Dunkin’ Donuts readies store growth in region
August 26, 2012
The entry of Dunkin’ Donuts into Northern Nevada marks the next step in a steady westward expansion by the company headquartered at Canton, Mass.
Dunkin’ Donuts said last week it’s recruiting a franchisee who will develop eight to 10 locations in Northern Nevada. The stores probably will begin opening in 2014.
“We’re going to want local operators, local expertise,” said Grant Benson, vice president of franchising and development. “They will teach us about Reno.”
The company will look throughout Northern Nevada – from Verdi to Elko – for potential franchise locations.
But its preferred demographics for franchised locations almost certainly will bring its attention mostly to Reno, Sparks and Carson City.
The company looks for locations with 15,000 residents within a three-minute drive time and 25,000 residents within a five-minute drive.
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Seven of the counties in Northern Nevada don’t have 25,000 residents total, let alone 25,000 within a five-minute drive.
Benson said the company is flexible in the sorts of locations in which its stores are located. Typical options include:
• Free-standing locations with drive-through facilities, sometimes converted from previous food-service uses.
• End-cap locations with drive-through capabilities in a strip center.
• In-line shop space.
• Inside convenience stores.
In addition, the company’s franchisees sometimes develop non-traditional locations – airports, casinos, college campuses – as a second wave after the initial locations are established.
The minimum financial requirements for a franchise owner who wants to develop a single store include liquid assets of $250,000 and net worth of $500,000. Typically, they also have experience in food-service management and an understanding of real estate development as well. (Detailed information is at dunkinfranchising.com.)
The cost of developing a store varies by location, the company says.
As part of its aggressive growth strategy, Dunkin’ Donuts is offering incentives – reduced royalty payments for three years, $10,000 in additional marketing dollars for local stores – to franchise owners in new markets such as Reno.
The company is looking to double its footprint of 7,000 stores in the United States during the next 20 years, and Benson says its entry into the Reno market follows a successful rollout in other Western markets, including Las Vegas, Phoenix and Denver.
“We’re working on a continuous wave of development across the country,” Benson says.
As the Dunkin’ Donuts wave rolls westward, so does its support system. Dunkin’ Donuts will open a distribution center in Phoenix this year to support its stores in the West. (The distribution system is owned by the franchisees, not the parent company.)