuts restaurants. Jim Cain Sr. (center) and his sons, Shaun (left) and Jim Jr. opened their latest shop on Main Avenue in Norwalk in November 2013.

Family business Risk is a common theme in the history of the Cain family business. In 1974, Jim Cain, just 21 years old, purchased a share in his first Dunkin’ Donuts on Smith Hill in Providence—in the shadow of the Rhode Island State House. He had worked for years to save the money and had prepared for his new venture by training in one of the stores co-owned by early Dunkin’ pioneers Manny Andrade and John Henderson. “I learned at the beginning that success in this business is based on a culture of hard work,” Cain remembers.

Business was good and in 1976, with two years’ ownership experience under his belt, a newly married Cain and his wife, Mary, decided to sell their share of the Providence store and take over an existing store 130 miles away on Main Street in Norwalk, Connecticut.

“It was a chance to start a life and a family together. Yes, it was a big risk,” says Cain, who credits Mary as “a central partner in those early years.”

were looking at spending least one million dollars in capital improvement.”

It would be a long road back, but Cain and his family were not prepared to turn the page on this opportunity. The Rockaways would rebound, they believed, and, when it did, visitors and residents would return to pre-storm levels.

Cain took a close look at the properties. “I told him I would buy them for the price we agreed upon before the storm hit and take on the financial burden of rebuilding the stores.”

That was the end of October, 2012. Three months later, Cain closed on the stores. “We took a big risk,” he admits.

Over the next dozen years, Cain increased his holdings to six stores. His two sons, Jim junior and Shaun, eventually moved into the business. Today Cain Management, Inc. (CMI) owns and operates 53 Dunkin’ Donuts locations in Connecticut and New York, with Jim Jr. operating the Connecticut stores and Shaun the New York stores.

Cain recalls the conversation about expansion the family had in 2006. “There wasn’t much opportunity to expand in Connecticut,” Cain remembers. “We knew that in order to grow, we had to move into a new area.”

Dunkin’ Brands was holding the keys for five stores in Queens and the Cains made the deal.

“Queens was risky. We thought it would be just like Connecticut, but it wasn’t,” says Cain. “We learned almost everything about doing business in New York is different—only the brand and products are the same.”

INDEPENDENT JOE

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DECEMBER 2013 13

According to Jim Cain Jr., while the family’s Connecticut stores had regular customers, many of whom drove through on their way to work, the Queens stores drew pedestrians and public transit riders. Also, in Queens, people bought more donuts.

The family was faced with what they called a steep learning curve. According to Jim Cain Senior, “It took 12 months to figure things out. Shaun was living in New York, working the stores and he definitely figured it out.”

Development The New York deal included a development plan to build an additional nine locations in Queens over the next three years. Today, CMI has a network of 50 shops – including a new Norwalk, Connecticut

drive thru

drive-thru location that opened at Thanksgiving – and has started construction on stores number 30 and 31 in Queens.

“Development is 60 percent of my daily business,” Shaun Cain says. So, even as he meets with managers, reviews P-and-L’s with supervisors and monitors current stores under construction or renovation, Cain is always looking around for real estate the family can develop.

Case in point: across from one of the Rockaways’ Dunkin’s, Cain spotted a Wendy’s. It, too, had felt Sandy’s wrath but, like the Dunkin’ shops, it had tremendous upside potential.

“It was on the water; I thought I might as well buy it too,” Cain

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Among the five shops the Cain family purchased in the Borough of Queens is this location at 113-20 Beach Channel Drive in Rockaway Park. Over 100,000 people live in this 11 mile peninsula, just 19 miles from Midtown Manhattan. says. “I told [the owner] I would give him what he paid for it.”

The Rockaways may look and feel like a quiet, seaside community, but it is New York City. Over 100,000 people live along this 11-mile strip that’s a 40-minute train ride to Midtown Manhattan.

“One of the stores was near a train station and captured the subway traffic,” Shaun Cain says. “It was a $3 million dollar drive thru.

The business was already doing well. From a pure demographics standpoint, it was a no-brainer.”

Back to Business By mid-February, Cain’s Rockaways’ stores were all open for business. Shaun Cain says he is proud of how the rebuilt shops look.

One in particular had a parking lot that was badly damaged; it cost $30,000 to fix. “The building was leaking and it was a complete disaster,” he says. “Now it’s the Taj Mahal of Dunkin’s.”

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When the doors opened it was news. The papers covered it, a local radio station broadcast live from one location and former New York Giants linebacker Antonio Pierce made an appearance.

Shaun expected the area would rebuild and people would come back, but he didn’t expect the way the community would respond to the return of the local Dunkin’s.

“The customers were very happy; the community was hit so hard at the time. This brought local jobs back and showed hope,” he says. “The community really loved it!”

Hindsight may be 20/20, but when a business owner makes development a focus of his job by learning about a market, its demographics and traffic patterns, it shouldn’t be a surprise when he makes the right decision about where to expand.

“Sandy created an opportunity for us. You can test the market and the demographics, but you can’t really analyze situations like Hurricane Sandy.”

Just about any real estate developer has had that moment when he’s convinced people think he is crazy to do a certain deal. Cain knows why so many of those visionary deals get done.

“How do you do it if there’s no risk?”

•

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•

DECEMBER 2013 15

New Dunkin’ Redesign Photo Credits: Caroline Cohen

Rolls Out

By Cindy Atoji

W

hen franchisee David McNulty opened the newly redesigned Dunkin’ Donuts on busy North Roosevelt Boulevard in Key West, Fla., he wondered how customers would respond to the brand’s updated look and layout.

The former KFC location had been completely gutted and replaced with Dunkin’ Donuts’ sophisticated and mellow “Fresh Brew” makeover. Instead of a grab-and-go atmosphere with hard, orange plastic chairs and laminated tables, customers found the most radical revamp in seven years—a Starbucks-style, high-end café.

For McNulty, who owns over 30 other stores in Florida and is Dunkin’s Southeast Developer of the Year and a finalist for Dunkin’s National Developer of the Year award, the new look is attracting guests and encouraging them to settle down, plug in, use free Wi-Fi and, in some locations, be informed via flat-screen TVs. “The new image is more friendly to them and they’re not just getting a cup of coffee and getting in the car,” says McNulty who has opened up seven stores in the last year, including units in Fort Myers and Marathon, FL. Comparable-store sales are up five to seven percent over last year, with the new image drawing in not just the usual loyal crowd, but also a new upscale clientele.

Dunkin’ stores were in need of some décor upgrading, according to a 2012 survey conducted by Nation’s Restaurant News and WD Partners. Dunkin’ Donuts tied for the second-lowest atmosphere score among beverage and snack shops, coming in below competitors such as Starbucks, Krispy Kreme, Caribou Coffee and Tim Hortons.

16 INDEPENDENT JOE

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“Registering a better consumer impression is bound to occur after franchises debut the new looks for their restaurants,” says John A. Gordon, DDIFO restaurant analyst and principal and founder of Pacific Management Consulting, who noted that specialty-coffee and fastcasual segments promise higher sales and higher traffic. In the past two years, McDonald’s, Burger King and Wendy’s, among others, have all added more polished, urbane elements to its furnishings; Starbucks has says it will refurbish and improve cafes.

Dunkin’s new design schemes – Original Blend, Cappuccino Blend, Dark Roast and Jazz Brew – are designed to appeal to customers who want to sit and relax while enjoying a cup of coffee and snack.

“Even the most successful brands must evolve to keep pace with changing consumer preferences,” says Gordon.

As older stores are ready for renovations – as dictated in the Franchise Agreements – franchisees will have to choose from one of four approved designs. “Our brand already has a very modern restaurant base, with the average image age being

New and remodeled Dunkin’ Donuts restaurants featuring the brand’s new

design schemes began rolling out nationally in April 2013. Franchisees have opened approximately 90 of the new stores with plans for as many as 600 by year-end, according to Bloomberg News, which reported the cost between $175,000 and $250,000 for a remodel and between $400,000 and $700,000 for new construction.

less than five years. And, our franchisees have completed more than 1,800 remodels in just the past four years,” according to John Costello, president of Global Marketing and Innovation at Dunkin’ Brands. Each Franchise Agreement includes a schedule for refurbishments after five years and remodels after ten years of a shop’s opening Dunkin’s new design schemes – Original Blend, Cappuccino Blend, Dark Roast and Jazz Brew – feature layout and color scheme variations and options in textures, furniture and lighting. Many of the graphics are meant to reinforce the coffee theme, incorporating brown and tan shades that invite sipping and lingering.

New digital menu boards, glass cases displaying croissants and other pastries, as well as more electric outlets for laptops and smartphones are designed to appeal to a professional businessorientated customer base. The trendy décor targets coffeehouse crowd who sits, sips, and surfs – and is more likely to buy a Bacon Ranch Chicken Sandwich and Vanilla Chai at 4 p.m. rather than just a chocolate glazed donut and small regular coffee at 6 a.m.

“Just as we’ve broadened our menu to meet our guests’ demand for more food and beverage choices they can enjoy any time of day, our new and innovative store design and atmosphere is just as ideal for people looking to sit down for a break or to relax with friends as it is for people rushing through a busy day,” Costello said during an event introducing the modernized design last summer.

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David McNulty, the Florida franchisee, says his redesigned drivethru signage and canopies have also improved drive-thru and take-out businesses. “An inviting exterior has helped the image throughout.” Customers are also responding positively to landscaping improvements and exterior menu boards, he added.

Gordon believes Dunkin’ Brands understands the importance of having its franchisees “buy into” the redesigns because they are the ones who pay for it. He suggests franchisees plan for a remodel several years in advance and set aside funds since the brand does not underwrite any of the investment. “Prioritize your stores; think about leveraging the new designs in stores with higher sales volumes; stores in more prominent locations; or where competitors in the same market area are getting a facelift,” he says.

The strategy seems to be working. A Dunkin’ store manager in downtown Chicago – across from a Starbucks – told Bloomberg News earlier this year, “We can compete with Starbucks now.” The manager reported the store serves about 50 customers during lunchtime now, compared with about 15 before it was remodeled.

As a reimaged Dunkin’s penetrate new markets west of the Mississippi with themes like Dark Roast and Jazz Brew, new customers will come to identify the look and feel of these establishments with the Dunkin’ brand. They won’t walk in and notice the redesign because this will be the image to which they are introduced. And that will be a positive asset, says Gordon.

“Consumers are becoming more discerning and we need to stay relevant, contemporary and fresh – hopefully that is what this new image will do for us.”

•

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DECEMBER 2013 17

DDIFO SPONSOR ADVERTORIAL

Thomas Colitsas & Associates CPAs

My Perspective: Preventive Maintenance

Thomas Colitsas & Associates CPAs has been providing accounting services to Dunkin’ Donuts franchisees for about 15 years. Representing nearly every major franchise group for more than 25 years, the firm knows how the franchise industry works and has business dealings with just about every major bank.

With the New Year just around the corner, many begin to think about what resolutions they should make. Last year, I resolved to get my arms around maintenance of our network’s equipment. In my first year as a franchisee, I had my service tech’s phone number on speed-dial. In fact, he probably took his family to Disney just on the money he made rescuing me from what seemed like constant equipment failure.

Colitsas & Associates provides comprehensive tax and financial planning assistance, facilitates financing needs for expansion and holds monthly meetings with franchisees to review financial statements in person. There is no initial consultation fee. With the objective of forming a longterm relationship, the staff are extremely responsive, and the firm bases its fees on individual client’s needs.

“Our firm represents every major franchise group there is, including close to 200 Dunkin’ Donuts stores. When we prepare a financial statement, we analyze expenses in relation to other franchises to ensure costs are in line,” said managing Partner Tom Colitsas. “We are hands-on, and our practice was built from referrals based on the service we provide our clients.”

For more information, visit www.tcapa.com (Princeton Group) or contact Tom Colitsas or Jim Colitsas at 609-452-0889 or tcolitsas@tcacpa.com.

18 INDEPENDENT JOE

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DECEMBER 2013

By Adam Goldman

After I took every service class offered by the DCP, I came to realize that a network of Dunkin’ Donuts stores needs the same kind of maintenance plan as a sophisticated manufacturing business.

When I graduated college, I was hired by the Ford Motor Company in their Assembly Operations Department.

There, I learned how to apply predictive maintenance and preventive maintenance techniques to reduce machine failure and improve efficiency.

Ford’s assembly plants were capable of producing a new truck every 1.2 minutes. That’s 1,200 trucks every day in a plant running three eight-hour shifts, six days a week. Any failure that took the system off-line could result in a loss of tens of thousands of dollars a minute. The company had sophisticated predictive maintenance schedules to reduce unplanned repairs and improve overall uptime.

So, how does that apply to Dunkin’?

Preventive maintenance, which is performed at specific intervals, is designed to keep equipment operating and extend its useful life. Because preventive maintenance is scheduled, you can pre-order the parts needed and determine exactly when to take the equipment out of service. Most of the equipment used in a Dunkin’ Donuts shop comes with a recommended maintenance schedule which determines how often parts should be checked, cleaned or replaced.

Predictive maintenance is based on using specific indicators, diagnostic tools and, even sophisticated algorithms to predict when a machine will fail. This approach also allows you to order parts and schedule downtime for repair prior to any equipment failure. But, you only work on equipment that actually needs attention; you can also keep a smaller inventory of parts because you can order extra parts precisely when you need them.

At Ford, we would regularly monitor the amperage a motor was drawing. We knew that when the amp draw increased, the motor was beginning to fail. At that point, we would schedule maintenance. The same approach could be used with refrigerators, ice makers or Coolatta machines. If the unit has a condenser coil and you notice temperatures are slowly rising – even if they are still within operating specs – the coil should be vacuumed because temperature fluctuations could be a sign that the coil is clogged with dirt or grease. It could be the manual says

Photo Credits: Kem Parry

PREVENTIVE MAINTENANCE the coils should be vacuumed quarterly and it’s been less than 13 weeks. But, the signs indicate a need for corrective action. This kind of predictive maintenance can prevent spoilage or, worse, a total machine failure, necessitating a late-night call to an emergency technician and, possibly a capital purchase.

It’s important to remember that different Dunkin’ shops in the same network can use their equipment on vastly different schedules. A busy drive-thru store may use its grinder three times more than a small stand-alone store in a suburban strip center, yet the schedule for cleaning and maintenance on each machine is the same. If you stick to a short schedule to accommodate the drive-thru’s schedule, you are likely replacing parts in the stand-alone’s grinder long before it is necessary. If you base the repairs on the slower store, you could find your drive-thru’s grinder failing because it was long-overdue for its preventive maintenance. This is why predictive maintenance can help you stay on top of your overall program, save you money and keep things running smoothly.

Corrective – or reactive – maintenance, on the other hand, is the costliest and least efficient way to take care of your equipment.

Every franchisee has a story about an unexpected failure, like the Coolatta machine failing at the start of a three-day summer weekend. That is a situation that ends badly for everyone involved.

Last January, as I sought to fulfill my New Year’s resolution, I created a spreadsheet that lays it all out. It’s divided into two categories: one featuring all the equipment you need to operate the store; the second listing every item associated with the physical building— things like HVAC units, grease traps, signage, lawn sprinklers and door closers.

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We use these category listings for our spreadsheets: • Equipment Type • Manufacturer • Serial Number • Service phone number • Service to be performed • Parts required • Frequency of service (weekly, monthly, quarterly, semi-annually or annually) • Time required to complete • Name of service tech • Status of work (open or complete) • Comments Be sure to include the manufacturer’s serial number because some replacement parts are only for specific serial number groups and occasionally the numbers wear off after many cleanings.

Since implementing our maintenance program last January, we have cut our overall maintenance and repair costs by nearly half and the function of our equipment has improved significantly. That means a better, more consistent product delivered to customers in a timely fashion. And, that is just what all franchisees want.

•

INDEPENDENT JOE

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DECEMBER 2013 19

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Robert Costello 617-621-0500 • cpas@gasparco.com 1035 Cambridge Street, Suite 14, Cambridge, MA 02141 www.gasparco.com Robert Fischbein, CPA 973-530-9100 • rfischbein@bederson.com 100 Passaic Avenue, Fairfield, NJ 07004 www.bederson.com

Cynthia A. Capobianco, CPA

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Neovision Consulting Inc.

Nish Parekh 609-531-4444 • info@neovisioncpa.com 1246 South River Road, Suite 101 Cranbury, NJ 08512 www.neovisioninc.com

Rubiano & Company, CPA’s

Daniel J. Rubiano, CPA 401-949-2600 • dan@rubianocpa.com 5 Austin Avenue, Suite 1, Greenville, RI 02828 www.rubianocpa.com

Sansiveri, Kimball & Co., LLP

Michael A. DeCataldo 55 Dorrance Street, Providence, RI 02903 401-331-0500 • mdeca@sansiveri.com www.sansiveri.com

Thomas Colitsas and Associates, CPA

Tom Colitsas 609-452-0889 • tcolitsas@tcacpa.com 103 Carnegie Center, Suite 309, Princeton, NJ 08540

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Kensington Company & Affiliates

David Stein • kstein@kensingtoncompany.com W: 516-626-2211 • M: 718-490-2218 185 Roslyn Road, Roslyn Heights, NY 11577 www.kensingtoncompany.com

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Bank RI

Tom Fitzgerald 401-574-1119 • tfitzgerald@bankri.com One Turks Head, Providence, RI 02903 www.bankri.com

Brendon Pierson

Jeffrey Kotch 732-681-4800 • jkotch@brendonpierson.com 6333 North State Highway 161, 4th Fl., Irving TX 75038 www.brendonpierson.com

Business Financial Services

Comcast Business Services

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Time Warner Cable Business Class

Deborah Blondin 603-589-4071 • dblondin@centrixbank.com 1 Atwood Lane, Bedford, NH 03110 www.centrixbank.com

COST RECOVERY

Bedford Cost Segregation, CPAs

Robyn Gault 603-433-9476 • rgault@directcapital.com 155 Commerce Way, Portsmouth, NH 03823 www.franchise.lendedge.com

EF Cost Recovery

Sally Buffum 508-762-3604 • sbuffum@fidelitybankonline.com 465 Shrewsbury Street, Worcester, MA 01604 www.fidelitybankonline.com

Comcast National Sales • 866-407-6338 Dunkin_National_Sales@comcast.com 500 South Gravers Road, Plymouth Meeting, PA 19462 www.business.comcast.com/internet Tricia Petway (919) 654-4115 • tricia.petway@twcable.com 4200 Paramount Parkway, Morrisville, NC 27560 www.twc.com/business

Bill Cusato 978-263-5055 • bcusato@bedfordcostseg.com 60 State Street, Suite 700, Boston, MA 02109 www.bedfordcostseg.com/who_we_serve/ddifo.asp Ed Craig 774-263-7388 • ecraig3@efcostrecovery.com PO Box 79361 North Dartmouth, MA 02747 www.efcostrecovery.com

Centrix Bank & Trust

Direct Capital Franchise Group

Fidelity Bank

First Franchise Capital

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

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

Performance Business Solutions, LLC

Karen Johnson 402-562-5111 • karen.johnson@firstfcc.com 2715 13th Street, Columbus, NE 68601 www.firstfranchisecapital.com

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Jonathan Ralys 225 Woldwood Avenue, Woburn, MA 01801 781-305-1335 • Jonathan.Ralys@Trane.com www.Trane.com/commercial

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DDIFO® does not endorse or recommend 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®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.

20 INDEPENDENT JOE

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DECEMBER 2013

GE Capital, Franchise Finance

Infinity Franchise Capital

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Sovereign Bank

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TCF Franchise Finance

Mike Vallorosi 201-818-2700 • mvallorosi@tcfef.com 300A Lake Street, Suite B, Ramsey, NJ 07446 www.tcfef.com

TD Bank

Brian Frank 203-761-3818 • brian.frank@td.com 40 Danbury Road, Wilton, CT 06857 www.tdbank.com

United Capital Business Lending

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Employers Reference Source

Sandra Fabrizio 888-512-2525 • sandraf@employersreference.com 1587 Hamilton Avenue, Waterbury, CT 06706 www.employersreference.com

Granite Payroll Associates

Marco Schiappa 401-263-7921 • marco@granitepayroll.com 176 Granite Street, Qunicy, MA 02169 www.granitepayroll.com

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Jim Ferreira 203-530-3512 • jferreira@ovationpayroll.com 777 Westchester Ave, Ste 101, White Plains NY 10604 www.ovationpayroll.com

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ADP

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Heartland Ovation Payroll

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Laurie Fleming 563-556-0123 ext.1190 • lfleming@honkamp.com 2345 JFK Rd, PO Box 3310,Dubuque, IA 52004 www.hkpayroll.com

INSURANCE

Insurance World Agency Inc.

Anil K. Sharma 630-654-6067 • info@iwainsurance.com 100 E Ogden Avenue Suite 203, Westmont, IL 60559 www.iwainsurance.com

KK Insurance Agency

Ashish Vadya 866-554-6799 • ashish@kkinsuranceagency.com 541 Broadway, Long Branch, NJ 07740 www.kkquote.com

Sinclair Insurance Group - Risk Management

Matt Ottaviano 203-284-3235 • mottaviano@sinclair-insurance.com 4 Tower Drive, Wallingford, CT 06492 www.srfm.com

Starkweather & Shepley Insurance Brokerage, Inc.

Sabrina San Martino 800-854-4625 ext. 1121 • ssanmartino@starshep.com 60 Catamore Boulevard, East Providence, RI 02914 www.starkweathershepley.com

Wells Fargo Insurance Services

Mark Stokes 813-636-5301 • mark.stokes1@wellsfargo.com 2502 North Rocky Point Drive, #400, Tampa, FL 33607 wfis.wellsfargo.com

LEGAL

Lisa & Sousa Attorneys at Law Ltd.

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

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DECEMBER 2013 21

Directory of Sponsors Please Visit The DDIFO Sponsor Directory online at www.DDIFO.org Hi-Tech Sound

Gary Hanna 508-624-7479 • gary@hitechsound.com 19 Brigham Street, Unit 10, Marlboro, MA 01752 www.hitechsound.com

HME Drive-Thru Headsets

Brady Campbell 858-535-6034 • bcampbell@hme.com 14110 Stowe Drive, Poway, CA 92064 www.hme.com

Jarrett Services ATM, Inc.

Eric Johnston 732-572-0706 • ej@jarrettforcash.com 1315 Stelton Road, Piscataway, NJ 08832 www.jarrettforcash.com

Macdonald Restaurant Repair Service, Inc.

Paris Ackerman & Schmierer LLP

David Paris 973-228-6667 • david@paslawfirm.com 101 Eisenhower Parkway, Roseland, NJ 07068 www.paslawfirm.com

Vernis & Bowling of Palm Beach, P.A.

Tammy Bouker • 561-775-9822 • 561-775-9822 tbouker@national-law.com 884 US Highway One, North Palm Beach, FL 33408 www.national-law.com

Zarco, Einhorn, Salkowski & Brito, PA

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

OPERATIONS

3M Company

Bill Muenkel 952-484-4875 • wemuenkel@mmm.com Bldg. 223-2N-20 St. Paul, MN 55144 www.3M.com/communications

3 Wire Group, Inc.

Derek Knapp 518-563-3200 • derek.knapp@3wire.com 101 Broadway Street West, Osseo, MN 55369 www.3wire.com

Access to Money ATM, Inc./Cardtronics

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

Belshaw Adamatic Bakery Group

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

Bunn-O-Matic Corporation

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

Delphi/Fast Track 2+2 Drive-Thru Timer

Amie Yee 877-646-8224 • ayee@mint-x.com 2048 119th Street, College Point, NY 11356 www.mint-x.com

DTT Surveillance

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

Dunbar Security Products

Jerry Brown • A Division of New England Coffee Co. 781-873-1536 • jerry.brown@necoffeeco.com 100 Charles Street, Malden, MA 02148 www.nerepairservice.com

Ecolab

Jeffrey Cartier 401-247-6500 • jcartier@pararest.com 101 Main Street, Warren, RI 02885 www.pararest.com

eTemp

Matt Lemke 785-368-7530 • matt.lemke@payless.com 3231 SE 6th Avenue, Topeka, KS 66607 www.payless.com

Green Turtle Americas

Jeannine Gaine 630-240-1298 • jeannine.gaine@pentair.com 1040 Muirfield Dr., Hanover Park, IL 60133 www.everpure.com

Todd Rouse 800-637-8606 • Todd.Rouse@bunn.com 1400 Stevenson Drive, Springfield, IL 62703 www.bunn.com Mike Pierce 714-850-1320 • mike@phaseresearch.com 3500 West Moore Ave., Suite M, Santa Ana, CA 92704 www.fasttracktimer.com Mira Diza 800-933-8388 • mdiza@dttusa.com 1755 North Main Street, Los Angeles, CA 90031 www.dttusa.com Dustin Gosewisch • 800-766-9145 dustin.gosewisch@dunbararmored.com 8525 Kelso Drive, #L, Baltimore, MD 21221 www.dunbarsecurityproducts.com Arliene Bird arliene.bird@ecolab.com 8300 Capital Drive, Greensboro, NC 27409 www.ecolab.com/Businesses Cardie Saunders 800-974-1006 • cardie.saunders@getecube.com 5 Cold Hill Road, Building 20, Mendham, NJ 07945 www.getetemp.com Eric Hancock 704-295-3964 • ehancock@greenturtletech.com 2709 Water Ridge Pkwy Charlotte NC 28217 www.greenturtletech.com

DDIFO® does not endorse or recommend 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®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.

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DECEMBER 2013

Mint-X Corporation

New England Drive-Thru Communications

New England Repair Service

Paramount Restaurant Supply Corp.

Payless Shoe Source

Pentair Filtration & Process

Pier Cleaners

Larry Fish 401-789-2333 • piercleaners@piercleanersri.com 50 High St. Wakefield, RI 02879 www.piercleanersri.com

Directory of Sponsors R.F. Technologies

UAS Security Systems

Jennifer Morales 618-377-4063 ext. 121 • jenm@rftechno.com 542 South Prairie Street, Bethalto, IL 62010 www.rftechno.com

Chris McGurk 800-421-6661 • chris.mcgurk@uas.com 700 Abbott Drive, Broomall, PA 19008 www.uas.com

QualServ

Becky Dubose 800-643-2980 ext. 256 • bdubose@qualservcorp.com 7400 28th Street, Fort Smith, Arkansas, 72906 www.qualservcorp.com

Shoes For Crews

Shanita Vickers 877-677-3630 • shanitav@shoesforcrews.com 250 S. Australian Ave. West Palm Beach Fl 33401 www.shoesforcrews.com

SKAL East, Inc

Kevin Huerth 508-238-0106 • kevin@skaleast.com PO Box 303, 31 Eastman Street, Easton, MA 02334 www.skaleast.com/index.cfm?keyword=dunkin

TredSafe/WalMart

Ted Travis 909-949-0495 • ttravis@esoriginals.com 450 West 33rd Street, New York, NY 10001 www.walmart.com

Wentworth Technology

Lisa Keslar 207-571-9744 • jlisakeslar@wentworthtechnology.com 77 Industrial Park Road Saco Me 04072 www.speedthruheadsets.com

The Wifi Company

John J. Bailey 877-949-9434 • jbailey@thewificompany.com 190 Pine Rd., Golden, CO 80403 www.thewificompany.com

TAX DEFERRED EXCHANGE Exchange Authority

Marie Dias 978-433-6061 • mdias@exchangeauthority.com 9 Leominster Connector, Suite 1, Leominster, MA 01453 www.exchangeauthority.com

! s r o s n o p S r u O to u o Thank Y

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DECEMBER 2013 23

SUB HEADLINE DDIFO SPONSOR ADVERTORIAL

Lisa on the Law

Over the past two decades, ViewPoint Sign and Awning has become a valued, DBI-approved supplier. Sales Manager Bill Gavigan has personally designed and supplied signage to Dunkin’ Donuts franchise owners for more than 30 years, 20 of those through ViewPoint.

The company produces the full range of Dunkin’ Donuts and Baskin-Robbins standard and custom signage and awnings, offering the advantage of one-stop shopping for all such needs. Its management team, top-notch fabricators and installers provide products of the highest quality, guaranteed to be manufactured to strict DBI standards. ViewPoint is also an approved supplier and installer of the WatchFire Electronic Message Centers.

“Because of my deep knowledge of the Dunkin’ brand, many franchisees consult directly with me about size, placement and product selection,” said Gavigan.

“We can handle the entire project—from estimating the job to permitting, design, fabrication and installation.

Plus, we get the job done on time and on budget.”

For more information, or to arrange a free quote or consultation, visit www. viewpointsign.com or contact Bill Gavigan at 800-6363430, 508-294-6895 or billg@viewpointsign.com.

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F

By Carl B. Lisa, Esq., DDIFO General Counsel

The Qualified Franchisee DD Trust

ranchisees are generally familiar with the use of trusts in their estate planning process. Some of the benefits generally sought by use of trusts include the efficient passage of assets upon death, potential tax savings, avoidance of a lengthy and sometimes costly probate proceedings, privacy, and the maintenance and control of the grantor of decision making during his or her lifetime.

To further complete the process, assets – ordinarily subject to probate such as homes; insurance proceeds; investment real estate; financial investment accounts; and business interests – would be transferred to one or more estate planning trusts.

Often times a franchisee’s most valuable assets are business holdings, including the Dunkin’ Franchise Agreements, which heretofore could not be retitled into estate planning trusts.

Additionally, the franchise agreement requires that a qualified franchisee be in control of the operation. Generally, franchisees would like this matter settled during their lifetime.

The Dunkin’ Franchise Agreement, however, restricts the holding of Dunkin’ interests to individual names, and certain business entities, such as corporations and limited liability companies. Until recently, Dunkin’ recognized the franchised ownership interest to be held in certain business trusts, but generally not estate planning trusts. That has now changed as a result of the creation of the Dunkin’ Franchisee Qualified Trust (“the Trust”).

The Trust is an agreement between the franchisee, referred to as the Grantor, and Dunkin’ Donuts’ Franchising LLC, and its affiliates and is created for the purpose of allowing the transfer or retitling of the franchisee’s interests into the Trust. It allows the franchisee to control who he or she wants as the successor by choosing the designated qualified franchisee during his or her lifetime, rather than having a court make such an appointment.

Often times a franchisee’s most valuable assets are business holdings...which heretofore could not be retitled into estate planning trusts.

Additionally, the Trust can be structured to allow multiple entities to be retitled in a single Trust and allow additional units purchased by the franchisee after the time the Trust is created to be added to the existing trust.

The franchisee is generally the initial trustee of the Trust and his or her revocable trust is the beneficiary of the Trust. Under the terms of the Trust, the franchisee has power to appoint and remove successor trustees during his or her lifetime. This provision allows flexibility for the franchisee to change the successor trustee as business and family situations occur. For example, the franchisee might desire his nonqualified spouse to be a major beneficiary of his or her estate planning trust, but designate a qualified child, other relative or business owner be the Dunkin’ Qualified Trustee.

The beneficiary of the Trust is the franchisee’s revocable trust. The Trust works in conjunction with the franchisee’s estate planning trust and incorporates the powers and privileges provided therein. Dunkin’ must approve the transfer and charges a documentation fee for processing the Trust and incorporating certain franchise provisions into the trust.

Franchisees should consider the Qualified Dunkin’ Donuts Trust as an integral part of their estate planning and retitling process.

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This publication is not intended to constitute legal advice. If legal advice is required the services of a competent legal professional should be obtained.

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Commitment to Client Service Since 1990 we have enjoyed amazing personal relationships with Dunkin’ Donuts Franchisees.

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dunkin’ donuts stores

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Find out how JCM can help you grow and plan today. We have helped many Dunkin’ Donuts franchisees and we can do it for you.

BOSTOn

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B O C a R aT O n

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B e v e R ly H I l l S

Start a Relationship Today: 1-800-56-JOYAL Gary F. Joyal

Richard P. Joyal, Jr.

Stephen M. Stabile

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President ss12@att.blackberry.net

Daniel F. Connelly

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Managing Director krebello@joycapmgt.com

Chief Financial Officer sobrien@joycapmgt.com

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