Financial Review: We’ve begun working a Dunkin Donuts shop level financial review and John Gordon, founder of Pacific Management Consulting Group, will present detailed findings at our DDIFO National Conference later this year. In the meantime, we will note some observations in Small Regular No Sugar! and other DDIFO publications throughout the coming months.
One of the more amazing factors about Dunkin’ is the variety of store formats currently in place – far broader than many other restaurant franchise brands. The co-branding between Dunkin’ and Baskin in about 1300 shops is one variable but so too is free standing, in line with and without drive thru, oil and gas venues. The sales per door variability runs almost 675%, a seven times difference from high to low, not including so-called “standees”, a counter or cart that may be in operation in some places. With sales variability, so too varies capital spending, the amount of preopening, build out and equipment cash outlays, as well as future year remodeling outlays. As the age and geography of shops varies, consider the differing beverage versus bakery/food sales mix. This makes looking at brand wide averages problematic, whereas a more meaningful metric might be sales to investment ratios or payback, cash flow divided by your cumulative investment back.