Dunkin’ Donuts Struggles to Expand

by lisa ~ July 23, 2009

July 23, 2009 - Despite a heavily promoted branding campaign and even a new iPhone application, Dunkin’ Donuts is struggling to expand its franchise outside its Northeastern home base. Financing troubles amongst franchisees are only adding to the chain’s difficulties. The latest indignity is losing 13 store locations in New York City to Canadian chain Tim Hortons.

In January, Dunkin’ Donuts launched a $100+ million integrated advertising campaign using the tagline “You Kin’ Do It!”. Then, in June, the coffee and baked goods retailer released “Dunkin’ Run,” an interactive website and iPhone app to enable group orders.

Today’s New York Post points out that the chain has suffered four franchisee bankruptcies - and the closure of 101 stores - since June 4. And one major franchisee that had planned to bring the brand to Texas is only going to open four stores instead of 70 due to trouble obtaining financing from the nearly bankrupt CIT.

The chain’s struggle to expand is most obvious in Manhattan, where franchisee Riese Organization was essentially forced to close 13 of its Dunkin’ Donuts stores after the Post published a photo of a mouse munching on a doughnut in a Riese-owned location in 1998. Midtown Lunch, a well-respected food blog, describes the full-blown rivalry between existing Dunkin’ stores and the new Tim Hortons. To find out more about Tim Hortons’ Manhattan incursion, check out this New York Times article.

It would be easy for the Dunkin’ Donuts corporate entity, based in Canton, MA, to be distracted by all this bad news. I’ve certainly been distracted by it! Let’s hope all of us can stay focused on its branding campaign.

To read the New York Post article “Dunkin’s Brouhaha: Donut Shop Franchisees Frying Over Lost Dough,” click here.

Lisa Tibbitts is a corporate communications professional with an MBA in marketing. Follow her on Twitter: http://twitter.com/FinancialPR.

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