When New Jersey Lieutenant Governor Kim Guadagno walked to the podium at Caesar’s Atlantic City last month, she knew she was facing a friendly room. The men and women – many of whom scurried to find seats as Guadagno’s keynote address began – were all connected to the Dunkin’ system, and they soon learned that Dunkin’ Donuts made the Lieutenant Governor smile. She has an appreciation for Dunkin’ franchisees—as small business owners who create jobs and pay taxes. And, in a state that is still reeling from Hurricane Sandy, she views them as beacons in the storm, business owners who braved the elements to keep the lights on and provide coffee and snacks for first responders. She said thank you because, in her words, “Dunkin’ Donuts saved lives after Sandy.”
Like many politicians, Guadagno knows that a cup of coffee with a constituent, or several as the case may be, can help turn an election. And, as a patron, she knows that a cup of coffee, made to order and delivered quickly and with a smile, can keep the customers coming back for more.
So, it was fitting that Lieutenant Governor Guadagno began her keynote address to the DDIFO National Conference with a simple “thank you.” She conveyed her genuine appreciation for Dunkin’ Donuts as a product and an economic driver for New Jersey. She also expressed her thanks to DDIFO for choosing Atlantic City as the site of the 2013 National Conference.
“It means so much to us that you chose to have your conference here in Atlantic City,” she said.
“Dunkin’ Donuts saved lives after Sandy.”
-New Jersey Lieutenant Governor Kim Guadagno
Changing the venue for the 2013 DDIFO National Conference was just one of the innovations DDIFO Executive Director Ed Shanahan instituted in his first year running the organization.
“We are working hard to be a national organization addressing the concerns of franchisees from across the footprint,” he said in his opening remarks inside the spacious Palladium Ballroom. As a venue, Caesar’s Atlantic City provided DDIFO a world class address centered on the famed Atlantic City Boardwalk. The conference room provided space for close to 75 vendors to set up around the stage and seating areas and adjacent to the buffet.
Relocating the National Conference, said Shanahan, is “the organization’s way of supporting New Jersey and its franchisees” after Sandy. Atlantic City has largely come back to its pre-hurricane levels. The return of Miss America to the Boardwalk created a noticeable buzz and has helped Atlantic City return to the glow of a friendly spotlight.
But, Sandy is still being felt along the Jersey Shore. Some businesses never recovered from the super-storm, others are still struggling. The Boardwalk in neighboring Seaside Heights caught fire a few days before the DDIFO National Conference as a result of electrical wiring damaged by Sandy.
DIDIFO’s gesture was not lost on Arun Mandi, who owns shops in Atlantic City. “I was really delighted. I think it was very thoughtful on DDIFO’s part to think about coming to Atlantic City and to support the communities that were hit hard by Hurricane Sandy. So, I’m really appreciative of the fact that they moved the convention down to Atlantic City.”
Nor was it lost on the Lieutenant Governor, who gave out her personal cell phone number to the attendees, promising to help any franchisee impacted by the storm. In New Jersey there are nine so-called Sandy zones. Any business owner in those zones can receive loans of up to $5 million at 0% interest for the first two years and 1.5% thereafter.
Bert Jimenez, a franchisee with four stores in Bergen County, NJ, had never heard of the loan program about which Guadagno spoke. “We will have to call her,” he said.
A new focus
Since taking over as Executive Director in late 2012, Ed Shanahan has consistently worked to change the strategic focus of DDIFO, making it less-combative and more solution-oriented. “We must take the necessary steps to create an environment that is conducive to the success of all Dunkin’ Donuts franchise owners,” he wrote in this magazine earlier this year.
One step is to identify threats to franchisee profitability coming from government mandates, regulations and taxes. “Like it or not,” said Shanahan, “Government is a silent partner in your business.”
The message resonates with franchisees from every region and with every size network. Issues like paid sick leave, health insurance mandates or even a ban on Styrofoam cups are universal and enable DDIFO to rally members, provide information and, where applicable, government relations support so lawmakers understand how such issues impact small business owners.
“When it comes to health care, we don’t know what it’s going to cost, or how it will impact our employees and what they’ll have to spend,” said Andy Patel, a franchisee from Jacksonville, Florida. “It’s already adding cost to us in our office. At the same time, it’s going to cost us in terms of employees’ pay on top of a two percent increase in our unemployment tax.”
One session, titled, “Keeping Big Brother in Check,” featured C.K. Patel, former chairman of the Asian American Hotel Owners Association (AAHOA). He was joined by lobbyists Joseph Giannino of Massachusetts and Gene Mulroy and Jeanette Hoffman of New Jersey. They discussed state and national initiatives designed to support franchisees, like Fair Franchising legislation and the Universal Franchisee Bill of Rights.
The panel had a clear and consistent message for the franchisees: Get to know your local legislator.
“Many elected officials visit your stores. Know who they are. Introduce yourself. Make them understand that you are the small business owner behind the large corporate brand name on the sign and you feel the brunt of their decisions, not the Brand.” said Giannino.
Franchisees say there is great value in hearing other Dunkin’ Donuts operators discuss the issues that are specific to their region.
“It’s good to know what’s going on in other parts of the country and other development areas and what franchisees are facing,” said Ben Bathija, a franchise owner from Long Island, New York.
This year’s DDIFO National Conference featured a “Conversation with Dunkin’ Franchisee Stars,” featuring Danny Costa from New England; Karim Khoja from Chicago; Arun Mandi from New Jersey; and Mike White from Georgia. Robert Branca, a franchisee with stores in Massachusetts, Ohio and Florida, moderated the discussion.
Each franchisee discussed their history in the Dunkin’ system and the uniqueness of their region.
“Atlantic City has grown so much, it’s like a different state from the rest of New Jersey now,” said Mandi, who got his start working for long-time Connecticut franchisee Jim Cain before opening the first of his shops on the shore and then questioning his choice to develop in a new area. “I opened 12 locations in two years. It took seven years to make any money.”
Mike White, who started his five store network in Atlanta 11 years ago, emphasized how the southeast market is so different from Dunkin’s more mature markets in the Northeast, Mid-Atlantic and Chicago.
“Atlanta is a tough market to develop and we want the Brand to realize that it can be difficult to build the number of stores they want,” he told the group. “I believe DDIFO can help give us a voice in emerging markets.”
“DDIFO brings people together,” said Costa, whose network includes Massachusetts, Maine and Pennsylvania. “It’s important for franchisees to know how they get value from DDIFO at a time like now when we are not fighting with the brand.”
Even as development remains a concern in the Southeast, franchisees at the DDIFO National Conference identified issues like health care, sick leave and minimum wage as among the most pressing. Franchise owners with two shops have many of the same concerns as those with 100 locations: how to protect profitability while paying higher labor costs and absorbing higher costs related to mandates like Styrofoam cup bans.
Each franchisee has to develop strategies and solutions that will work for their business and, they say the opportunity to talk with other Dunkin’ franchisees – from other regions – is, perhaps, the greatest benefit they get from the National Conference.
“To hear from a fellow franchisee who’s already done his homework, can make it much better for all of us,” said Andy Patel from Jacksonville.