The Brand’s reorganized Profitability Subcommittee is off to a good start according to Brand Advisory Council (BAC) co-chair Jim Allen and to DDIFO members we talked to.
During 2008 franchise contract negotiations, President and Chief Brand Officer of Dunkin’ Donuts Worldwide Will Kussell and the franchisee leadership agreed to reorganize the long-standing Profitability Subcommittee and give it new powers to endorse all new initiatives before they are presented to the BAC. According to its charter, the Profitability Subcommittee’s objective is to “provide leadership, oversight and counsel on products, programs and brand initiatives with the overriding premise to protect and enhance franchisee profitability.”
“It’s time we became focused, especially in light of the current economic conditions,” says Allen. “The times demand we work together and right now the Brand and the franchisees are both focused on economics and profitability.”
In a statement provided to us by Dunkin’ Donuts, Kussell echoes Allen’s sentiments. “Now, more than ever in this challenging economy, Dunkin’ Donuts and its franchisees must have a laser-like focus on profitability. The Profitability Subcommittee is working closely with our franchisees and supply chain partners to both identify and maximize efficiencies within the system to determine how we can minimize costs, increase store traffic and further grow sales. Supporting our franchisees’ long-term success and profitability is our top priority.”
The Profitability Subcommittee is one of only two standing committees established by the BAC whose charters are written into that committee’s by-laws; the other is the Marketing Steering Committee. Members are appointed by the subcommittee’s co-chairs. There are 13 total members made up of six corporate employees, six franchisees and one national DCP executive. The subcommittee meets at least six times annually.
“The subcommittee has been doing excellent work on behalf of the franchisees and is delivering on what Will Kussell promised us during contract negotiations,” says Rob Branca, a DDIFO member who was part of the franchisee team that helped draft the charter for the subcommittee “I hope that the follow-through that Kussell has demonstrated is reflected throughout the Brand.”
Because the subcommittee will evaluate the viability and suitability of new products, programs and initiatives to ensure a minimum margin and ROI, the belief is that franchisees won’t be forced to invest in costly programs that have not been tested.
“We want to make decisions based on profitability and not just growth of the top line because if the bottom line doesn’t grow proportionally, then it’s not a recipe for success,” says Ken Blum, a subcommittee member who helped draft the profitability form that the subcommittee is using to evaluate potential initiatives. “The template is modeled after something the Brand had been using but has been modified to help us analyze costs with greater consistency. It’s still a work in progress,” says Blum.
Going forward, all new product plans, store concepts and equipment purchases will be vetted through the Profitability Subcommittee. Its formation not only represents a more open dialogue than has previously existed, it also better aligns the needs of franchisees with the goals of the Brand.