Dunkin’ presses franchisees to accept surveillance

Holly Sanders and Josh Kosman write in the NY Post that Dunkin’ Donuts, under fire for unleashing a barrage of lawsuits against franchisees, is pushing a controversial surveillance system that store owners fear will be used to target them.

The chain is pressuring franchisees to install a system that it says will curb employee theft and boost profitability. The system links security cameras, including live feeds and hours of footage stored on digital video recorders, to cash register activity to spot suspicious transactions.

While owners can log into the system remotely through the Internet and keep tabs on their employees, Dunkin’ also can access the system through which it can monitor franchisees.
The company has told franchisees that it won’t use the system to monitor them unless there is a “major incident” that would affect the brand, such as a robbery or shooting.

However, Dunkin’ is notifying store owners — those it deems “substandard” — that they are required to install the system, and that they must either allow Dunkin’ to monitor them through it or pay to have their stores inspected.

According to one Dunkin’ letter, the franchisee was required either to allow Dunkin’ to monitor the stores “24 hours a day, 7 days a week” or pay to have each store inspected every other week at a cost of $350 a visit.

The June letter contradicts assurances Dunkin’ gave to franchisees in April shortly after the company began promoting the system, which is supplied by outside vendor March Networks.

When asked whether Dunkin’ would have access to the system, John Dawson, Dunkin’s chief development officer, wrote in an e-mail to franchisees: “No, Dunkin’ Brands will not be watching your stores through the March Networks system.

“We may, however, require video footage in the event of a major incident that affects the brand as a whole (robbery, shooting, etc.).”

In an interview, Dunkin’ spokeswoman Karen Raskopf acknowledged that Dunkin’ has sent similar letters to 45 franchisees — comprising about 200 stores — that the company claims have failed to meet corporate standards because of problems such as equipment repair or cleanliness.

“Video cameras are optional at Dunkin’ Donuts,” she said. “We only insist on a video system for franchisees — a small number — that failed to meet basic standards.”

Those franchisees that are being required to install the cameras — the company says fewer than 4 percent — are being put through a year-old program that Dunkin’ said is intended to improve lower-performing stores.

“We want to keep them in the system,” Raskopf said. “We want them to succeed. We have a good relationship with the vast majority of our franchisees.”

Although Dunkin’ said the March Networks system isn’t mandatory, it is offering powerful financial incentives, such as keeping lower royalty fees, to owners that install it.

One franchise owner in New York agreed to install the cameras after Dunkin’ offered to keep his royalty rate at 4.9 percent under the old agreement, rather than raising it to 5.9 percent.

“I feel like I have to do it,” the franchisee said, adding that he doesn’t mind the cameras but thinks the price of the system, which ranges from $6,600 to $12,300, is “high.”

NY Post