Using March Networks, Dunkin Donuts franchisees are alerted to suspicious transactions without wasting time

Using March Networks, Dunkin' Donuts franchisees are alerted to suspicious transactions without wasting time

This interesting and telling case study was posted at, no author was listed but it appears to have been written by March Networks.

Historically, Dunkin’ Brands franchisees were on their own when it came to acquiring, installing and managing loss prevention solutions, resulting in a hodgepodge of systems, many of which were analogue CCTV machines that produced grainy images and were both time-consuming and difficult to use.

A handful of technically-inclined franchisees were leading the way in the adoption of digital video, but most had little or no loss prevention experience, limited knowledge of the technology market, and lacked the time to sit for hours looking for video evidence.

Seeing an opportunity to boost the profits of its franchisees and increase royalties, Dunkin’ Brands’ leadership council challenged its Loss Prevention and IT departments in 2006 to come up with a solution.

A thorough, methodical review of technology offerings by Dunkin’ Brands concluded in 2007 with a comprehensive loss prevention plan that equips its franchisees with one of the most technologically advanced LP solutions in the QSR category. Originally, the focus was on finding the best digital video surveillance system. However, as the review progressed, it became clear that video was only half of the solution.

When video surveillance systems are new, franchisees usually take the time to review video and search for incidents of employee theft. However, they are soon distracted by all of their other day-to-day operational responsibilities and the systems sit idle. As small business owners with a lot on their plate and lacking loss prevention staff of their own, most of them are usually unable to fully leverage the potential of their video surveillance technology. Loss Prevention and IT staff concluded that a better, more advanced system would be an improvement, but still wouldn’t guarantee active, continuous use of the systems by franchisees pressed for time.

Dunkin’ Brands staff came upon the ideal solution as they learned more about the power of integrating video and point-of-sale data, and using exception reporting software to zero in on suspicious transactions. A third-party data investigation service offered by the successful vendor, March Networks®, was the icing on the donut.

The March Networks data investigation team is able to query Dunkin’ Brands POS database in search of suspicious transactions remotely access the corresponding video for confirmation and report incidents of employee fraud to franchisees.

The end-to-end solution includes March Networks 4000 C Series Networked Video Recorders and Extreme LP, an exception reporting application that accommodates standard and custom queries as well as powerful linking and filtering functionality to identify patterns, trends and anomalies indicative of suspicious cashier behaviour.

Dunkin’ Brands Loss Prevention and IT staff worked with franchisees to evaluate vendor offerings and select a recommended solution, but the decision to acquire a system and participate in the program is entirely up to each individual store owner.

The LP department has traditionally focused on royalty fraud, and even now has limited its role in store security to the search for a video surveillance and data mining solution. Based at the company’s head office in Canton, Massachusetts, Dunkin’ Brands Loss Prevention department has no access to store video or data investigation reports.

Re-imagined a few years ago, the department began hiring seasoned financial fraud investigators, mostly former federal agents from the FBI, the IRS and the U.S. Secret Service. Retired agents with 20 to 30 years of experience, they offer Dunkin’ Brands a level of professionalism and financial fraud expertise that makes the department unique in the retail loss prevention sector.


The search for a video surveillance solution began in 2006 with an exhaustive review of vendor offerings. A detailed vision and scoping document was drawn up identifying the company’s requirements, and approximately 12 vendors were invited to demonstrate their capabilities. IT staff not only evaluated the technology that vendors brought to the table, but also questioned them about their product roadmap, their market position and where they saw themselves going.

Video compression and bandwidth usage were high on the list of issues of concern to the IT department.

“We run a private network here, so if we’re going to start streaming 16 cameras per store for close to 6,000 stores, that’s a lot of network overhead,” said Todd Michaud, Dunkin’ Brands’ Director of Retail Technology Solutions. “How a system manages video, where it keeps it and the frames per second were all important to us.

“Some systems are designed to regularly transfer video to a centralised Web server,” noted Michaud. “What we wanted was a system that only moves the video when you need to move it, so we don’t take up bandwidth unnecessarily.”

IT staff concluded that MPEG-4 video compression and March Networks’ Adaptive Compression technology provided efficient storage and bandwidth use without compromising video quality. Armed with the ability to throttle a section of the bandwidth to meet the needs of the video recording systems, IT staff are satisfied that video won’t jeopardise gift card or credit card data traffic on the Dunkin’ Brands secure network, called the NTIC.

Vendor capability to handle a national rollout was another important issue for IT. With 5,769 Dunkin Donut stores in the U.S., the logistics associated with installation, training and support stood out as a major challenge. Only a handful of vendors were up to the task.

“We also looked at hardware reliability because these video recording systems make heavy use of disk drives,” said Michaud. “We wanted to make sure we wouldn’t have a lot of hardware issues and that there was a system in place to quickly address any issues that came up.”

Dunkin’ Brands’ Loss Prevention and IT staff worked together to evaluate and select the best solution Dunkin’ Brands’ Loss Prevention and IT departments worked well together throughout the process, but Michaud is aware that friction and misunderstandings between the two departments are not uncommon.

Fresh from a recent loss prevention user group conference where he was one of only two IT professionals in attendance, Michaud heard more than a few complaints from LP executives.

“One of the things I heard from loss prevention people I met was: ‘I asked my IT person for such and such a report and they weren’t able to give it to me for PCI (Payment Card Industry) compliance reasons,’ or some other reason. My suggestion to LP people is to explain what you’re trying to accomplish, so we can work together on a solution, instead of saying ‘I need this or that report.’

“They were getting stonewalled just because of the way they asked the question,” said Michaud. “I felt a bit like a marriage counsellor.”


The vendors left standing after an exhaustive review were invited to supply and install trial and evaluation systems in some 20 stores. This gave franchisees an opportunity to test the systems and provide feedback. The final decision was made by an IT sub-committee, or technical advisory council, comprised of franchisees and Dunkin’ Brands corporate staff.

Cutting-edge technology, ease of use, price and the ability to handle a national deployment were among the key factors that contributed to the decision. March Networks’ relationship with Wachter, a systems integrator with national reach, took care of the logistics challenge. Based in Lenexa, Kansas, Wachter has worked on several other national rollouts for March Networks customers and has trained technicians across the U.S. to become Dunkin’ certified. They are up to speed, not only on March Networks technology, but also on the stores’ camera layouts and network infrastructure.

Dunkin’ Donuts’ 2,219 international stores – in South America, Europe, Asia and the Middle East -may participate in the loss prevention program at some point in the future if more complex technical and logistics challenges can be sorted out. Dunkin’ Brands’ 5,800 Baskin-Robbins stores may also be brought into the fold at some point, provided a return on investment can be demonstrated.

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