Franchisees to Celebrate Independence at Foxwoods by Dunkin' Donuts Independent Franchise Owners

August/September

The Magazine for D D

Independent Franchise Owners

CELEBRATING YOUR INDEPENDENCE

2016 DDIFO NATIONAL

CONFERENCE FOXWOODS MASHANTUCKET, CT

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A Changing Perception?

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I CR EAT D E MA N E YO U D.

CA S H I N

DON’T BLAME UNINTENDED CONSEQUENCES Why is it that so often a mandate is issued from on high, but when the inevitable unintended consequences come to pass, there is shock and dismay at the unfavorable results? In a prior life, I was an advocate/lobbyist for rental housing owners in Massachusetts. At that time, political powers had put strict rent controls in place in a handful of communities mandating that rents could not increase without the expressed approval of the local government. In response to that government fiat, housing developers avoided building in those rent control jurisdictions and chose to invest where their return on investment wasn’t contingent upon government largesse. Inevitably, officials in those localities would lament that, despite the strong demand, new – and much-needed housing – just wasn’t being built. They refused to connect the dots. Similarly, we see abundant parallels in today’s political debates in states and cities around the nation. In the case of minimum wage hikes, for example, the thinking is that when lower skilled workers – those closest to the poverty line – have their pay raised to a particular magic number (first pegged by President Obama at $10.10, but now commonly seen as $15/an hour) these workers would have enough income to live the more prosperous life they want and the advocates believe they deserve. The reality, however, can be far different. Increasing wages has a cumulative effect that generally exceeds the actual hourly increase by 20% to 50%, so when the minimum wage is increased by $1, the employer must also absorb increases to workers compensation and unemployment insurance. When you couple those increases with the health care mandate and perhaps a paid sick leave requirement, then the total additional employment costs are significantly higher than the publicized $1 per hour. And, that doesn’t even take into account the tangential increases associated with the minimum wage that ripple throughout the food processing chain – farming, processing, delivery, packaging, etc. The reality is that business owners have few options with which to respond. They can increase prices, or reduce labor costs by implementing more automation or increasing the employees’ workload. Either way, the elected officials, who pushed the increase in the first place, will turn around and blame the business owners for the higher prices, the lost jobs or the added burden on employees. Another example surrounds new work rules regarding scheduling. Some cities and states are forcing

employers to provide workers with two weeks’ notice before scheduling their shifts. Then, if circumstances warrant a schedule change, the employer must pay a penalty to the employee. In these cases, employers have to find other ways to cut costs, which can often have a negative impact on workers. Then there is the joint employer situation, which is an example focused entirely on the franchise business model, It’s pretty clear the National Labor Relations Board (NLRB) went above and beyond what a rational individual would define as a joint employer, but who led the agency down that path? For years, franchisors have issued edict after edict on what franchisees can and cannot do with their employees, with their training programs, with their work schedules and, in extreme cases (McDonald’s), even with how they slice vegetables. The joint employer ruling demonstrates that franchisors can’t have it both ways—a lesson not lost on Dunkin’ Brands. When he reported less-than-stellar second quarter earnings, Dunkin’ CEO Nigel Travis blamed weak numbers on franchisees who raised prices, even though guidance for the price increases came from the brand, in the wake of its decision to eliminate combo deals. Here again, Dunkin’ set the stage for higher consumer prices – not by edict, but by “recommendation,” then blanched at the results when they negatively impacted same store sales. The lesson is that edicts have repercussions that can often exacerbate the original problem. It may be an unwanted and unintended consequence, but it is likely a direct result of the edict nonetheless. Business, by its very nature, is dynamic. Whether it’s a mom and pop operation, a national franchise chain or an international conglomerate, when one door closes, successful business owners will search out different, more efficient and effective ways to succeed. That is the very construct of business, and it embodies the genius of American business – creativity, perseverance and determination. Governments – and franchisors – are ill-advised to try to stifle it. Ed Shanahan DDIFO Executive Director

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 1

SUB HEADLINE

CONTENTS

From the Executive Director Don’t Blame Unintended Consequences • • • • • • • • • • 1 What’s Brewing: A Look at State Issues Around the Footprint • • • • • • • • 5 A Changing Perception?• • • • • • • • • • • • • • • 9

CELEBRATING YOUR INDEPENDENCE

2016 DDIFO NATIONAL

CONFERENCE FOXWOODS MASHANTUCKET, CT

2016 DDIFO National Conference Promises “The Wonder of it All” • • • • • • • • • • • • • • • 12 DDIFO Announces 2016 Hall of Fame Inductees• • • • • • • • • • 16 Breaking into the Bay Area• • • • • • • • • • • • 18 Franchisee Profile: Missouri Franchisee is accustomed to the ups and downs of business• • • • • 22 Directory of Sponsors • • • • • • • • • • • • • • • 24 Legal: How Equal Access Laws Affect Franchise Owners • • • • • • • • • • • • • • • • • 28 HISE O W N

ANC

HISE O W N

ANC

18 2 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

9 22

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4 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

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August/September 2016 Issue #39 Independent Joe® is published by DD Independent Franchise Owners, Inc. Editors: Edwin Shanahan, Matt Ellis Contributors: Stefanie Cloutier, Michael Hoban, Scott Van Voorhis Business Member Coordinator: Joan Gould Creative Director: Caroline Cohen Direct all inquiries to: DDIFO, Inc. 2 First Avenue, Ste. 127 – 3, Peabody, MA 01960 978-587-2581 • info@ddifo.org • www.ddifo.org 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 © 2016 Printed in the U.S.A.

WHAT’S BREWING A LOOK AT STATE ISSUES

AROUND THE FOOTPRINT By Scott Van Voorhis It’s been one long, hot summer for Dunkin’ franchise owners and others in the quick service business, and we are not just talking about the temperature. A tight labor market has combined with a wave of minimum wage hikes across the country to ramp up the pressure on franchisees across the country. And in a growing number of cases, franchise owners are responding by boosting pay and raising prices in order to cover their expenses.

Gordon, principal of Pacific Management Consulting Group, and DDIFO’s restaurant analyst. “I don’t think anyone knows yet. People are deathly afraid of wage and hour,” he says, referring to the U.S. Department of Labor unit that investigates wage-related offenses. Wage hikes hitting bottom line Baltimore is the latest city to debate hiking the minimum wage to $15 an hour. The minimum wage in New York City and its environs is now set to hit $15 an hour

in 2021, with the rest of the state set to rise to $12.50 and potentially higher, if certain conditions are met. California is set to hit $15 an hour by 2022. Seattle, Pittsburgh, Greensboro, Rochester, Syracuse, Milwaukee, have either already upped the minimum to $15 an hour or are poised to do so over the next few years. In a recent interview, Nigel Travis, Dunkin’ Brands chief executive, said the wave of minimum wage hikes sweeping

Even in an improving economy, it’s a strategy that comes with risks, including the potential to lose sales as customers go elsewhere, industry experts say. If that weren’t enough, federal labor regulators are upping the ante as well, aggressively pursuing allegations of wage and overtime violations. The feds recently inked a big compliance agreement with Subway, with signs the crackdown could soon extend to franchise owners in other chains. “Many franchises are worried to death about what this means,” according to John

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 5

WHAT’S BREWING

the country has prompted some Dunkin’ franchise owners to boost pay for employees. “We think that pricing got ahead of itself because [franchisees] saw the minimum wage going up, and the natural reaction is to increase prices,” Travis told the Boston Herald. “It’s not always the best reaction. We’ve managed now to get price increases under control.” Prices rose 380 basis points in the first half of the year. That led to a 2.9 percent increase in average sales but also a 1.4 percent drop in traffic. Overall, same store sales edged up .5 percent at Dunkin’ Donuts locations in the U.S. Benjamin Litalien, founder and principal of consulting firm Franchise Well, agreed that simply hiking prices is a potentially risky strategy for franchise owners. If wage pressures continue to mount, franchisors may have to start exploring ways to cut down on labor costs through

6 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

automation, he argues. “Given the headwinds we are facing, given the artificial wage rates, is it going to result in consumer acceptance of higher prices? If it does, we should be able to fold it into our business model,” Litalien says. “If there is pushback, that is going to put significant stress on small business owners.” “Certainly the franchisors have a responsibility to be thinking about automation,” Litalien says. Still, it’s not just minimum wage hikes that are forcing franchise owners to make difficult decisions like raising prices, but also a shrinking pool of available workers to draw from, Gordon says.

and wage rates are rising anyway in order to lock the good people in,” Gordon says. “Wage related inflation has become a much greater issue and it has shown up quarter after quarter after quarter in earnings calls.” Feds ramping up wage and hour investigations The U.S. Department of Labor has franchise owners across the country wondering who’s next on the crackdown list after forcing Subway to sign a sweeping wage compliance pact.

He pointed to McDonald’s, which boosted its wage rate to a $1 above the minimum, and Starbucks, which recently reviewed the pay of all of its hourly workers with an eye towards keeping them from jumping ship.

The agreement, which covers Subway’s 27,000 locations across the country, comes after a spate of more than 800 investigations of wage and hour violations at Subway restaurants by federal labor officials. Subway was forced to pay more than $2 million in wages to more than 6,000 workers as a result of the investigations by the Department of Labor’s Wage and Hour Division.

“Turnover is higher almost everywhere

Intrigued, Independent Joe decided to

read the full document and see what all the fuss is about. The pact goes well beyond developing and distributing educational materials on compliance with wage and hourly laws to franchise owners. In fact, the deal requires Subway to effectively become a joint watchdog with Labor Department investigators, putting the franchisor on the hook to help prevent violations of wage laws by individual franchise owners, such as not paying overtime. Subway will pool data with the Labor Department and help regulators analyze it, looking for “new ideas for promoting compliance.” The quick-service chain has also agreed to explore building “alerts” into the electronic payroll and scheduling platform it provides to franchisees. Subway executives have also agreed to meet every three months with their Labor Department counterparts to “share

Turnover is higher almost everywhere and wage rates are rising anyway in order to lock the good people in. Wage related inflation has become a much greater issue and it has shown up quarter after quarter after quarter in earnings calls. information, evaluate compliance trends, and solve problems.” A particularly interesting section deals with enforcement. “When circumstances warrant, Subway may inform franchisees of Section 11 (a) of the FLSA (Fair Labor Standards Act), which authorizes representatives of The Department of Labor to investigate and gather data concerning wages, hours, and other employment practices; enter and inspect an employer’s premises and records; and question employees to determine whether any person has violated any provision of the FLSA.”

In communicating with its franchise owners, Subway is also required to stress that complying with the Fair Labor Standards Act is a requirement of owning a franchise and that a history of violations could lead to the termination of the franchise agreement. Subway reportedly entered into the deal after being assured that it would not be used as evidence to declare Subway a “joint employer” with its franchise owners, essentially putting the corporate parent on the hook for violations on part of individual owners. No such assurance can be found in the document itself.

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 7

WHAT’S BREWING

(A controversial 2015 ruling by the National Labor Relations Board greatly expanded the criteria for determining whether a franchisor is in effect a “joint employer” with local franchise owners.) No one-shot deal, David Weil, head of the Labor Department’s wage and hourly division, has been quoted saying. He hopes the Subway deal will become a template for agreements with other franchisors. Stay tuned – and vigilant! Sodium police hit streets Dunkin’ franchise owners in New York City face a double whammy. Not only is the minimum wage going up, they will have to put pictures of little salt shakers on their menu boards in front of foods with higher levels of sodium. If they don’t, they could face fines. New York regulators this summer gained the power to start fining restaurants who fail to put the little salt shaker symbols next to “salty” menu items.

Learn more at watchfiresigns.com/donuts

8 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

A state appeals court in June rejected the National Restaurant Association’s challenge of the new city ordinance requiring salt shaker icons next to items that contain at least 2,300 milligrams of sodium. That is roughly the daily recommended limit for one person. New York officials now have the authority to fine restaurants that don’t comply – the law is aimed at chains with 15 or more locations across the country. New York began requiring calorie counts on menus in 2006, while also banning trans-fats. A so-called “soda tax” struck out in court in 2014. Financial fallout from sick leave Connecticut’s paid sick leave law, passed with fanfare in 2012, hasn’t been such a good deal for younger workers, a new study finds. Workers between 20 and 34 have seen the number of hours they work per year drop by 24, according to a study by the Employment Policies Institute. That amounts to

$850 less in pay per year. Under the law, companies are required to give employees one hour of paid sick leave for every 40 hours worked. A 2013 survey by the think tank found some business owners were cutting back on hours, wages and benefits to deal with higher costs triggered by the new law. Looking ahead For franchise owners, the challenges are coming from all directions these days. Minimum wage hikes and a tight labor market are pushing up costs, while federal labor regulators are ratcheting up the pressure as well. The bottom line pressures can require franchise owners to make tough choices on whether to cut back on hours and benefits or raise prices. With a presidential election looming this fall, the coming months will also help determine the nation’s direction over the next few years and maybe more. Here at Independent Joe, we’ll keep an eye on all these trends so you can do what you do best, run your franchise and take care of your customers and employees.

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A Changing Perception? By Matt Ellis

unkin’ Donuts’ new TV ad featuring the world’s fastest flying woman, Ellen Brennan, using a mobile ordering app then soaring from an 8,300 foot mountain peak to pick up her sandwich, is exhilarating to say the least. Dunkin’ wanted to make the point that its new On-The-Go mobile ordering feature is fast—and it did. And, while the media coverage for On-The-Go has generally been positive, the brand has been a magnet lately for tough questions about slow revenue growth and diminishing store traffic. In his appearance on CBNC, Dunkin’ Brands CEO Nigel Travis admitted, “It wasn’t a spectacular quarter.”

Photo Credit: www.dunkindonuts.com

The ever-colorful New York Post put it another way, “McDonald’s eats Dunkin’ Donuts breakfast.” It’s not the kind of headline any brand wants to see in the nation’s largest market, where the influence of McDonald’s All-Day Breakfast is a factor. Another factor driving the bad news is higher prices. Sharon Zackfia, a restaurant analyst at William Blair Investment Management in Chicago, told The Boston Globe recently, “Dunkin’ Donuts prices have risen three percent so far this year, outpacing Starbucks’ one percent increase,” which she says begs the question: Are people abandoning

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 9

A CHANGING PERCEPTION? Dunkin’ for lower-cost coffee options at McDonald’s and convenience stores? Travis blamed franchisees for raising prices in response to higher labor costs brought about by campaigns like “The Fight for $15.” Some franchises are quick to point out that the brand recommended higher MSRPs when it eliminated combo deals. From the consumer’s perspective, stories about weaker-thanexpected sales growth have been wedged alongside news of big, new brand initiatives like the rollout of Dunkin’s wicked fast On-The-Go app and its newest foray into iced coffee. At a time when U.S. consumption of coffee is expected to increase by 5 percent per year or more, Dunkin’ has introduced a new, premium iced coffee product aimed at younger consumers, “Cold Brew is yet another example of the beverages we are introducing that further establishes Dunkin’ as a coffee authority and drives sales,” Travis said on his July earnings call. In general, media coverage of Dunkin’ Cold Brew has been positive. Boston. com wrote, “The cold brew release represents a continuation of the company’s efforts to appeal to coffee connoisseurs.” Cold Brew comes with a premium price, which could help franchisees increase profits in the long run, but could first contribute to the perception that Dunkin’ Donuts is not the blue-collar, costeffective beverage and snack choice it traditionally has been.

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During the July earnings call with analysts and reporters, one analyst jokingly asked Travis if Dunkin’s new high-end coffee offerings are leading the brand to a new motto, “Starbucks quality at Dunkin’ prices.” Industry reporter Shelly Banjo, writing in The Seattle Times, suggested, “Imitation is the sincerest form of flattery and also one of the easiest ways to lose your identity. Traditionally lowbrow Dunkin’ Donuts has been pushing into tonier offerings, such as espresso, cold brew coffee and Rainforest Alliance-certified coffee beans—so much so that it’s beginning to look a lot like Starbucks.” Dunkin’s sluggish sales may be a sign of things to come. Restaurant watchers say weakening consumer confidence, fueled by political and global uncertainty, is keeping traffic down and sales flat. Analyst Paul Westra at Stifel Financial was the first to suggest the restaurant industry is in the midst of a downturn, based on sluggish second quarter earnings reports from 15 of 16 major foodservice chains. “In the year preceding the last three U.S. recessions, on average, restaurant stocks have declined 23 percent," Westra wrote in a research note in August predicting an average decline of 20 percent for restaurant stocks in the second half of 2016. Experts note the pizza sector is not showing the same weakness this year, which also indicates a possible restaurant recession. "Pizza chains typically do well when consumers cut spending due to their value proposition,” analyst Michael Halen says.

Travis knows well how pizza brands can succeed in tough times, having earned industry accolades for his leadership at Papa John’s during a three-year tenure as CEO from 2005-2008, which coincided with the Great Recession. As Dunkin’s chief, Travis has committed to opening another 8,000 new Dunkin’ Donuts restaurants across the country—filling in what many have called the “white space” between Dunkin’s core markets in New England, Chicago and Florida. It remains to be seen whether those plans will be shelved if the restaurant industry goes through several quarters of negative growth. What may be more troublesome than the economic blip of the moment is the perception that Dunkin’ is stuck in the middle. It is not a premium brand like Starbucks and, it is not a bargain brand like McDonald’s or the local convenience store/gas station. Wall Street has soured on many well-known middle-of-the-road retailers like Macy’s, Sears and JC Penney, preferring bargain brands like Walmart and Target. According to DDIFO Restaurant Analyst John Gordon, principal of Pacific Management Group, franchisees have to weigh the need to increase prices to cover rising labor costs and ensure they have sufficient cash flow to cover the cost of remodeling their restaurants to comply with brand standards. Raising prices is a tricky proposition during this time of political and economic uncertainty. Consumers are understandably

Dunkin’ has to increase the number of customers that are not as pricesensitive, because these customers can absorb a price increase better than the brand’s traditional blue-collar customer. price-sensitive—especially Dunkin’s core customers. It’s one reason why Gordon says the brand needs to work hard at upgrading its customer mix. “Dunkin’ has to increase the number of customers that are not as price-sensitive, because these customers can absorb a price increase better than the brand’s traditional blue-collar customer,” Gordon says. “They can do that by ensuring the quality of their beverages and the customer experience.” One way Dunkin’ is doing that is with innovations like On-TheGo ordering. Customers who pay ahead with their mobile phones get their Dunkin’ done fast, and they may not even notice the extra cents they’re paying for a coffee and flatbread sandwich.

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INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 11

CELEBRATING YOUR INDEPENDENCE

2016 DDIFO NATIONAL

CONFERENCE

ack your bags, make your plans, and get ready to experience “The Wonder of it All,” at the 2016 DDIFO National Conference, happening October 24-25 at Foxwoods Resort Casino in Mashantucket, Connecticut. The conference will convene franchisees from around the country in the place where Dunkin’ Donuts got its start: New England. The past three conferences have taken place in Las Vegas and Atlantic City.

By Stefanie Cloutier

“As a national organization, it’s imperative that we bring national events to our constituency all around the Dunkin’ footprint,” says DDIFO executive director Ed Shanahan. “But it’s important for us to get back to New England after four years away, to ensure our base knows we’re not forgetting about them.” And this year’s theme? “Celebrating Your Independence,” a play on the presidential

OCTOBER 24-25, 2016 election taking place two weeks later and a nod to the fact that DDIFO is the independent association for Dunkin’ Donuts franchise owners. “Central to our independence is having a say in who will lead our country for the next four years and in how we’ll use DDIFO to protect our franchisees moving forward with Dunkin’ Donuts,” explains Shanahan. “The specific changes that Dunkin’ tried to slip into the new franchise agreement will be a common thread throughout the presentations at the conference.”

place only happens at the conference, so it’s important for franchisees to make plans to be there. “This is a great brand, and this is a great opportunity for us to get together and learn more about what the brand is doing,” says Petrosinelli.

OPENING KEYNOTE SPEAKER

PRESENTATIONS & PANEL DISCUSSIONS

A DESTINATION WORTH LEAVING HOME FOR Tucked into the Connecticut woods, Foxwoods is the largest resort casino in the country. In short, there really is something for everyone. “The great thing about coming to Foxwoods is that you can bring your family and extend your stay,” says Guido Petrosinelli, a longtime franchisee from Rhode Island, and a member of the 2105 DDIFO Hall of Fame class. “It’s good for your spouse to hear things about the business, so they don’t think you’re crazy,” he added with a laugh. The annual conference is an opportunity for franchisees to learn what’s going on in the industry while sharing ideas with one another in an atmosphere free from judgment and franchisor oversight. DDIFO brings in speakers who are experts on franchising to focus discussion on topics as varied as the NLRB “joint employer” ruling, fair franchising legislation and multi-unit franchising. The opportunity to hear all this in one

relations and educational programs to protect, enhance and promote franchising and the more than 800,000 franchise establishments that support nearly 9.1 million direct jobs, $994 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP),” Hashim says on the IFA website.

Aziz Hashim, Chairman of the Board of the International Franchise Association (IFA)

This year, DDIFO is pleased to present Aziz Hashim, chairman of the Board of the International Franchise Association (IFA), as the Opening Keynote speaker for the National Conference. Hashim is a franchisee turned franchisor, with a number of successful brand concepts to his credit. As someone who has worked both sides of the franchise business, he will address the heavy overlap in business goals between the two groups. What many people may not know is that, Dunkin’ Brands’ membership in IFA actually extends to the franchisee community, which means Dunkin’ owner/operators can also benefit from the organization’s research, education and advocacy efforts. “IFA works through its government relations and public policy, media

The DDIFO National Conference is always hailed as a respite for franchise owners to get away from the day-to-day operations of their business and focus on big-picture topics while getting together with old friends and colleagues. The 2016 National Conference will feature a strong lineup of presentations and panel discussions, from experts in franchising, business, law and media. At press time, the lineup is scheduled to include: The Dunkin’ Franchise Agreement DDIFO General Counsel Carl Lisa, Sr., will present an in-depth examination of the changes Dunkin’ Brands proposed making to the current Franchise Agreement, which – through Lisa’s efforts – has now been forestalled. Attorney Lisa will also delve into the issues raised in a pending challenge to Dunkin’ Brands from the Baskin Robbins side of the organization. The Importance of Franchisee Engagement in Government There are a plethora of state mandates afoot that directly impact how small businesses operate. Among these are mandatory family leave, sick pay, minimum wage, and predictive scheduling. DDIFO members need to discuss the ramifications of this type of legislation,

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 13

CELEBRATING YOUR INDEPENDENCE

2016 DDIFO NATIONAL

CONFERENCE

FOXWOODS MASHANTUCKET, CT

and talk about how they can affect the outcome. Multi-unit franchisee Rob Branca, who is co-chair of the Brand Advisory Council’s Government Affairs Committee, will join this year’s conversation on the importance of franchisee involvement in government affairs. Branca will be joined by Keith Miller, a multi-unit Subway franchisee from Northern California and chairman of the Coalition of Franchisee Associations (CFA), who was instrumental in the passage of California’s ground-breaking fair franchising legislation and Chirag Shah, vice president of government affairs for the Asian American Hotel Owners Association (AAHOA). These men are recognized within franchising as some of the most effective franchisee advocates in the U.S. DDIFO members will take note of their expertise and insights with regard to the most important issues franchise owners are facing across the country. Franchisees and Private Equity As franchising has grown, more private equity money has helped owners expand their networks and seek profit in multi-unit franchising. The Opening Keynote speaker for this year’s National Conference, Aziz Hashim, created his own private equity fund to invest in franchise companies two years ago. Today, NRD Capital Partners, is helping other franchisees grow and prosper. This discussion will center on how franchisees can increase their independence by growing their capital.

14 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

Dunkin’ and Wall Street – Two Perspectives This discussion features two independent perspectives on the state of Dunkin’ Donuts and the DNKN stock, with a focus on the challenges the company faces going forward. Moderated by DDIFO Communications Director Matt Ellis, the panel will feature John Gordon, DDIFO restaurant analyst and founder of Pacific Management Consulting Group; and Candice Choi, a long-time reporter with the Associated Press, covering consumer and business news. 2016 Presidential Possibilities Two weeks after the National Conference ends, the United States will elect its next president. This campaign has been notable in many ways and, regardless of who wins, the 45th President of the United States will face unique challenges, some of which will directly impact how Dunkin’ Donuts franchisees will operate their businesses. DDIFO is pleased to present Quinnipiac University Poll Director Douglas Schwartz, who will offer his unique perspective on presidential politics, as well as a close examination of the latest Quinnipiac poll numbers and what those numbers seem to indicate will happen on November 8. Dunkin’ franchisees will have the chance to ask Schwartz how the changes in Washington could affect the franchising business going forward.

CLOSING KEYNOTE SPEAKER The Election and Its Impact on You This year, DDIFO presents a stirring and savvy political commentator to the stage at the National Conference. The Credit: Christopher Evans Closing Keynote Howie Carr, journalist, will be delivered author and radio talkshow host by Howie Carr. For those living in Greater Boston, Carr is a familiar personality who hosts his own syndicated radio show on WRKO AM-680 and publishes a widely-read column in the Boston Herald. Carr is also successful author and member of the National Radio Hall of Fame. He is frequent political commentator appearing on NBCs Today Show, MSNBC, C-SPAN, Court TV, CNN, The Fox News Channel, and CBS This Morning. He is a former winner of the National Magazine Award for Essays and Criticism, and his book, The Brothers Bulger, was on The New York Times Bestseller list for 11 weeks. Carr will broadcast his radio program live from the DDIFO National Conference beginning at 3:00 p.m. on Tuesday, October 25.

IN THE BEGINNING…

EXHIBIT HALL Once again this year, DDIFO business members will be on hand to share their latest innovations and offerings—and maybe even make some deals for DDIFO members. And, again this year, the exhibit hall is open to select franchisors that may be a good fit for some DDIFO members. Executive Director Ed Shanahan says these companies are not direct competitors but “businesses that complement DDIFO members.” As importantly, they represent new opportunities for Dunkin’ franchisees, many of whom may not have room to grow in their current Dunkin’ territories and want to branch out. Past participants have included Del Taco and McAlister’s Deli. This year, DDIFO is looking to expand into non-food concepts such as pet supplies. The exhibit hall is always a lively hive of activity at which many DDIFO members say they have made important connections and gained valuable knowledge that can lead to greater operational efficiencies and profits. The exhibit hall will be open throughout each day’s scheduled events.

HALL OF FAME INDUCTEES For many, the highlight of the annual DDIFO National Conference is the celebration of those franchisees – and others – who have made a significant contribution to the Dunkin’ Donuts system. The 2016 Hall of Fame Dinner and Awards Gala will be held on Tuesday evening, the final night of the conference. Registration for the event is strongly recommended as honorees often buy entire tables for their families and friends. “We are looking forward to recognizing these outstanding franchisees. It is always a great evening and a chance to share wonderful stories about the Dunkin’ Donuts business, and this year promises all of that and more,” says Shanahan. Whether it’s new information, relevant panel discussions, compelling keynotes or important connections made with business partners, the National Conference only happens once a year and shouldn’t be missed. “Part of DDIFO’s mission is to keep franchisees united,” says Petrosinelli. “We can accomplish more together than individually, and this conference helps us do just that.” Registration for the 2016 DDIFO National Conference and Hall of Fame Dinner is now open. Everything is set for a momentous event in the Connecticut woods.

In1986,theentertainmentlandscapein NewEnglandwasforeverchangedwhen alocaltribeofNativeAmericansopened abingooperationinConnecticut.They did it on land purchased as part of a settlementbetweenthetribeandthe federalgovernment,landillegallysold outfromunderthemacenturyearlier. TheMashantucketPequotshaveoccupiedlandinsoutheasternConnecticut for over 10,000 years. But the influx of European settlers in the 17th century broughtconflictbetweenthetwogroups, andthetribe’snumbersdwindledfrom 8,000tojust151.Itwasn’tuntiltheearly 1970sthattribemembersbeganmoving backintotheirancestralarea,lookingto restore their community. As the group pushed to get their land back,theytriedtheirhandatamultitude ofbusinessendeavors,includingmaple syrupandgreenhousevegetables.But the bingo business proved to be their ace.Itwassosuccessfulthatin1992they addedacasino,thenslotmachinesand apokerroom,untilultimatelygrowing intotheextraordinarilysuccessfulresort casinoknownasFoxwoods.Thenearby Mashantucket Pequot Museum and ResearchCentershowcasesthehistory behind the tribe, telling their story in vivid detail. As the largest resort casino in the U.S., Foxwoodsisaglamorousandexciting destination for all. It has six casinos, four-star hotels, dining options from eleganttocasual,premiereshopping, Broadway-style shows and concerts, andaward-winninggolf.Forthoseinto relaxing,there’saspa;andfortheactive crowd,there’safitnessfacilityaswellas walking trails. From couples looking for a romantic getawaytofamiliesneedingabreakfrom the everyday, Foxwoods is truly “the wonder of it all.”

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 15

HISE O W N

ANC

HISE O W N

ANC

By Matt Ellis

his year, DDIFO is honored to announce the induction of two long time operators into its Franchise Owners Hall of Fame.

DUKE CARVALHO

Carvalho left the bank, sold his share of the hardware store, and the rest is history. This year, Duke Carvalho will be recognized in the DDIFO Franchise Owners Hall of Fame during the National Conference at Foxwoods Resort Casino. “It is a true honor to be recognized like this, by all your peers in this community for all your hard work in this business,” says Carvalho.

Try it, you’ll like it Duke Carvalho always had a good eye for business. He saw the money side of it as a manager at the Cambridge (Mass.) Portuguese Credit Union. He saw the operations side of it as part-owner of a hardware store in Cambridge, and he saw the confrontational part of it as a towtruck driver throughout Greater Boston. So when, in 1978, Carvalho had the chance to talk with his friend from the local Portuguese community, Tony Couto, over business at the bank, he had his eye on potential opportunity with Couto’s already successful Dunkin’ Donuts business. Couto had an offer for Carvalho, like he did for so many others that entered the Dunkin’ system in the 1960s and 1970s. “Come work at my store and see if you like it,” Carvalho recalls Couto saying. After he tried it, he liked it. He says Couto later told him, “I know a store for sale and I’ll line it up so you can buy it.”

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David Carvalho, who, along with his sister Jessica Moller, now runs the family business, echoes the comment. “As his son, I am truly proud that he has been chosen by his peers for the Hall of Fame.” Throughout his time as a Dunkin’ Donuts owner and operator, Carvalho took an active role on several councils and committees, including the Ad Committee, DCP and Leadership Council, on which he served as co-Chair. He is a past recipient of the Dunkin’ President’s Club Award, the Combo-Operator of the Year Award, and the Irv Robins and Burt Baskin Award for Superior Innovation 1999. He was also part of the leadership of DDIFO, serving as Treasurer in 1981 and Chairman some years later. In a 2013 interview commemorating DDIFO’s 25th anniversary, Carvalho said of the association, “DDIFO played a role in reaching new levels of growth. It helped

give franchisees sense of direction that the group spoke on their behalf. A lot of stuff we did was not public, but it led us to our goal of protecting franchisees.” All these years later, he is being recognized for his commitment, his hard work and his eye for business. David Carvalho says his dad was always a pioneer in the business. He recalls how Carvalho was among the first to sign up to test new point-of-sale computerized cash register systems, because he realized the technology would help franchisees improve operations and save money. Carvalho also helped establish one of the first – if not the first – cooperatively run central kitchen. “Because we had the kitchens, we didn’t need to make donuts in the store, which meant we didn’t need as much space,” Carvalho says. Once Dunkin’ adapted to a smaller footprint, it enabled the brand to secure more locations, like strip centers, gas stations and convenience stores. Carvalho is understandably proud of his accomplishments as a Dunkin’ Donuts franchise owner. But, there is one experience that stands out, and not only within the Dunkin’ community. In 2013, after two brothers detonated fatal explosions at the finish line of the Boston Marathon, a manhunt for the bombers

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unfolded over five days, crippling the city. After one brother died in a shoot-out with police on Friday after the Monday Marathon, the other was eventually found holed-up in a sailboat, stored in a backyard. This all took place in Watertown, Mass. where the Carvalho business is based.

in Brandon, about 13 miles east of Tampa.

Once the police declared a lock-down for the city, the Carvalhos kept their employees inside their stores, and served coffee and snacks to the only people who were on the streets and in the mall: the police. “We just told everybody, ‘give them whatever they want,’” Carvalho recalls. After the suspect was captured, and things got back to normal, David Carvalho thought, “Our goal was to help our employees and community in any way we could. We hoped it would all work out. They don’t teach you this stuff at business school.”

NICK APOSTOLERES

A new frontier Nick Apostoleres was just 14 when his mother and father moved the family from New Jersey to Florida’s west coast so they could open a new Dunkin’ Donuts shop; the year was 1973. “There was nothing there at the time,” Apostoleres remembers. “There were maybe three Dunkin’s in the entire market of West Central Florida. We were the fourth.” Thomas Apostoleres had worked at a steel mill in Trenton, NJ, and chose to make the move because he recognized that the steel industry was in decline and wanted a fresh start. The family developed their first restaurant at 720 West Brandon Blvd.

But even as the family was learning their new business and understanding their new customers, fate intervened. “My dad was diagnosed with leukemia and died two weeks later. He was just 49,” Apostoleres says. “We were really thrown into the fire.” Apostoleres was 16, but ready and willing to take an outsized role running the business with his mother Kitty and sister Stephanie. Two years after Thomas died, the family purchased another location, near the famous Busch Gardens theme park. Stephanie and her husband ran that shop for a time, but ultimately decided to pursue other interests. When Apostoleres took over the operation, he had no idea it would change his life forever. A young woman named Rosalie used to frequent the Busch Blvd. location on her way to work every day. After a time, Rosalie and Nick become acquainted, then better acquainted, and finally were married in 1994. After giving birth to her son Nicholas, Rosalie went to work for her husband’s family business—a move Apostoleres calls “a game changer.” Later, he purchased his mother’s share of the original Brandon shop so she could retire and took perhaps the most significant step of his career, buying a piece of land a half a mile away onto which he could relocate the shop and build a drive-thru. The move gave Apostoleres ownership of his land and the drive-thru doubled his sales. For a time, the Brandon shop was the busiest Dunkin’ in the state of Florida. The increased profits helped him buy land to develop other locations. Apostoleres says Tampa, like many southern markets, treated Dunkin’ Donuts like a donut shop, not a coffee stop. “The Tampa market wasn’t like those markets in the Northeast. It took years for the market to transition from donuts to coffee,” which meant he needed to be careful with site selection. “You can’t have the same kind of density with donut shops as you can with coffee shops.”

Part of his job has always been working closely with Dunkin’ Brands to help them understand the regional differences, like seasonal marketing. In New England, summer was Dunkin’s busier season and got more marketing support, but in Florida, summer was the slow time; winter – with its influx of snowbirds from the north – was prime time. He fought to have greater marketing muscle for Florida’s busy season. Working with the brand became Apostoleres’ mission. He joined the Ad Committee, served in leadership roles on the RAC and eventually served 3 terms on the BAC. “My goal was always to help the franchisees here work with the brand to see the Florida had every opportunity to succeed,” says Apostoleres, whose first term on the BAC coincided with the end of the Great Recession, which was particularly hard on Florida. In the following years, more Dunkin’ locations have opened in Florida, and more money has been funneled into advertising. The result, Apostoleres says, is that today Tampa behaves more like a Northeast market, though coffee is still only 50 percent of sales and competition for cheap coffee from convenience stores and McDonalds is more intense than in many Northeast cities. While he prefers not to soak in the limelight, Nick Apostoleres appreciates being added to the DDIFO Franchisee Hall of Fame. He recognizes that his career with Dunkin’ Donuts has coincided with the brand’s success in the Southeast. 40 years ago, Dunkin’ was a bit player in the Tampa market. Today, thanks to the commitment of the local franchisee community – and the hard work of the Tampa franchisees in particular – Dunkin’ is a household name. “I’ve been blessed to be a part of this brand and to have the success I’ve had,” Apostoleres says. “I owe that success to my parents, Thomas and Kitty, who had the courage to relocate their family to Florida and start a new life with Dunkin’ Donuts.”

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INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 17

Breaking into the Bay Area New franchisee expands his roots as owner of area’s first new Dunkin’

By Matt Ellis

rogressive, friendly and laid back are some of the ways people describe the “San Francisco attitude.” But, laid back is not how the Bay Area has greeted the return of Dunkin’ Donuts after a 16 year absence. At one time, Dunkin’ Donuts had 15 stores scattered across California, but closed them all by 2000. The first new Dunkin’ Donuts restaurant in the San Francisco Bay Area opened on June 22, 2016 in Walnut Creek, California, 25 miles east of San Francisco. “The first day we opened, we had a line that went down the street and around the corner. People waited for two hours to get to the counter,” says Matt Cobo, who signed a development deal with Dunkin’ Brands to open 12 restaurants over the next eight years in Contra Costa County. We spoke to him on Day 19 of his opening and he told us he had just had his busiest day yet, selling more than 800 dozen donuts. Cobo says he was surprised by the attention his shop had generated so far. And, while he is new to Dunkin’ Donuts, Cobo knows a lot about running a restaurant franchise. He spent the last ten years owning Panera Bread locations in California’s wine country, as well as in downtown San Francisco—just across from the city’s baseball stadium, AT&T Park. His new brand may be less familiar, but the community where he opened is anything but. Cobo was born in Walnut Creek, in a hospital across the street from his new Dunkin’ Donuts shop. “The doctor who delivered me came to the counter the other day.

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He’s known me as long as my mom has,” Cobo jokes. As he is learning, owning the Bay Area’s first Dunkin’ Donuts location has specific challenges, but, perhaps none more important than managing the sales mix. So far in his short tenure as a Dunkin’ owner, 76 percent of sales have been in donuts. “How do we move the mix? It starts with customer education. How do you teach customers we are a coffee shop?” One way, Cobo says, is to get people thinking about their beverage right away. “It’s really a grassroots education to teach our customers who we really are, a coffee shop. We start the counter relationship with, ‘Welcome to Dunkin’. Can I get a drink started for you as you pick out your donuts?’” he says.

The Market Once viewed as a sleepy suburb, Walnut Creek has emerged as an outpost of cool in San Francisco’s metro area. It is a transit hub which connects key highways and is home to a Bay Area Regional Transport (BART) light rail station. It’s known for its open spaces, good schools and culture. Shopping and dining is available in the city’s newly renovated, historic downtown. “Our area is close to but not part of Silicon Valley, so as a community we are fairly well-to-do, but living here is more affordable than other parts of the Bay Area. We have experienced a revitalization of our downtown area as our traditional retailers have reinvested

INDEPENDENT JOE â&#x20AC;¢ AUGUST/SEPTEMBER 2016 19

BREAKING INTO THE BAY AREA in their facilities. New apartment and condo buildings have been developed to meet the needs of younger people and those looking to downsize,” says Walnut Creek Mayor Loella Haskew. Its population of 67,000 includes many people with East Coast and Chicago connections, according to Mayor Haskew, herself a New York native. “Dunkin' Donuts is a part of their growing-up culture too. So now that Matt has opened this store, they can have a touch of home without having to travel further than downtown Walnut Creek.” The city has several Peet’s and Starbucks coffee shops, but Mayor Haskew says Dunkin’ brings something different. “Dunkin' Donuts is far more approachable and down to earth making it easier to enjoy a snack and a beverage.” According to recent labor statistics, less than six percent of Walnut Creek's population is between 18 and 24, the prime age for part-time counter help. Cobo says he was concerned about the pool of labor, especially after he received only eight job applications in the first week he began advertising for open positions. On opening day, he had 48 people on his payroll, but it wasn’t enough. “I thought we needed 50 to 60 people. Dunkin’ Brands told us to hire 80. Now I think we need 70, at least,” he realizes. Like most new franchisees, Cobo has his own stories about

working from 4:00 in the morning until 10:00 at night. He calls it, “part of the deal,” and doesn’t mind putting in the time. “It’s a round-the-clock proposition at the beginning. Being part of it fuels me. I have no complaints.” Cobo credits his wife as being super supportive. The couple has two children: a six-month-old and a two year-old toddler.

Labor Costs One thing Cobo learned through his Panera franchises is that labor is a huge expense in California. “At my downtown Panera, we had to pay San Francisco’s minimum wage of $12.25 per hour. I recognize there is a challenge with the cost of labor in this state,” he says. California’s minimum wage will rise to $15.00 per hour in 2022, a fact that Cobo has already taken into his accounting. “I think it further underscores how you have to be sound operationally,” he says. “There is no overtime in my organization. We schedule people carefully; it takes a lot of time. You have to be prepared on a daily basis. It’s challenging.” One way Cobo has saved on labor costs – and bought himself extra time to hire new employees – has been accepting the generous assistance of other Northern California franchisees. Cobo says OJ Alva, who is opening the Half Moon Bay Dunkin’ location and Nick Disha, who is opening the Marin and Napa County market in the next few months, have offered invaluable (and free) assistance. It’s indicative, he says, of how all area franchisees are working together to make sure Dunkin’ Donuts is successful in its return to the state. “Other franchisees are telling me they are learning as much as we are right now. Everyone is new and we are all figuring it out.” Cobo says the learning curve is way beyond what he expected, perhaps because Dunkin’ Donuts is run so differently from Panera.

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20 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

Cobo is quick to point out that Dunkin’ Brands has provided tremendous support for the new franchisees in Northern California. He also has nothing but praise for the franchisee-owned cooperative supply chain, National DCP. “The service is great,” he says. It is 735 miles from Walnut Creek to closest NDCP distribution center in Phoenix. The trip can take 12 hours each way, and counts for two transit days. According to Scott Carter, NDCP chief, trucks carrying Dunkin’ Donuts coffee, cups and other supplies drive long distances to serve Dunkin’s growing footprint. The furthest distance is 1,000 miles from the distribution center outside of Chicago to Denver. Next furthest is 900 miles from Orlando to restaurants in Houston. Distance demands new franchisees like Cobo plan their orders accordingly. On Sunday, Cobo places his order for Tuesday’s delivery. “We have to get better at placing orders,” he says. “Given the volume, it’s been hard for us to accurately predict what we will need. Once we get stabilized and see patterns, we will be able to work within the timeframe.”

What happens if they run out of something? Not long after he opened the shop, Cobo drove to the closest Dunkin’ shop in Tracy, Calif. – some 50 miles away – to borrow a tub of glaze, because he had donuts in need of finishing and his NDCP delivery was still two days away.

The state of competition Operational considerations aside, Cobo has the challenge of starting up his business in the face of established chains like Starbucks and Peet’s Coffee, as well as local, specialty-coffee retailers like Rooted Coffee and Pacific Bay Coffee Co. & Micro-roastery. Cobo isn’t too concerned about specialty retailers and mom and pop shops. “There is room for them, there is a market for them and I love

them too,” but he points out Dunkin’ is more competitive on price. “How many people can have a $6.00 coffee every day? We want to be the option for the plumbers and soccer moms. We are the everyman’s cup of coffee,” he says. That’s one of the reasons Cobo’s Dunkin’ Donuts restaurant gives a 50 cent discount on coffee purchases to any police officer or firefighter. He says it’s his way to simply say, “Thank you for your service.” Dunkin’ franchisees understand what makes each of the communities they serve special and unique. For Cobo, knowledge of the market is second nature. In fact, he’s looking forward to saying hello to many long-time residents he knew growing up in Walnut Creek, and to the many more he will get to know as the owner of Walnut Creek’s Dunkin’ shops.

•

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INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 21

Missouri Franchisee is Accustomed to the

Ups and Downs

of Business

By Cathy Cassata

hen you’ve spent most of your professional career in the roller coaster world of theme parks, becoming a Dunkin’ Donuts franchise operator hardly seems like the next logical step. But for Cory Roebuck – who toiled for 17 years managing amusement parks and attractions up and down the coast of California before ending up in Branson, Missouri – the decision to open his own Dunkin’ Donuts restaurant was one that was driven by an entrepreneurial spirit, but rooted in practicality. “I’m an entrepreneur at heart, and I love making money, but it wasn’t until later in my career and life when I thought to myself, ‘I make money for other people.

22 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

Could I perhaps start my own business and be an entrepreneur?’” Roebuck says. “It tugged on my heart for a while, and after I talked it over with my wife Katie I thought, I’m forty years old and I’m either going to have to do this now or convince myself that I’m going to spend the rest of my career at theme parks. It had been a great career, and it was great fun actually, but we made the decision to go out on our own and start our own business.” The next decision was whether to join a franchise system, or go it alone. With a wife and family (three small children) to take care of, Roebuck decided he didn’t want to take a chance on starting a new

enterprise from scratch because of the potentially long time period before the business would become viable, if at all. “So we decided to franchise. A franchise comes with a proven formula, and therefore there’s less risk of failure,” he says. The next task was to find the right system. During their research, he and Katie were amazed at the number of different franchise opportunities, many of which they had never heard of. Katie came across an article on the internet entitled, “Top Twenty Franchises to Own,” and as they went through that list, every one of them was represented in the Springfield area, except Dunkin’ Donuts; Springfield is the state’s third largest city.

we got a call from the Springfield real estate broker, who told us that another brand (that had a restaurant building under agreement) just backed out and it became available.” That, he says, was the sign they needed to move forward with the deal. Roebuck created Ozark Donuts, LLC and inked an agreement to open three Dunkin’ Donuts restaurants in Springfield and one in Branson. Their inaugural store would open in December 2015—just in time for Christmas. As Roebuck recalls, the months leading up to the opening were hectic, to say the least.

“You could have hit me in the head with a two-by-four. It was like, ‘Wow! Why not Dunkin?’” said Roebuck. “We loved the fact that it’s all about the coffee now, and that it’s highly repeatable. A franchise had already been in the area (in nearby Branson, which only operated during tourist season and closed in 2011), so there was great brand recognition and brand loyalty and a following here, so we went with Dunkin’.” Once he decided to become a franchisee, Roebuck and his father Toby decided to team up. Dunkin’ was looking for an operator to open four locations in the Springfield market by 2019. Father and son drove three hours to a newly-opened

Dunkin’ location in Columbia, Missouri and made their presentation to brand executives. “And as my father and I drove home, we were asking one another, ‘Hey, is this really what we want to do, is this the right thing?’” Roebuck recalls. Among their chief concerns was real estate. Both Roebuck and his father are local real estate brokers so they were aware that good locations in Springfield were hard to come by. As they drove back from Columbia that day, Roebuck says, fate intervened. “We said a prayer, and a minute after that,

Roebuck went to work converting the former Backyard Burgers location on S. Campbell Avenue in Springfield into a Dunkin’ Donuts. While the construction was underway, he got busy with his Dunkin’ training, spending four weeks at Dunkin’ Donuts University, and two weeks behind the counter at a shop in Schererville, Indiana. At the same time, he was busy overseeing the renovation and equipment purchases. “It was a [hectic] time in my life, because we were the only store in the area and it was difficult for us to hire and do training for our store leadership,” Roebuck recalls. He and his team returned to the Columbia restaurant where Roebuck made his initial pitch to run a Dunkin’, for two weeks of intensive training. It didn’t get any easier when they returned to Springfield to prepare for their preChristmas opening. “Unfortunately, the construction was still going on at the store, and it was a hard hat area, so the employees had to wear hard hats during

INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 23

FRANCHISEE PROFILE: ROEBUCK

training,” laughs Roebuck.

spring 2017 opening.

At 5:00 a.m. on December 21, 2015, Roebuck opened the doors. The team looked at it as a “soft opening,” with little fanfare, but the word got out on social media. By afternoon there was a line out the door. “By the time we closed, I literally had to stand in the street and stop cars from pulling into the parking lot at 10 o’clock at night,” says Roebuck.

“One of the biggest struggles we’ve had is to try and find the right location, and obviously location is one of the biggest factors for success with Dunkin’. Get the right location and all the other pieces come together. It’s amazing.”

He did not anticipate that immediate level of enthusiasm, and stayed on with the bakers all through the night, making donuts. “The next thing you know I’m still there and we’re opening the store on the second day, and I realized I had been up for 40-plus straight hours,” he says. “I went home and took a shower, changed my clothes and got some sleep. It was a tough opening for me and my leadership staff as well. We pulled long hours those first couple of weeks just to accommodate our guests.” Roebuck says the long hours continued for the first couple of months, until things settled down and his operations normalized. By then, it was time to get the process started for his next location, this one in nearby Branson, a popular vacation destination about 45 miles from Springfield. “With the tourist market there, we’re waiting a little bit before we open that one.” Roebuck already has a building under contract and is planning to begin construction this coming winter with a scheduled

24 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

Roebuck has also realized that a drivethru would be a boon for business. His development deal calls for standalone – or endcap – locations only but he says he’s looking at whether he can add a drive-thru to his present location. He’s also considering other options having fielded inquiries from local gas stations about putting a Dunkin’ into their C-stores. With the first store, Roebuck decided to incorporate sustainable practices into the construction process, and he says the decision to “go green” was twofold. “First, we think about the bigger picture and the impact we’re having on the environment, and it just feels like the right thing to do,” he asserts. “The other piece of it is that from a financial standpoint, it makes absolute sense as well.” The current store uses LED lighting, low-flow plumbing fixtures, zero volatile organic compound (VOC) interior paints, as well as other sustainable features. “Those are things that give us payback over time,” Roebuck says. “We won’t see that return in the first year, but in the next few years we’ll see a return on that investment.” As a result of his efforts, the

Springfield, Missouri restaurant is the first in the Midwest to receive the DD Green certification for sustainable and energyefficient renovation of the building. Roebuck also wants people to know that his faith plays an important role in the way he operates his business. “One of the things that’s unique with us, is that I wanted a business that was openly Christian,” says Roebuck. “I’m obviously not going to be proselytizing to customers as they come in, but I just want them to know that it’s important for me that my faith is evident in how we deal with our employees and customers. Our mission statement is actually to honor God by positively impacting the lives of everyone that comes into Dunkin’ and those around us.” Roebuck tries to practice those principles beginning with the way he treats his employees. He offers incentive programs such as 10 cent per month raises and movie tickets for employees who meet personal goals (such as attendance and positive guest surveys) and says these incentives have paid immediate dividends. “We’ve done a great job of creating a culture where I think our employees feel appreciated. We have not had to hire a single employee since we opened, and we’ve retained just about every single one of our managers. I look at it this way: How much do I pay someone else to come in and train someone to start a new position when I lose my hourly employee? If I can do anything to retain them I’m probably better off.”

Those principles also extend to support for local charitable efforts, such as the Greene County 100 Club, a not-for-profit organization that provides financial support to the surviving spouse and dependent children of police officers and firefighters killed in the line of duty in Greene County. Roebuck, himself, is a volunteer firefighter and recalls a harrowing experience he had on the job. “I was responding as a firefighter to a flash flood, and the boat that I was in flipped, and I got trapped. I was holding onto a tree in the rushing water in the middle of the night and I thought I was going to die, and all I could think about was my family.” Roebuck survived the ordeal, and when he was approached by Greene County 100, “that was the first thing that came to my mind. We need to make sure we’re supporting the families of fallen firefighters and police officers.” At the grand opening in January, Roebuck presented the charity with a $1,000 check. He further supports first responders by offering firefighters,

police officers, and paramedics a 50 percent discount. He also helps the police improve community relations by offering his store for the Springfield Police Department’s “Coffee with a Cop” program. So how have his theme park experiences helped him in his Dunkin’ career? “What I love about operating a Dunkin’, is

that it is very much the same philosophy,” Roebuck says. “When you go inside a theme park, we want you to forget your everyday life and become engrossed in that experience. When you walk into Dunkin’ it’s also about that experience. When you come in, hopefully our employees recognize you and say hello, and it’s a great environment and atmosphere. You can make their day a little better.”

•

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Chicago • St. Louis • Los Angeles

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Directory BusinessMembers Members Directory ofofBusiness ACCOUNTING Adrian A. Gaspar & Company, LLP, CPAs

Robert Costello cpas@gasparco.com • 617-621-0500 1035 Cambridge Street, Ste. 14, Cambridge, MA 02141 www.gasparco.com

Brendon Pierson

Jessica L. Worthy 732-681-4800 • jworthy@brendonpierson.com 6333 North State Highway 161, 4th Fl., Irving TX 75038 www.brendonpierson.com

Cynthia A. Capobianco, CPA

Watchfire Signs

Bridge Funding Group

David Watson 205-542-7881 • David.Watson@watchfiresigns.com 1015 Maple Street, Danville, IL www.watchfiresigns.com

Sue Hacker Nelson 317-258-0983 • SNelson@BankUnited.com 215 Schilling Circle, Suite 100, Hunt Valley, MD 21031 www.bridgefundinggroupinc.com

COMMUNICATIONS

CIT

Comcast Business Services

866-407-6338 • national_sales@cable.comcast.com 500 South Gravers Road, Plymouth Meeting, PA 19462 www.business.comcast.com/internet

Granite Telecommunications

Douglas Solomon 603-433-9413 • DSolomon@cit.com 155 Commerce Way, Portsmouth, NH 03823 www.cit.com

City National Bank

David Sandoval 213-673-9026 • david.sandoval@cnb.com 555 S. Flower Street. Los Angeles, CA 90071 www.cnb.com/franchise-finance

Cynthia Capobianco 401-822-1990 • cynthia@capobianco.necoxmail.com 60 Quaker Lane, Ste. 61, Warwick, RI 02886-0114

Daryl Chelo 401-334-3176 • dchelo@granitenet.com 1 Albion Rd., Lincoln, RI 02865 www.granitenet.com

Marcovich, Mansour & Assoc. Inc.

Time Warner Cable Business Class

Deborah Blondin 603-606-4724 • D.Blondin@Easternbank.com 11 Trafalgar Square, Ste. 105, Nashua, NH 03063 www.easternbank.com

COST RECOVERY

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

Joseph Mansour 401-334-9099 • jmansour@mm-cps.net 640 George Washington Hwy., Lincoln, RI 02865

Neovision Consulting Inc.

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

Nimble Accounting Software

Subbu Krishnan 480-434-9936 • subbu@nimbleaccounting.com 200 Motor Parkway, Ste. D-26, Hauppauge, NY 11788 www.nimbleaccounting.com

Sansiveri, Kimball & Co., LLP

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

BACK OFFICE Jera Concepts

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

Tricia Petway 919-654-4115 • tricia.petway@twcable.com 4200 Paramount Parkway, Morrisville, NC 27560 bc2.timewarnercable.com/nationalsales/copartner/dd1.html

EF Cost Recovery

Ed Craig 774-263-7388 • ecraig3@efcostrecovery.com 32 William St., New Bedford, MA 02740 www.efcostrecovery.com

Performance Business Solutions, LLC

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

FINANCE Analytix Solutions

Eastern Bank

Fidelity Bank

Joyal Capital Management Franchise Development

Daniel Connelly 508-747-2237 • dconnelly@joycapmgt.com 50 Resnik Road, Plymouth, MA 02360 www.jcmfranchise.com

Marlin Franchise Finance Group

Chris Holland 856-505-4206 • cholland@marlinfinance.com 300 Fellowship Rd, Mount Laurel, NJ 08054 www.marlinfinance.com

Pacific Premier Franchise Capital

Satish Patel 781-503-9000 • snpatel@analytix.com 800 West Cummings Park, Ste. 2000, Woburn, MA 01801 http://insight360.analytix.com/dunkin

Sharon Soltero 402-562-1801 • ssoltero@ppbifranchise.com 3154 18th Avenue, Ste. 3, Columbus, NE 68601 www.ppbifranchise.com

Bank of America/Merrill Lynch

Santander Bank

Homeland Builders

Earl Meyers 585-546-9162 • earl.w.meyers@baml.com 1 East Ave., Rochester, NY 14450 www.bankofamerica.com

Peter J. DiFilippo 401-752-1060 • peter.difilippo@santander.us One Financial Plaza, Providence, RI 02903 www.santanderbank.com

Bank RI

TCF Franchise Finance

Persona Signs, Lighting, Image

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

Bill Johnson 952-656-3268 • wjohnson@tcfef.com 11100 Wayzata Blvd., Ste. 801, Minnetonka, MN 55305 www.tcfef.com/franchise

Berkshire Bank

TD Bank

Poyant Signs

David L. Sabourin 508-329-7851 • dsabourin@berkshirebank.com 303 Turnpike Road, Westborough, MA 01581 www.berkshirebank.com

Steven Song Marketing Door to Door

Angelo Maragos 949-293-0152 • angelo.maragos@bmo.com 7700 Irvine Center Drive, Ste. 510, Irvine, CA 92618 www.bmoharris.com/franchisefinance

BUILDING Steven & Brian Ribeiro 465 Sykes Rd, Fall River, MA 02720 508-677-0401 • brianr@homelandbuilders.com www.homelandbuilders.com Susan Koelzer 700 21st Street SW, Watertown, SD 57201 800-843-9888 x390 • skoelzer@personasigns.com www.personasigns.com Jackie Linhares 125 Samuel Barnet Blvd, New Bedford, MA 02745 508-207-1273 • jlinhares@poyantsigns.com www.poyantsigns.com Steven Song 626-423-2660 • steven@marketingD2D.com 70 South Munn Ave., E. Orange, NJ 07018 www.marketingD2D.com

BMO Harris Bank N.A.

Chris Capecci 732-966-6868 • Christopher.Capecci@td.com 535 East Crescent Avenue, Ramsey, NJ 07446 www.tdbank.com

United Bank

Mark McGwin 508-793-8342 • mmcgwin@bankatunited.com 33 Waldo St., Worcester, MA 01642 www.bankatunited.com

DDIFO® does not endorse or recommend commercial products, processes, or services. A DDIFO® Business Member 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.

26 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

PLEASE VISIT THE DDIFO BUSINESS MEMBER DIRECTORY ONLINE AT WWW.DDIFO.ORG FOOD PRODUCTS

OPERATIONS

PepsiCo/Quaker

3M Company

Bryan Gruttadauria 508-245-9195 • bryan.gruttadauria@pepsico.com 1111 Westchester Ave., White Plains, New York 10604 www.pepsico.com

HUMAN RESOURCES HIRETech

Lindsay Conderman 281-558-7100 x123 • lconderman@hiretech.com 1500 S. Dairy Ashford Rd. Ste. 240, Houston, TX 77077 www.hiretech.com

Paychex

Ryan Birtles (843) 576-9337 • rbirtles1@paychex.com 7204 Copperfield Ct, Wilmington, NC 28411 www.paychex.com

Paycor Inc.

Jim Ferreira (203) 530-3512 • jferreira@paycor.com 12 Dale Dr., Greenwich, CT 06831 www.paycor.com

Snagajob

Joe Gabriel 703-457-7873 • joe.gabriel@snagajob.com 1110 N. Glebe Rd. Ste. 220, Arlington, VA 22201 www.snagajob.com/employers

TalentReef

Cassie Altbrandt 303-667-2328 • caltbrandt@talentreef.com 210 University Ste. 300, Denver, CO 80206 www.talentreef.com

INSURANCE 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

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

Marks & Klein LLP

Justin Klein 732-747-7100 • justin@marksklein.com 63 Riverside Avenue, Red Bank, NJ 07701 www.marksklein.com

Paris Ackerman & Schmierer LLP

David Paris 973-228-6667 • david@paslawfirm.com 103 Eisenhower Parkway, Roseland, NJ 07068 www.paslawfirm.com

Bill Muenkel 952-484-4875 • wemuenkel@mmm.com 3M Center, 220-12E-04, St. Paul, MN 55144 www.3M.com/communications

Access Development

Colton Henderson 801-954-2172 • colton.henderson@AccessDevelopment.com 1012 West Bearsley Place, Salt Lake City, UT 84119 www.accessdevelopment.com

Alarm Grid

Joshua Unseth 954-933-5095 • support@alarmgrid.com 2510 NE 47th St, Lighthouse Point, FL 33064 www.alarmgrid.com/alarm-monitoring-dunkin-donuts

Bunn-O-Matic Corporation

Todd Rouse 800-637-8606 • Todd.Rouse@bunn.com 1400 Stevenson Drive, Springfield, IL 62703 www.bunn.com

Cardtronics

Tom Spooner 973-452-4131 • tspooner@Cardtronics.com 628 Route 10 - Ste. 8, Whippany, NJ 07981 www.cardtronics.com

Carrier Corp

Bob Eckweiler 973-222-6742 • Bob.Eckweiler@carrier.utc.com 3 Hollyhock Way, Newton, NJ 07860 www.carrier.com

Crane Payment Innovations

Ray Picard 603-809-3584 • ray.picard@cranepi.com 1 Executive Pk. Dr. #202, Bedford, NH 03110 www.CranePI.com

DTT Surveillance

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

Ecolab

Arliene Bird arliene.bird@ecolab.com 8300 Capital Drive, Greensboro, NC 27409 www.ecolab.com/Businesses

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.

Alexander Pezzolla 732-572.0706 ex 202 • alex@jarrettforcash.com 1315 Stelton Road, Piscataway, NJ 08832 www.jarrettforcash.com

MCD Innovations

Will Knieper 214-883-5656 • wknieper@mcdinnovations.com 3303 N.McDonald St., McKinney, TX 75071 www.mcdinnovations.com

New England Drive-Thru Communications

Angela Bechard 603-475-2046 • angela@nedrivethru.com 999 Candia Rd. Ste. 7, Manchester, NH 03032 www.nedrivethru.com

OnsiteRIS, Inc.

Joey Agee 404-952-2745 • joey.agee@onsiteris.com 2010 Avalon Pkwy, Ste 400, McDonough, GA 30253 www.onsiteris.com

Pentair Filtration & Process

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

Prince Castle/Silver King

Zachary Waas 630-873-0088 • waaz@princecastle.com 355 East Kehoe Blvd., Carol Stream, IL 60188 www.princecastle.com

R.F. Technologies, Inc.

Michael Murdock 847-495-7350 • michaelm@rftechno.com 330 Lexington Drive, Buffalo Grove, IL 60089 www.rftechno.com

safeTstep by Payless Shoesource

Kyle Clendennen 785-295-6664 • kyle.clendennen@safetstep.com 3231 Southeast Sixth Ave, Topeka, KS 66607 www.payless.com/safetstep-1/

Shoes For Crews

Rebecca Tharp 877-437-6176 • rebeccat@shoesforcrews.com 250 S. Australian Ave. West Palm Beach FL 33401 www.shoesforcrews.com

SKAL East, Inc

Kevin Huerth 781-806-3139 • kevin@skaleast.com PO Box 303, 31 Eastman Street, Easton, MA 02334 www.skaleast.com/index.cfm?keyword=dunkin

Staples Advantage

Joe Shea 508-238-0106 • joseph.shea@staples.com 31 Commercial St. Sharon, MA 02067 www.staplesadvantage.com

Suzo Happ

Tom Orton 847-660-4289 • Tom.Orton@suzohapp.com 1743 Linneman, Mt. Prospect, IL 60056 www.suzohapp.com

Thank You to Our Business Members! INDEPENDENT JOE • AUGUST/SEPTEMBER 2016 27

A LOOK ON THE LAW

BY JUSTIN M. KLEIN, ESQ.

How Equal Access Laws Affect Franchise Owners E

qual access” has meant various things, for various classes of people, throughout the history of the United States. For some, it has meant being able to eat at the same restaurants or drink from the same water fountains. For others, it has meant having the right to vote. And, notwithstanding great strides in this country to provide equality for all, who actually comprises this “all” has never been formally defined in the law. Regardless of one’s political or social proclivities, providing “equal access for all” is a significant and ongoing political and social debate, with lawmakers and society at-large defining and redefining its meaning. As new, uncharted issues involving civil liberties continue to penetrate society, they inevitably stretch beyond those directly affected to impact businesses, which cater to the general public. Today, equal access for transgender individuals, in particular, has taken the forefront of political and social debate. And, it has become an important issue for business owners to consider. As a franchise owner, you may have relationships with customers, employees, and even contractors who are transgender, even if it is not immediately apparent to you. As such, it is important to ensure your business is a safe and comfortable environment, free from discrimination. What’s more, as a business owner, it is imperative you are knowledgeable and well-versed with regard to how these laws relate to your customers, employees, and others who visit your establishments. In the area of equal access for transgender individuals, the so-called “bathrooms laws” have garnered substantial attention recently. These laws generally seek to regulate the use of public facilities – such as bathrooms, changing rooms, or locker rooms – by transgender individuals.

28 INDEPENDENT JOE • AUGUST/SEPTEMBER 2016

While the federal government has weighed in on the debate, several states have passed, or attempted to pass, their own regulations relating to the use of public facilities. Amid the possible confusion from potentially contradictory regulations, it is essential you know what your local laws are, as well as how they mesh with federal laws. For starters, the federal government has taken the position that schools must provide a “supportive” and “nondiscriminatory” environment for transgender students. While this is not a law, it offers guidance as to the federal government’s general position on matters relating to transgender individuals. Separately, individual states – like New York and North Carolina – have enacted “bathroom laws” to declare their state’s position on the issue. These particular state laws vary widely in scope and direction. For example, New York law requires single-stall public bathrooms to be gender neutral. On the other hand, a subset of states want transgender individuals to use only the restroom that matches the gender information on their birth certificate. North Carolina has been successful in enacting such a law, while Wisconsin and South Dakota introduced similar bills only to see them fail in legislative chambers. Other states – including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Massachusetts, Maryland, Minnesota, New Jersey, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Washington, and the District of Colombia – have laws which protect persons based on gender identity, but do not specifically address the transgender bathroom issue. So, what does all this mean for Dunkin’ franchisees? All business owners must comply with the law, which means knowing the law. It also means implementing

procedures and policies to ensure compliance with the law towards the goal of creating the environment that is clean, safe and free from discrimination. There are various ways that your business can be impacted. For example, if you are in a state that expressly regulates bathroom use, you need to be aware of those regulations and comply with any obligations imposed on your business. This may mean something as simple as changing signage or making certain improvements to the premises. You are also responsible to ensure your employees are properly trained on the issues and applicable laws as they relate to customers as well as to co-workers. To avoid liability, you must make certain none of your employees creates a hostile environment for any individual who is in your establishment. Interestingly, the National Labor Relations Board’s joint employer ruling means franchisors like Dunkin’ Brands can take a hands-off approach to employment issues like this, leaving you on your own to understand and comply with all laws which impact the daily operations of your franchise. As such, it is incumbent upon you to learn the issues, to appropriately train your staff, and to have the right team of professionals on call to help you steer clear of any problems. The landscape regarding transgender equal access is changing every day. The United States Supreme Court has agreed to review a recent case on the issue even as legislators in different states continue to examine how to enforce laws pertaining to transgender equal access. The best advice is to be sure you know the issues—and how to comply with any laws that are enacted.

•

Justin M. Klein is a franchise and business attorney with the firm of Marks & Klein, LLP. You can contact him at: justin@ marksklein.com.

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