Independent Joe #47 December 2017/January 2018

WHAT’S

BREWING

NLRB VOTE

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H-2B SUMMER VISAS

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SODA TAX BATTLES December 2017/January 2018

Award-Winning Magazine

FRANCHISEE PROFILE

for D D Independent Franchise Owners

FEATURE

FEATURE

Strength in the Middle

Tax Cuts and Jobs Act

From Baker to Boss

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ACCEPTING CHANGE There is always a certain amount of fear and trepidation about the unknown. Think back to 1999 as we approached the turn of the millennium and the catastrophes that were forecast to accompany Y2K, as it was then known. To hear some tell it back then, computers were going to think the year was 1900, banks would be unable to account for most of the funds they had on deposit, cars wouldn’t run because of their computerized engines, the U.S. electric grid would cease to function and countless other calamities would befall us. Essentially, the turn of the millennium would mean the end of the world as we knew it. Of course, none of that happened

Similar catastrophes have been forecast for the nation under the leadership of President Donald Trump. But, one year into his administration, Trump has gone to great lengths to reset the business climate in a wide variety of ways – several of which directly, and favorably, impact the franchise community. One certain example is the recent reversal of the National Labor Relations Board’s redefinition of a joint employer.

And there are a host of other regulations that are being modified to the benefit of business owners, they include quickie elections, micro-unions, tip pooling prohibitions, inflexible employment policy mandates and net neutrality. In fact, we can expect to see much more by the way of regulatory relief as a result of Trump’s 2017 executive order which states the cost of any new regulation should be offset by the elimination of regulations with the same costs to businesses.

The fear and anxiety that some feel regarding the nation is the

result of change. Face it, we’re all comfortable with the status quo and we get anxious when something unknown – or disruptive – is introduced into the equation.

But change is inevitable and it is what keeps us moving forward.

That’s not something specific to these times, it was something our 35th president, John F. Kennedy, believed as well. “Change is the law of life. And those who look only to the past and the present are certain to miss the future,” he said during an address in Germany in 1963.

Change is certainly on the horizon in Canton, where Dunkin’ Brands CEO Nigel Travis nears the completion of his existing contract and is seemingly relinquishing some of the involvement he’s shown in the past. Company president David Hoffman appears prepared to assume control of the brand, which itself may harken a new direction and more change… For Dunkin’ franchisees, the best advice may be to welcome the change and adapt.

DDIFO is already adapting to a change Dunkin’ Brands is instituting this year. For the first time in a decade, DBI has scheduled a convention for all franchisees for late September in Las Vegas. For the past several years, we have hosted our National Conference in the fall, but the brand’s actions are forcing us to accept the change and adapt.

The result is something that will have a more positive impact on our members and the organization. DDIFO is moving the 2018 National Conference to the spring, which provides more opportunity for venues and is more convenient than the early fall for many of our members. So, with that, I am

thrilled to announce the 2018 National Conference will be held in New Orleans on June 4–5. We not only welcome that change, we believe it will make our signature event even better.

We have made a deal with Harrah’s New Orleans Hotel and Casino for a first class event that will, of course, feature top quality programming and guests. We will introduce new speakers at this new venue, but the quality of the content will not change. Over the past three years, we have received terrific feedback from our members about value the National Conference brings, and we want to continue to raise the bar for our franchise owners and business members, especially in the face of change that is occurring at Dunkin’ Brands.

As Winston Churchill said, “To improve is to change. To be perfect is to change often.” Like any successful organization, DDIFO has proved it is ready, willing and able to adapt to change. With the rescheduled National Conference – and the Big Easy destination – we are even closer to perfection.

Ed Shanahan DDIFO Executive Director

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

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SUB HEADLINE

CONTENTS

From the Executive Director Accepting Change… • • • • • • • • • • • • • • • • 3 What’s Brewing: A Look at State Issues Around the Footprint• • • • • • • • • • • 7 Your Membership Guaranteed• • • • • • • • • • • 9 2017 Tax Cuts and Jobs Act: Mixed Bag for Franchisees • • • • • • • • • • • • • • • 10 Strength in the Middle• • • • • • • • • • • • • • • 12

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15 Cover Story: Why Big Investors are Bullish on Dunkin’ Stock • • • • • • • • • • • • • • • • • • • • • • 15 Franchise Profile: From Baker to Boss• • • • 18 A Look at the Law: Forecasting 2018• • • • • 22 Directory of Sponsors• • • • • • • • • • • • • • • • • • • • 23 Community Corner: The Community is Her Business• • • • • • • • • 26

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INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

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Independent The Magazine for DD Independent Franchise Owners December 2017/January 2018 • Issue #47 Independent Joe® is published

by DD Independent Franchise Owners, Inc. Editors: Edwin Shanahan, Matt Ellis Contributors: Cathy Cassata, Stefanie Cloutier Michael Hoban, Debbie Swanson, 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 978-587-2705 • info@ddifo.org • www.ddifo.org DD Independent Franchise Owners, Inc. is an Association of Member Dunkin’ Donuts Franchise Owners.

INDEPENDENT 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 © 2018 Printed in the U.S.A.

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INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

WHAT’S

BREWING A LOOK AT STATE ISSUES

By Scott Van Voorhis Good old 2017 ended with a bang, with the Trump Administration making good on its promises to axe a controversial ruling that Dunkin’ and other franchise owners have argued undermines the very foundations of franchising.

The National Labor Relations Board has dumped the Obama-era joint-employer rule, which had sowed confusion and stirred fears of unionization in the quick service sector.

But with that out of the way, 2018 still promises even more challenges for which franchisees will need to watch out. There is a tight labor market and a continued push by activists around the country to tax sugary drinks. There are already new minimum wage and sick leave laws, several of which made their debut in states around the country on Jan. 1.

Big vote at NLRB Well that was fast. Approaching the anniversary of its first year in office, the Trump Administration in December scuttled one of the Obama-era’s most controversial policies involving the quick service sector.

The National Labor Relations Board in mid-December voted to rescind its 2015

AROUND THE FOOTPRINT joint-employer ruling that put franchisors on the hook for a range of issues, from pay to hours, traditionally left up to franchise owners.

merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine.”

The NLRB’s ruling means franchisors like Dunkin’ Brands or McDonald’s can’t be held responsible for franchise employees unless they exert direct control over them.

Under the now overturned rule, franchisors could have been on the hook even if the control was indirect, as long as certain conditions were met.

Scramble for H-2B summer visas already underway

Critics argued the ruling unnecessarily muddied the waters and threatened to undermine the foundation of franchising.

The Trump Administration appointed two Republican members to the NLRB over the course of 2017 and enjoyed a 3-2 majority by the time the ruling came up for review.

According to a statement the NLRB published after the vote on Dec. 14, “In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than

OK, 2018 is still young. But franchise owners and other businesses looking to bring in temporary workers under the H2-B visa program in time for summer need to act fast.

The US Citizenship and Immigration Services recently announced it had received enough applications to fill the 33,000 visa slots available during the first half of fiscal 2018.

The agency, part of the Department of Homeland Security, is now taking in applications for the 33,000 H2-B visas for the second half of the fiscal year, with start dates after March 30.

Seasonal and temporary workers from overseas have been in increasingly high demand as the economy has improved and the unemployment rate has fallen.

Faced with pressure from employers desperate for workers, the Department

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

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WHAT’S

BREWING of Homeland Security last fall added an additional 15,000 H-2B visas.

drinks, and sweetened iced coffees and teas.

It remains to be seen whether the Trump Administration will go beyond the 66,000 H-2B visas allotted for fiscal 2018, but Congress has authorized double that number.

While activists have argued that soda and other sugary beverages contribute to obesity, groups representing quick service franchises, small businesses and others say such taxes will hurt sales and kill jobs.

Soda tax battles brewing for 2018

The new Seattle soda tax, in turn, is likely to be a harbinger of things to come in 2018, with battles over proposals to tax sugary beverages heating up across the country.

Seattle kicked off the New Year with a tax on soda and other sugary drinks.

The City Council last June approved the new tax on distributors of 1.75 cents per fluid ounce. The new surcharge, which took effect Jan. 1, covers Coke, Pepsi, energy and sports

Support for soda taxes is on the rise in other parts of the country as well. As Arizona struggles to raise money for education, voters in this generally anti-tax state appear to be sweet on taxing soda. A recent poll found that 59 percent of voters in Arizona would be in favor of a .02 cent per ounce tax on soda if the money raised was dedicated to schools, the Arizona Republic reports.

State lawmakers in Phoenix are

considering expanding Proposition 301, which adds a .6 cent sales tax and raises $600 million in education funding every year, and is set to expire in 2021.

Next door in New Mexico, a state senator wants to commission a study looking at the benefits of taxing sugary drinks. If the report comes up positive, Sen. Jerry Ortiz y Pino said he will draft legislation to extend the state sales tax on other items to soda.

Albany and Berkeley, two California cities – and Philadelphia – all now have soda taxes, while San Francisco, Oakland and Boulder have all passed legislation.

However, pushback is also growing. Voters in Santa Fe shot down a proposal last year to slap a surcharge on soda, while Cook County in Illinois, which includes Chicago, has just repealed its short-lived tax on soft drinks.

Wages headed up/sick leave on the menu The minimum wage went up in 18 states

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INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

PERFORMANCE BUSINESS SOLUTIONS, LLC

on Jan. 1st. According to the Economic Policy institute, ten were the result of legislation or ballot campaigns, they are: Vermont, Rhode Island New York, Maine, Michigan, Arizona, California, Colorado and Hawaii.

The minimum wage has gone up in another eight due to built-in inflation adjusters, they include: South Dakota, Alaska, Minnesota, Florida, Montana, Missouri, Ohio, and New Jersey.

Sick leave is also spreading. With the New Year, Washington joined six other states and the District of Columbia that now require businesses to offer paid sick leave. New York has also upped the ante with its new law that will require employers to provide up to 12 weeks of paid family leave at 67 percent of the employee’s salary by 2021 when the mandate is fully phased in.

Summing up As we’ve seen, rules and regulations have a way of eating away at profit margins for small business owners. The soda tax, minimum wage and sick leave all bear watching, as does the patchwork of regulations popping up to protect consumer data and privacy in the wake of major incidents like the data breach at Equifax. Throughout the year, Independent Joe will continue to monitor the issues, rules and regulations that will impact how you operate your business and profit from it.

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YOUR MEMBERSHIP GUARANTEED As a membership-driven organization, DDIFO works diligently on behalf of its members—providing information, advocacy and an independent voice. In 2018, as questions swirl over the future of health insurance, taxes, regulatory policies and the future of Dunkin’ Brands, DDIFO is wellpositioned to continue its nearly 30-year mission.

Again this year, National DCP (NDCP) is helping DDIFO collect dues from Dunkin’ franchisee members. NDCP will be sending a series of emails to franchisees advising them how best to pay their DDIFO membership and join their peers in supporting their independent franchisee association. The email will advise that “Members wishing to join DDIFO must authorize NDCP to ACH their account on file for $250 per PC. All PCs linked to your ownership group will be charged and invoiced via ACH in the amount of $250 per PC according to your current PC ACH instructions on file.”

“What it means, is that current members don’t need to take any action to continue receiving the benefits of DDIFO membership,” says Ed Shanahan, executive director of the organization. “Only those who are joining for the first time, or re-joining DDIFO, or current members wishing to opt-out of continuing their membership need to respond to the emails that will come to them from NDCP.” While many franchisees prefer the electronic form of payment, there are those who like to limit the number of automatic cash transactions they authorize each year.

According to Shanahan, those franchisees who want to pay DDIFO directly – and opt out of the ACH payments – can arrange to be billed directly. He also notes the cost of direct billing, versus ACH payments, is the same; there are no additional fees.

In addition to the 2018 notifications coming from NDCP, DDIFO will send emails to members reminding them of the dues collection, explaining the process in detail and reiterating that people who have never authorized an ACH dues payment through NDCP need to click on the DDIFO Enrollment Survey Link included in the emails and fill out the authorization form. Once that’s done, their membership is confirmed and will renew automatically in subsequent years.

“We appreciate the support NDCP provides in the dues collection process,” Shanahan says. “The ACH offers a seamless, direct process for members and for DDIFO. If, however, anyone has questions about dues collection, I invite them to contact me directly at the DDIFO office, or by email, ed@ddifo.org."

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 9

FEATURE

2017 Tax Cuts and Jobs Act a Mixed Bag for Franchisees

W

ith all that has been written about the long-awaited $1.5 trillion Tax Cuts and Jobs Act of 2017, of the most particular interest to Dunkin’ Donuts franchisees may be the comments of Robert Cresanti, the CEO of the International Franchise Association.

In a statement issued prior to the signing, Cresanti thanked the Senate for “listening to the concerns of business owners and working to ensure small businesses see tax relief. For years, the burdensome and complex tax code has held back small business owners and stifled new investments.”

While much of the nitty gritty of the new tax laws are still being reviewed, it’s pretty clear that many of the provisions should prove to be a boon for franchisees – particularly in the near term. Of course, for any individual franchisee or franchise group, the insight of a tax professional is critically important to fully understand the various implications. That’s one reason we put a call into Nish Parekh, principal of Neovision Consulting, a Cranbury, NJ-based CPA firm that specializes in franchise restaurants. Parekh also happens to own a Dunkin’ Donuts and a Wingstop restaurant.

“I think this is a good thing, especially for the small business owners,” he says “For franchisees, it will help with growth and planning [as] well as the reduction

in taxes. You can then use these savings generated from that reduction to reinvest into the business by hiring additional employees, giving raises or opening up additional locations.”

The reduction in tax rates will be significant for franchisees in the short term because most small business owners are set up as LLCs or S-Corps and pay their personal and income taxes together. For such entities there is a blanket 20 percent reduction of qualified business income for tax years 2018 – 2025.

In the long term, however, Parekh notes the tax law will favor C-corporations, where the company is taxed separately from its owners. Those entities will enjoy a permanently reduced tax rate of 21 percent, down from the prior 35 percent, for the tax years beginning in 2018.

“So the changes allow those in the restaurant business (or any non-service-based industry) to reduce their taxable income by about 20 percent, although there are certain limitations if you cross a certain threshold,” he says.

Among those are changes to the amount business owners can deduct for wages.

Other factors can also affect those deductions. To illustrate, Parekh offered the example of a franchisee whose restaurant revenue is $1 million for the year, with

10 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

BY MICHAEL HOBAN

$700,000 in total expenses. He has a profit of $300,000. “Out of that $300,000, if – and I emphasize the word if – all the applicable nuances that the franchisee is supposed to have in place are in line, then you can reduce that $300,000 in taxable income by 20 percent ($60,000), and you end up only paying taxes on $240,000.”

The new tax law changes how franchisees can expense the cost of equipment. For the next tax year, there will be a 100 percent first-year deduction for new and used equipment acquired and placed in service after September, 27 2017. But, it’s important to note, this provision will begin phasing out in 2023, and will be eliminated entirely in 2026.

Parekh says he is not overly concerned about the long term implications of the phase out. “In five years there may very well be another provision for small businesses, or they may even extend the existing one, much like the changes that have occurred in past years with the 179 deduction.”

The 179 deduction refers to Section 179 of the IRS tax code, which allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year from their gross income. The new tax law increases the maximum threshold for a 179 deduction from $510,000 to $1 million,

and increases the spending cap on equipment purchases to $2.5 million. But there are other considerations worth noting.

“This is kind of a double-edged sword,” says Parekh. “There are tax advantages on the business side, but when you have it flow into your personal return, there are new limitations on what your itemized deductions will be.”

As most people have learned through news reports about the law, state and local income tax deductions are being scaled back dramatically. Families will

for bonus depreciation) is changed to eliminate separate definitions of qualified leasehold improvement, qualified restaurant and qualified retail improvement property. A general 15-year recovery period and straight-line method for qualified improvement property is imposed. Additionally, the Alternative Depreciation System (ADS) recovery period for residential rental property is shortened from 40 to 30 years.

• Net Operating Loss (NOL): For tax years beginning 2018, NOL deduction is limited to 80 percent of the taxable income.

The 2-year carryback rule for NOLs is

• Affordable Care Act Individual Mandate Repealed: For months beginning after 2018, the amount of the individual shared responsibility payment is permanently reduced to zero.

• Alternative Minimum Tax (AMT) Retained: For tax years 2018 – 2025, individual AMT is retained with increased exemption amounts and phase-out thresholds.

• Child Tax Credit Increased: For tax years 2018 – 2025, child tax credit is increased to $2,000 per qualifying child under the age of 17 (up from $1,000 per qualifying child). The income level

“ This is kind of a double-edged sword. There are tax advantages on the business side but when you have it flow into your personal return there are new limitations on what your itemized deductions will be.” now only be able to deduct up to a total of $10,000 in property and income taxes, and in states with the highest tax rates, that can be problematic. So, while the standard deduction has roughly doubled to $12,000 for an individual or $24,000 for married couples, it may not make up for the loss people realize in after-tax income resulting from the reductions in the state and local deductions.

According to Parekh, there are a number of other changes to the tax code that franchisees should be aware of. They include:

BUSINESS TAX PROVISIONS • Interest Expense Limitation: For tax years beginning 2018, net interest expense in excess of 30 percent of the company’s adjusted taxable income will be disallowed. However, taxpayers with average annual gross receipts for the prior three years of $25 million or less are exempt from this limitation.

• Alternative Minimum Tax (AMT) Repealed: The new law repeals the corporate AMT effective for tax years beginning after December 31, 2017. While AMT is repealed, the new law also generally limits the Net Operating Loss (NOL) deduction for a given year to 80 percent of taxable income.

• Shortened Recovery Period for Real Property: For property placed in service beginning January 2018, the definition of qualified property (i.e. property eligible

repealed but can be carried forward indefinitely.

• Like-kind Exchanges (Section 1031): Likekind exchange rules are limited to apply only to real property that is not primarily held for sale.

• Fringe Benefit Deduction Adjustments: For tax years beginning 2018, fringe benefits rules disallow deductions for entertainment expenses, and the employee transportation fringe benefit.

Employee meals are now only 50 percent deductible.

INDIVIDUAL TAX PROVISIONS • Personal Exemption Deduction Eliminated: For tax years 2018 – 2025, the deduction for personal exemptions is eliminated.

Prior to this elimination, the deduction for each personal exemption was $4,150 with a phase out for high earners.

• Mortgage and Home Equity Interest Deduction Limited: For Tax years 2018 – 2025, the deduction for interest on home equity is eliminated and the mortgage interest is limited to loans of up to $750,000 ($375,000 for married filing separately taxpayers).

• Medical Expense Deduction Threshold Temporarily Reduced: For tax years 2017 – 2018, the medical expense deductions threshold is reduced from 10 percent of AGI to 7.5 percent of AGI. Additionally, AMT limitations on deductions of medical expenses does not apply to these tax years.

at which the credit phases out are increased to $400,000 for married filing jointly taxpayers ($200,000 for all other taxpayers) • 529 Accounts Funds Tax-Free Withdrawals Expansion: You can now pay for private elementary and secondary school expenses (private or public) using 529 accounts. Tax-free treatment of these withdrawals will be limited to $10,000 per student per year.

• Exclusion on Sale of Primary Residence Retained: A taxpayer who sells their primary residence may exclude up to $500,000 of gain if filing as married filing jointly ($250,000 if single), provided the taxpayer has owned and used the home as primary residence for two of the previous five years.

The Tax Cuts and Jobs Act passed by Congress has stoked optimism for what tax reform can do for business. Many believe business owners with smaller tax bills will turn around and invest more in their businesses and in the overall economy. Cresanti, of the IFA, says the tax changes will “supercharge the economy,” and prompt franchise owners to “hire more employees, expand operations, open more locations and give more back to their communities.”

That has always proved to be a successful business strategy for Dunkin’ Donuts, so we will have to see how it plays out.

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INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 11

FEATURE

By Debbie Swanson

STRENGTH IN THE MIDDLE

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ying to stand out among the competition is nothing new to a quick service restaurant. But recently, some have cast a questioning eyebrow at Dunkin’s middle-price point position in the increasingly crowded coffee marketplace. After last fall’s re-launch of McDonald’s McCafe coffee, analyst Jeremy Scott of Mizuho wrote: "We view Dunkin's straddle between value-orientation and upmarket beverages as increasingly challenging in a marketplace where the spectrum of price points for both drip and espresso-based products continues to widen.”

With McDonalds re-igniting its efforts to attract the lower-priced coffee customer, and Starbucks continuing to lure the trend-conscious crowd, observers feel Dunkin’ Donuts’ challenge isn’t to mimic or chase either end of the spectrum, but to continue efforts to impress its own target customer.

THE MCDONALD’S UPRISING McDonald’s first introduced coffee in 2001 in the U.S. with then-president Alan Feldman declaring it “gives customers another reason to visit McDonald's.” The chain’s McCafe concept, launched eight years earlier in Australia and established in 17 countries before its U.S. premiere in Chicago, features lattes, cappuccino, fruit smoothies, teas and even scones, served on real plates with stainless steel flatware.

Despite its low price point, McCafe was not a huge hit for the Golden Arches.

One Chicago franchisee who owns 18 restaurants told Crain’s Business in 2016, the concept “does too well to just get rid of it, but it doesn't do well enough to be very excited about it,” Bloomberg Business painted a skeptical outlook for McCafe and its inability to sway the Starbuck’s crowd, despite its lower price point. “I don’t think they’re going to be attracting the Starbucks customer to go there — I really don’t,” Peter Saleh, an analyst at Telsey Advisory Group, wrote in the Bloomberg article.

But last fall, McDonald’s re-launched

“ The way Dunkin' Donuts is positioned forces us to differentiate ourselves by providing unexpected, exceptional customer service, while delivering good coffee at a fair price” McCafe, introducing three new coffeehouse style beverages at the comfortable price of $2: Caramel Macchiato, Cappuccino, and Americano. The chain also announced plans to widen their retail offerings with ready-to-drink beverages in 2018, a channel Dunkin' entered in 2016.

Chris Kempczinski, president of McDonald's USA, said in a press release accompanying the re-launch: "We understand how important the coffee culture is for consumers and we are committed to meeting that demand at the taste, convenience and value only McDonald's can offer.”

“No doubt there is a cross competition between McDonald’s and Dunkin',” according to John Gordon, principal at Pacific Management Consulting Group and DDIFO’s restaurant analyst. “The [$2 blended beverage] is a good discount, and it could be worrisome.”

ON THE OTHER END: STARBUCKS Dunkin’ had a firm foothold as a place for fresh, hot, coffee when Starbucks disrupted the coffee scene and changed the culture surrounding coffee. Starbucks made buying a cup of coffee (venti Macchiato anyone?) an event, and rejuvenated interest in the beverage among college students and young adults, something which has benefited the entire industry.

As coffee sales grew over the last 15 years, Dunkin’ Donuts and Starbucks solidified their customer base. The trend-driven Starbucks consumer is a contrast to the value-conscious Dunkin' guest. Owneroperated Starbucks developed a larger post-noon following, while franchiseeowned Dunkin' Donuts maintained its heavy morning attention. Perhaps the biggest differentiator is the atmosphere:

with larger dining rooms, free internet access and homey décor, Starbucks has created an environment where guests can linger. At Dunkin’, speed of service and smaller footprint is designed to keep patrons moving and on schedule.

“Dunkin' is leaning more toward the in-and-out, with smaller stores, and quick service; they’re not chasing Starbucks,” observes Gordon. “Starbucks may indirectly compete, but both brands have declared they’re not much of a threat to each other. “

BEVERAGE-LED STRATEGY With the launch of its 2006 “America Runs on Dunkin’” campaign, Dunkin’ shone the spotlight more brightly onto coffeebased beverages, specifically targeting the on-the-go crowd. With its on-the-go ordering app and recently streamlined menu, Dunkin’ is pushing its beverage-led strategy.

That move has created a significant difference between Dunkin’ and McDonald’s, which uses coffee beverages as a low priced leader for its food. Dunkin' does the opposite; low priced food, without discounted beverages. “The dream,” says Gordon, “is to trade a drip coffee customer to a more expensive coffee based drink.”

Gordon is among those watching Dunkin’s menu reboot.

“It’s unnoticeable by customers, but is intended to make things run smoothly behind the lines, and improve consistency from store to store.” It also helps eliminate the consumer stress that can accompany too many food choices, he says.

Confidence in the brand’s ability to meet

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 13

COFFEE COMPETITION the needs of their target customer is one reason California Dunkin’ franchise owner Matt Cobo doesn’t feel threatened.

“I don’t want to compete with McDonald’s on price, [nor] with Starbucks on the perception of a great experience,” he says.

Instead, he puts his energy into satisfying his daily guests: coffee drinkers seeking quick service, a quality product, and a reasonable price.

“The way Dunkin' Donuts is positioned forces us to differentiate ourselves by providing unexpected, exceptional customer service, while delivering good coffee at a fair price." And, according to Cobo, "If we execute like we are supposed to as a brand – fast, accurate service, quality coffee, all with a smile – we can [remain competitive].”

BRAND LEVEL STRATEGIES Dunkin’ Brands has successfully used technology and innovation to remain competitive and meet the needs of its busy, caffeine-fueled guests. The popular DD Perks rewards program and on-the-go ordering have resonated with customers.

Curbside pickup, which enables customers to wait in a designated parking spot for staff to bring out their order, is also showing promise as a tool to retain customers, according to Gordon. He says it’s particularly promising for locations without a drive-thru, but can be challenging for franchisees who don’t own their real estate.

“Curbside relies on negotiating with a landlord to get a designated parking spot,” Gordon says, adding that this would come at cost. “It can’t happen on a massive scale unless the real estate supports it.”

Cobo, whose location just began a softlaunch of the service, is enthusiastic about curbside becoming a factor in his sales.

Cobo's customers beat the national average for using on-the-go ordering.

“It’s one more way to provide a great

“ It’s unnoticeable by customers, but is intended to make things run smoothly behind the lines, and improve consistency from store to store.” customer experience,” he says. “For example, for parents with small children; it can be difficult to get the kids unbuckled, and in and out.”

Delivery is being tested as another way to get coffee out to the busy customer. It’s a concept many QSRs are exploring in partnership with delivery services. Gordon believes it’s a good concept, provided fees don’t diminish its appeal. “In Boston, they’re using delivery services DoorDash and Favor, which take 30 percent, a large commission.” According to the Boston Globe, Favor also charges a $6 delivery fee, which is roughly three times the cost of the coffee.

FRANCHISEE FOCUS Many industry experts believe Dunkin’s laser focus on beverages will keep the brand connected to its core customer— the coffee lover who appreciates a midprice point and no-nonsense approach.

Dunkin’s experiment with new signage, removing the word “Donuts” and focusing

14 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

the brand on “Dunkin’,” furthers the brand’s commitment to being a beverageled brand and a coffee leader and highlights the “America runs on Dunkin’” campaign. It’s a concept many franchise owners applaud.

“It’s too soon to tell, but anything that drives the beverage-focused mission statement can be good,” says Cobo, the California franchisee.

And, while McDonald’s reimagines its McCafe concept and Starbucks introduces hot food to accompany its soy lattes, Dunkin’ is keeping its focus on beverages and customer service, led by its franchisees.

“We can’t look to the franchisor to completely solve this with brand strategy, marketing, or operations. The franchisee knows what matters to the customer; that’s on us,” Cobo says. “We [need to] meet the expectations and demands of the customer in such a way that it propels them to come back to us.”

•

Why Big Investors are Bullish on Dunkin’ Stock

WHY BIG INVESTORS ARE BULLISH ON DUNKIN’ STOCK

By Matt Ellis

O

n October 31, 2017, as Dunkin’ Donuts franchise owners were gathered at Foxwoods for the DDIFO National Conference, rumors of a marriage between Dunkin’ and Krispy Kreme spread across the business press and social media.

Experts offered their opinions on CNBC, Bloomberg and Nation’s Restaurant News. Among those discussing a possible purchase by the private restaurant company JAB Holdings – which bought Krispy Kreme in 2016 – was Jeremy Scott, senior research analyst at Mizuho Securities. He wrote, “While this isn't the first time a deal has been speculated between the two companies, the market reaction appeared to imply more credibility this time around. JAB has been an aggressive acquirer over the past three years, paying substantial premiums for coffee and bakery brands in both retail and restaurants.”

News Gazette says indicates “institutions are feeling bullish about the stock.”

Overall, more than 90 percent of DNKN is held by institutional investors.

One large investor, who spoke with Independent Joe on condition of anonymity and takes a long-term view of Dunkin’ Brands, believes the latest move up in the stock is not related to speculation of being acquired. Instead, he says, it’s almost certainly related to the recent tax reform bill.

"Dunkin' currently pays a full 38 percent tax rate, but under the new law the tax

rate will be in the 24-to-27 percent range,” this investor says. "Mathematically this means Dunkin's earnings per share will increase by around 20 percent. Dunkin' shares have to increase by that amount just to hold their current P/E multiple."

The investor also points out that Dunkin’ additionally benefits from the parts of tax reform that help its franchisees, "There are two ancillary benefits to tax reform.

First, many of Dunkin's franchisees are structured as pass through entities and will see tax relief, and thus increased cash

In fact, Michael Halen, senior restaurant analyst at Bloomberg Intelligence, calls JAB “the most logical acquirer” of Dunkin’ Brands, but doesn’t believe a sale is imminent. Two weeks after the Oct. 31 rumor, DNKN stock hit its 52-week high ($59.45); early in January it climbed above $66.00. Many institutional investors have increased their holdings, a move the Stock

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 15

COVER STORY

SUB HEADLINE

DUNKIN’ STOCK flows as well. This helps support future remodels and continued new unit builds.

Second, 100 percent Capex deductibility over the next five years is timed perfectly for Dunkin's push to have franchisees remodel the restaurants."

Still, the investor did reiterate that eventually Dunkin’ Brands same store sales figures will need to show renewed growth in order for the stock to continue to appreciate. “There is some controversy over the value of Dunkin’ stock because of the same store sales numbers,” this investor says. “[We] believe a current slowdown in sales is temporary. We think the best time to buy a long-term business is when it is down.” He points out that Starbucks same store sales have decelerated of late as well, suggesting Dunkin's slowdown may not be company specific.

There are, however, a significant number of hedge funds taking the opposite view.

Six percent of DNKN stock is now held in short position, a number experts say is high. For comparison, 2.1 percent of Starbucks is held short. Restaurant Brands,

owner of Burger King and Tim Hortons, has 3.5 percent held short and less than 1 percent of McDonald’s is held short.

As Halen points out, investors and analysts typically compare Dunkin’s numbers with other franchised QSRs, like Wendy’s McDonald’s, Dominos and Starbucks, though the company that most resembles Dunkin’, Tim Hortons, can no longer be used to compare multiples since it is no longer a standalone company like Dunkin’. There are other coffee retail brands Halen would love to have available for comparison. But, companies like Peet’s Coffee, Caribou Coffee, and Stumptown Coffee have all been swept up by the privately-held JAB Holdings, which bought Panera Bread last spring.

During the Wall Street panel convened at the DDIFO National Conference at Foxwoods, Halen and First Manhattan Company’s Michael Kelter were asked if Dunkin’ Donuts would be a standalone company in five years; they put the odds at around 50-50. As Kelter pointed out, “A larger company can do a better job with IT

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16 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

and marketing.”

Restaurant Brands is well positioned for a purchase. With sales up slightly at Tim Hortons, the company may be looking for an opportunity to expand its international coffee reach with Dunkin’ flying its flag.

YUM Brands, owner of KFC, Pizza Hut and Taco Bell, has also been mentioned as a possible Dunkin’ buyer. That scenario may not be the most beneficial for Dunkin’ franchisees, according to Halen. “[Franchisees] would have to compete for capital with the other brands and senior management tends to invest in the strongest brands,” which he says could leave Dunkin’ fighting for corporate investment with the strong Taco Bell brand and an improving KFC. Dunkin’s stock strength may itself be the factor preventing a takeover; it is trading at 16.3 times next year’s Ebitda. By comparison, JAB Holdings paid 16-to-17 times for Peet’s, Krispy Kreme and Panera.

A stock value of over $65 dollars per share would likely lead to a buyer’s ask price of

Yum Brands

JAB Holdings Brands

$80 or $85. That may just be too steep for a buyer that is looking to pay only $70 per share. Industry watchers believe that is why the JAB Holdings rumor never materialized—and why investors are interested in taking a long view of DNKN. Dunkin’ Brands’ recent moves to simplify its menu, invest in technology and focus on beverage sales show the company is serious about keeping its stock moving higher.

Halen calls Dunkin’ Donuts a “powerhouse brand” with a market capitalization over $5.5 billion, sizeable sales and a large number of shops. He believes once the dust around tax reform settles and analysts can get a clearer view of a restaurant company’s true value, there will be more mergers and acquisitions. And, Dunkin’ Donuts will still be in the crosshairs.

•

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 17

FRANCHISE PROFILE

By Cathy Cassata

FROM BAKER TO BOSS Ed Wolak’s Successful 5-Decade Journey E

d Wolak was a teen when his mom applied for a job at a Dunkin’ Donuts in Manchester, New Hampshire.

"It was a new business to us. No one knew it was a chain," says Wolak.

His mom worked part-time at the location for a few years, and encouraged her daughter to apply.

"My sister then got me a job as a porter. By then, my mom had left, but my sister and I worked together shortly before she moved on to other things," Wolak recalls.

As the last Wolak standing, he stuck it out to pay his way through college. While he was working as a porter, the afternoon baker began showing him how to make hand-cut donuts. Soon, he began to assist the weekend night baker as a fryer.

"One day, the manager got a call from the night baker who called in sick. The afternoon baker who taught me told the manager, 'Eddie can do it.' The manager was surprised, but gave me a shot. After that, I had a job as a night baker," recalls Wolak.

From 1968 to 1974 he baked donuts at that store, and also became the go-to on-call baker in the area.

"I had a rolling pin and a piece of canvas in my trunk.

Any of the franchise owners within a radius of 100 miles would call me, and I'd come in if I were available," he remembers. "That was the time donuts were handcut. It took practice and manual dexterity to be able to make them efficiently."

Still, at the time, Wolak planned to stay in the Dunkin' business only until he earned his bachelor’s degree in business management. Graduation from Southern New Hampshire University would come in 1974, and then he

18 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

"We create pathways to success for people who are willing to seize the opportunity we have to offer" planned to leave Dunkin' behind.

"I was actually allergic to the dusting flour we used at the time. The only way I could get through my shift was to use a bronchial mist product to unclog my throat," Wolak says.

Upon graduation, as he was planning to apply for other jobs, Al Goldberg, a Dunkin' franchisee in Nashua, N.H., made him an offer he couldn’t refuse: he said he’d make Wolak a manager at one of his shops.

"I guess I did a good job because within six months he made me general manager for all three of his stores," he says.

Wolak used everything he had learned working in various Dunkin' shops, plus what he learned in college to make himself successful.

"When I started managing, I worked the schedules and the payroll and break-even points. The profitability of the first store went up."

So did the second and the third. Soon, Wolak was ready to purchase his own store.

previous year they lost $30,000 and my first year I made $35,000.”

Wolak hit a speed bump with the purchase of his second store, an existing Dunkin’ location in Westbrook, Maine, a suburb of Portland. At the same time, the City of Portland wanted the land on which Wolak’s first Dunkin’ sat to build a public park. He lost the site – and the store – to eminent domain. He was able to reach an equitable sale price with the city, and with the settlement money, he purchased a piece of land which included an existing Dunkin’ shop in Berlin, NH, at the edge of the White Mountains.

Then, he returned to North Portland, and developed his first Dunkin' from the ground up.

Decades later, having developed 14 Dunkin’s in northern New England, the Wolak Group expanded into upstate New York. Today, the company and its affiliates own and operate 96 Dunkin' Donuts restaurants with four more in the pipeline, as well as a 21,000-square foot central production facility in Syracuse, NY, which produces and delivers donuts and baked goods to many of his Dunkin’ shops.

"I put my Porsche up for collateral, borrowed a few thousand dollars from a finance company and was in business on a shoe string," says Wolak.

"A growing franchise owner needs to understand that you don't manage five Dunkin's like you managed one or 20 like you managed 10, and you certainly don't manage 100 like you managed 20," says Wolak. "It's forever-challenging. One of the first things I learned in my business management classes is to get work done through other people. If you don't have the ability to delegate or hire well and trust them until they prove that they can't do the job otherwise, you're never going to be able to grow a large network."

To keep expenses low, he worked as a baker on the day and night shifts, and hired his brother Bob to trade off weekend shifts. "I turned that store around. The

As his business has expanded, Wolak has taken steps to help his employees, many of whom, he says want to grow with the company.

A network is born After six months of managing three stores, Wolak purchased his first Dunkin' in 1975 in Portland, Maine, staking an unusual piece of personal property for his business loan.

"I have many employees who have been with me from the beginning. One started as a porter before I bought my first store, and he's still with me. He became a baker, manager and general manager.”

For the benefit of others Syracuse University sits just south of old US Route 5 in this upstate New York city.

Just a few miles to the east, along Route 5, which goes by the name Erie Boulevard, sits a former Krispy Kreme shop. It’s notable because this is where Wolak chose to build his company’s Career Development Center, a 2,000-square foot facility that also houses one of Wolak’s Dunkin’ shops.

"We built it this way so employees could get real world experience while getting trained," says Wolak, who believes it is the only career development center of its kind in the Dunkin’ system.

It is a place where his more than 2,100 employees can seek mentorship and gain knowledge to keep them competitive in today’s workforce. It also serves, Wolak says, to educate the public about opportunities that exist generally within the quick service industry and specifically within the Wolak Group.

"The quick service restaurant industry has created lots of opportunities for individuals, but generally it gets a bad rap," Wolak says. "Yet there are numerous examples of people who start in entrylevel jobs and with mentoring and hard work they earn their way to top management,” including Wolak’s own director of sales, who started working the counter, then became a baker before being promoted to overseeing 45 locations in New York.

"We create pathways to success for people who are willing to seize the opportunity we have to offer," he says proudly.

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 19

One of those pathways involves a free college education. When new employees are hired, Wolak gives them a flow chart explaining the job duties and positions within the company and a promise that after one year or 1000 hours of service, they can qualify for a promotion as a shift manager. Those positions include 100 percent reimbursement for enrollment into Southern New Hampshire University’s online degree program.

Wolak has never forgotten what he learned at his alma mater and is eager to give back so others can get ahead. He has established an endowment that generates scholarships for undergraduates, he serves on the university’s board of trustees and was recently honored when they placed his family name on its Library Learning Commons building. That was especially poignant because Wolak’s mother attended the ceremony in 2016, just a few months before she died.

“I'm a firm believer that education has made the difference in my life, and I want to pay it forward,” Wolak says. "You have to recruit people to work for you. There are a lot who can't afford to go to college; who

are jumping from job to job, and if they land with us, we try to be something for them that they can grasp onto," he says.

Family, Charity, Hobbies and More Kimberly Wolak is Ed’s only child and someone with whom he can share his company and philosophy. Kimberly grew up in the business, but sought other opportunities after college. She spent some time working in the film industry in Los Angeles, then the wine business in Napa Valley.

"I originally discouraged her from working for me out of college because it was a tough business then," says Wolak. "'When she moved back home it seemed like the perfect timing, though. She worked alongside me for about five years. Then she was promoted.”

The father and daughter duo share similar ideas about their business, as well as community outreach. They have established partnerships with local and national charitable organizations such as the Junior Diabetes Research Foundation, the Make-AWish Foundation, the Maine State Society

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Additionally, they support efforts to reduce their carbon footprint, reduce and re-channel their waste stream. The effort has turned the Wolak Group into a "green" and sustainable business.

Through his former son-in-law, Wolak also got a taste of Hollywood. He was asked to serve as executive producer of a film called "Sugar Mountain," a thriller set in Alaska and directed by the Australian director Richard Gray.

"This was definitely outside of my comfort zone, but a lot of fun to do,” he says of the film, which premiered at the Cannes Film Festival in May, 2017 and was sold to Screen Media Ventures for release in North America, the UK and Australia.

Having tasted the high-pressure world of Hollywood, Wolak is happy to relax on the island off the coast of Maine where he and his wife own a home. "We all need an escape from work," says Wolak. "The place feels so far away, but it is actually fairly close; from Portland it's a ferry trip away."

His other great distraction is his classic car collection.

"I wanted a hobby that I could enjoy in my spare time that wouldn’t take much time," says Wolak. "When I was a teen, I was at an auto junk yard and saw an old car whose front end had a pointed nose. It was a 1951 Studebaker. Years later when I saw that car at a car show, I bought it." In fact, the latest addition to Wolak’s collection is a 1963 Studebaker Hawk GT, which was specifically built by the factory for the actor Alan Young, who starred in the

1960s television show “Mr. Ed.” He also owns a 1991 Rolls-Royce and a 1965 Volkswagen Karman Ghia convertible.

Then there’s the Porsche Wolak bought to replace the one he used as collateral for his first Dunkin’ shop and wound up selling because he couldn’t afford to keep it up.

"That was a 1975 Porsche 914. Years later, I bought a 1973 that looks just like it," says Wolak. "It was hard to give that car up when I was starting out, but it was all worth it."

•

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 21

A LOOK ON THE LAW

BY RONALD K. GARDNER

FORECASTING 2018 A

s I sit here, just a few days before Christmas, I am watching the weather change outside my office window from relatively warm (for Minnesota), to downright cold. And like the weather, the one thing that we can always count on as the seasons change, is change in the political and legal landscape affecting business and franchising.

To begin with, franchisees should quickly get with their tax advisors to determine how they might restructure their income flow as a result of the tax reform bill that was signed into law at the end of 2017.

There are both opportunities and challenges with this new tax structure and franchisees who do not take the time to

understand these changes – and respond appropriately – may find themselves in a significantly worse position than those who take advantage of the new law.

Maximizing the benefit of those changes, however, may require some restructuring, or at least, a realignment of the cash flow coming out of your business.

Additionally, in the fine print, folks need to find out how the new deductions and exemptions protocol might affect capital expenditures in their business, remodel obligations, or other events that have customarily had an effect on your taxable income and bases. Again, only a good visit with a knowledgeable and qualified financial advisor will be able to answer these questions for you.

Politically, at the national level, the push is going to continue to get legislation to relieve franchisees of the fear of a finding of being a joint employer along with their franchisors. On December 14, 2017, the NLRB reversed the Browning-Ferris standard that caused the concern to arise in the first place, meaning that the urgency to get legislation will probably die down significantly. However, it is my expectation that entities that have gotten a lot of political mileage out of making hay on this issue will continue to do so, and while I do not expect their efforts to go down, I do expect that the appetite in Congress to do something will greatly diminish.

Whether Congress gets involved or not, I think franchisees should expect a continuing expansion of the push for increase in minimum wage at the state and local level. For folks in the QSR sector, this is challenging news to say the least. The combination of a difficult labor market, combined with significant upward pressure on low-end wages, will put a real squeeze on franchisees’ profit margins and will take some careful planning to work around. Many systems are addressing these challenges not just with political activity, but also with an increased reliance on technology. I

22 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

would expect to see that trend greatly accelerate as the minimum wage push spreads further and further across the United States.

On a macroeconomic level, all indications seem to suggest that while many markets are becoming saturated by particularized brands, the press by franchisors for new unit growth continues to be relentless. This is particularly true in systems where either the companies are public (as is the case with Dunkin’ Brands), or controlled by a private equity group. While franchisees may be able to take advantage of the franchisor’s offer to allow them to expand, they should be very careful about where that expansion takes place, as the headwinds of an economy with higher interest rates and potential inflation seems to be eminent.

Finally, in the franchise sector specifically, the North American Securities Administrators Association issued new guidelines to the states that are effective this year related to franchisor’s Item 19 (financial performance representations), in their Franchise Disclosure Documents. Franchisors will have to be much more robust in the information they provide to franchisees with respect to the performance of corporate and franchisee locations, representations they make with respect to subgroups of less than all franchise locations, and the way they present averages in the material. Franchisee advocates, such as myself, believe this is a tremendous step forward in helping franchisees who are facing renewal or expansion, or prospective franchisees, in getting a more realistic and transparent handle on the economics of the systems that they are considering.

As Ben Franklin said, the only thing that is certain is death and taxes. As for the rest of us, everything else can change: politics, law and the weather. Are you ready?

•

Ronald K. Gardner is the managing partner of Dady & Gardner, P.A.

Directory of Business Members ACCOUNTING

Persona Signs, Lighting, Image

BUSINESS MEMBER

Adrian A. Gaspar & Company, LLP, CPAs

Joe Duhaime 617-504-0059 • Joe.r.duhaime@sprint.com 3 Van de Graaff Dr, Burlington, MA 01903 www.sprint.com

Poyant Signs

Verizon

Employers Unity LLC

Jackie Linhares 508-207-1273 • jlinhares@poyantsigns.com 125 Samuel Barnet Blvd, New Bedford, MA 02745 www.poyantsigns.com

Shawn Anderson 585-202-6901 • sanderson@employersunity.com PO Box 173836, Denver, CO 80217 www.employersunity.com

Marcovich, Mansour & Capobianco, LLC

Joseph A. Mansour, Jr. 401-334-9099 • jmansour@mm-cpas.net 640 George Washington Hwy. Bldg C Suites 200-201, Lincoln, RI 02865

MFA - Moody, Famiglietti & Andronico, LLP

David Fisher 978-569-2944 • dfisher@mfa-cpa.com 1 Highwood Dr., Tewksbury, MA 01876 www.mfa-cpa.com

Neovision Consulting Inc.

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

Sansiveri, Kimball & Co., LLP

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

BACK OFFICE Jera Concepts

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

BUILDING Duro-Last Roofing

Samantha Pickelman (989) 758-1048 • spickelm@duro-last.com 525 Morley Dr., Saginaw, Mi 48601 www.duro-last.com

Restroom Remodels Company

Keith Vanderbilt 617-500-2554 • keith@restroomremodels.com 15 Hammatt St, Ipswich, MA 01938 www.restroomremodels.com

2 018

Sprint

Susan Koelzer 800-843-9888 x390 • skoelzer@personasigns.com 700 21st Street SW, Watertown, SD 57201 www.personasigns.com

Robert Costello 617-621-0500 • cpas@gasparco.com 6 Kimball Lane, Ste. 150, Lynnfield, MA 01940 www.gasparco.com

DDIFO

Dustin Ray 207-317-1406 • Dustin.Ray@vzw.com 352 Center St, Auburn, ME 04210 www.verizon.com

COST RECOVERY EF Cost Recovery

Trane Commercial Systems

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

Watchfire Signs

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

Jonathan Ralys 978-737-3814 • Jonathan.Ralys@Trane.com 181 Ballardvale St, Wilmington, Ma 01887 www.trane.com David Watson 205-542-7881 • David.Watson@watchfiresigns.com 1015 Maple St, Danville, IL www.watchfiresigns.com

BUSINESS BROKER National Franchise Sales

Ellen Hui 949-428-0498 • eh@Nationalfranchisesales.com 1601 Dove Street, Ste. 150, Newport Beach CA 92660 www.nationalfranchisesales.com

COMMUNICATIONS

Performance Business Solutions, LLC

ENERGY Secure Energy

Jodi Maurer 413-733-2571 x218 • jmaurer@sesenergy.org 12-14 Somers Rd., East Longmeadow, MA 01028 www.sesenergy.org

FINANCE Bank of America/Merrill Lynch

Charter Business

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

Granite Telecommunications

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

Bernadette Vidal 212-5980-1707 • Bernadette.Vidal@charter.com 477 Congress St. Portland, ME 04102 www.charter.com Daryl Chelo 401-334-3176 • dchelo@granitenet.com 1 Albion Rd., Lincoln, RI 02865 www.granitenet.com

Bank RI

Thank You to Our Business Members!

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 23

DDIFO

BUSINESS MEMBER 2 018

Directory Business Members Directory ofof Business Members

Beirne Wealth Consulting Services, LLC

Signature Financial

Jeff Bradanini 203-951-5917 • jbradanini@beirnewealth.com 3 Enterprise Drive, Ste. 410, Shelton, CT 06484 http://beirnewealth.com

Trey Grimm 410-419-7107 • tgrimm@signatureny.com 502 Club Ln., Towson, MD 21286 www.signatureny.com

Bridge Funding Group, Inc.

Sterling National Bank

HigherMe

Shannon Cassidy 617-890-6476 • shannon@higherme.com 77 Franklin St, Suite 510, Boston, MA 02110 www.higherme.com

HIRETech

Rick Riecker 800-928-8537 • Franchise@BankUnited.com 215 Schilling Circle, Suite 100, Hunt Valley, MD 21031 www.bridgefundinggroupinc.com

Lindy Baldwin 402-312-2542 • lbaldwin@snb.com 500 7th Ave., 3rd Floor, New York, NY 10018 www.snb.com

Malak Mansour 281-558-7100 • mmansour@hiretech.com 200 Westlake Park Blvd., Suite 501, Houston, TX 77079 www.hiretech.com

Eastern Bank

TCF Franchise Finance

Paychex

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

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

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

Fidelity Bank

TD Bank

TalentReef

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

Joyal Capital Management Franchise Development

Peter J. DiFilippo 401-525-6771 • Peter.DiFilippo@td.com 180 Westminster St, Providence, RI 02903 www.tdbank.com

United Bank

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

Mark McGwin 508-793-8342 • mmcgwin@bankatunited.com One Mercantile St, 7th Flr, Ste. 760, Worcester, MA 01608 www.bankatunited.com

LCR Franchise Finance

Wintrust Franchise Finance

Robert Obolewicz 203-644-8481 • robolewicz@lcrcapital.com 315 Post Road West, Suite 200, Westport, CT 06880 www.lcrfinance.com

Sandra McCraren 847-432-2488 • smccraren@wintrust.com 9700 W. Higgins Road, 1st Flr, Rosemont, IL 60018 franchise.wintrust.com

Northern Bank & Trust Company

Kelley Munsell 781-569-1584 • kmunsell@nbtc.com 275 Mishawum Road, Woburn, MA 01801 www.nbtc.com

Pacific Premier Franchise Capital

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

Pinncale Commercial Capital

Mylan Dawson 317-472-2828 • dawson@pincomcap.com 101 W. Ohio St, Suite 2000, Indianapolis, IN 46204 www.pincomcap.com

HUMAN RESOURCES CertiPay

Danielle Post 813-300-6953 • dpost@certipay.com 130 Bates Ave. SW, Ste. 101, Winter Haven, FL 33880 www.certipay.com

Employers Reference Source

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

Abby Sandbach 720-399-2494 • asandbach@talentreef.com 210 University Ste. 300, Denver, CO 80206 www.talentreef.com

INSURANCE Intrepid Direct Insurance

Bill Strout 913-217-4252 • bstrout@intrepidinsurance.com 10851 Mastin Blvd, Ste. 200, Overland Park, KS 66210 www.intrepidinsurance.com

Regions Insurance

Dennis McClelland 770-274-2914 • dennis.mcclelland@regions.com 12725 Morris Rd. Ext. Bldg. 100 Ste. 200 Alpharetta, GA 30007 www.regionsinsurance.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

LEGAL Constangy, Brooks, Smith & Prophete, LLP

Jeffery Rosin 617-849-7882 • jrosin@constangy.com 535 Boylston St, Ste. 902, Boston, MA 02116 www.constangy.com

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24 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

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Lisa & Sousa Attorneys at Law Ltd.

Carl Lisa, Sr. 401-274-0600 • clisa@lisasousa.com 5 Benefit St, 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

DTT

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

Ecolab

Michael Quate 215-287-6953 • michael.quate@ecolab.com 8300 Capital Dr, Greensboro, NC 27409 www.ecolab.com/Businesses

HME Drive-Thru Headsets

R.F. Technologies, Inc.

Michael Murdock 847-495-7350 • michaelm@rftechno.com 330 Lexington Dr, 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/

SKAL East, Inc

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

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

Carl Huerth 781-806-3139 • carl@skaleast.com 131 Padelford St., Berkley MA 02779 www.skaleast.com/index.cfm?keyword=dunkin

OPERATIONS

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

Jarrett Services ATM, Inc.

Squadle

3M Company

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

Brink's Inc.

Shawn O'Sullivan 617-653-8462 • shawn.osullivan@brinksinc.com 46 Sprague St., Boston, MA 02136 www.brinks.com

Kronos

Shawn Dearden 978-408-0282 • shawn.dearden@Kronos.com 900 Chelmsford St, Lowell MA 01851 www.kronos.com

MCD Innovations — Airxcel, Inc.

Bunn-O-Matic Corporation

Christina Trammell 972-548-1850 • christina@mcdinnovations.com 3303 N. McDonald St. McKinney, TX 75071 www.mcdshades.com

Cardtronics

Jim Muldoon 978-273-1847 • jim.muldoon21@gmail.com 6 Argyle St, Andover, MA 01810 www.nanosafetysolutions.com

Carrier Corp

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

Todd Rouse 800-637-8606 • Todd.Rouse@bunn.com 1400 Stevenson Dr., Springfield, IL 62703 www.bunn.com Tom Spooner 973-452-4131 • tspooner@Cardtronics.com 628 Route 10 - Ste. 8, Whippany, NJ 07981 www.cardtronics.com 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

Nano Safety Solutions

New England Drive-Thru Communications

Torrco Everpure

Chris Williams 651-503-4763 • christopherJ.Williams@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

Brendan Bencharit 818-590-4483 • brendan@squadle.com One Broadway, Floor 14, Cambridge, MA 02142 www.squadle.com

Staples Advantage

Joe Shea 781-806-3139 • joseph.shea@staples.com 31 Commercial St. Sharon, MA 02067 www.staplesadvantage.com

Tellermate

Kyle Anthony 770-220-5113 • kyle.anthony@tellermate-us.com 3600 Mansell Road, Ste 500, Alpharetta, GA 30022 www.tellermate-us.com

Wind River Environmental

Samantha Kelley 978-344-0926 • skelley@wrenvironmental.com 46 Lizotte Dr., Ste. 1000, Marlborough, MA 01752 www.wrenvironmental.com

TAX DEFERRED EXCHANGE Exchange Authority

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Thank You to Our Business Members!

INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018 25

COMMUNITY CORNER

BY STEFANIE CLOUTIER

The Community is Her Business W

hen people come into Pat Barnett’s Dunkin’ Donuts shops, they are likely to see something they don’t see in other coffee shops or quick service restaurants. Barnett hires people some might consider unemployable, people with disabilities that may overshadow their abilities.

“I hire them so they can feel good about themselves,” she says. “I want to give them abilities they can use other places.”

Barnett’s Dunkin’ shops, which she’s had since 2003, are located in Daytona Beach and New Smyrna Beach, Florida. Six of her eight stores employ people from the Conklin Center. It’s an organization in Daytona that helps people with visual impairments and additional disabilities like productive lives. Conklin hadn’t been able to find jobs for their clients and asked Barnett to consider hiring them.

For this group, being able to work at a job 25 hours a week is the first step to living independently.

So Barnett created the Dunkanista program. She gives these new hires special aprons and has them work in the dining room where they clean tables, refill napkin holders, and sweep floors. They can do this, she explains, by counting the steps from the door to behind the counter and to other spaces in the stores.

Talking about some of her Dunkanistas,

Barnett describes one woman, who lost her sight as a teen and can only see shapes this way: “She has a bubbly personality; most people can’t even tell that she’s blind,” but, she says, “No one will hire her.”

Another woman, who is totally blind, is self-conscious and won’t speak to guests.

Barnett makes sure her regulars know her and look out for her so she can feel comfortable.

walking away feeling better for interacting with her.”

“These people are unique in their abilities, in what they need and can do. Most other fast food places don’t hire them because they don’t want the liability. But there’s a tremendous benefit for us as well as them,” Barnett says. When the Dunkanistas are keeping the dining area staffed, the counter staff can operate more efficiently. And their hours aren’t counted against her stores’ labor hours, giving her more hiring flexibility.

In addition to hiring community members, Barnett also works with a local Girl Scout troop, giving them space at her Edgewater store to plant vegetables and flowers. The vegetables go to the local food pantry and the flowers to nursing homes.

Buoyed by the success of this program, Barnett recently signed up with an independent group that has people with Downs Syndrome. One woman now works in the store she frequents with her mother.

It’s her first job ever; Barnett says the young woman cried when she heard she had been hired.

“She’s very social,” says Barnett. “She’ll say, ‘Hi, Mrs. B., I’m here, I’m having fun. You see that man? He lives up the street from me, he came in to see me this morning.’

If you’re having a bad day, you can’t help

26 INDEPENDENT JOE • DECEMBER 2017/JANUARY 2018

Barnett grew up in Florida, one of nine children. “Growing up, I didn’t know I was poor,” she says. “I realized in middle school we didn’t have as much as others.

Now I try to do as much as I can for those less fortunate, while making them feel like it’s their own accomplishment.”

And for the past seven or eight years, her crew has donated the pennies from their tips year-round to donate to Toys for Tots.

At the end of the year, they tally it up and give it to the local police department, who say it’s provided a lot of toys for a lot of kids.

“We probably get a couple thousand dollars from that,” says Barnett. “The crew gets to see that, to see the impact their pennies can make.”

But her signature program, the one she’s proudest of, is her Dunkanistas.

“I wish I could see more of them out in the community,” she says. “They’re so enlightening to be around.”

•

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