A New Year is upon us and this is a good time to reflect over the last twelve months and take a look at our expectations for 2010.
Over the past year, I have had the opportunity to meet a great many franchise owners from different parts of the country. I want to thank you for the opportunity to learn about you, your business and listen to your concerns.
I also want to recognize all the new members who joined DDIFO in 2009. Thank you for your confidence and support. Expanding DDIFO membership is critical to our mission of supporting the interests of Dunkin’ Donuts franchise owners.
Clearly, 2009 was a difficult year on many levels for Dunkin’ Donuts franchise owners. 2009 was also a year of great change at Dunkin’ Brands. New leadership is now running the Dunkin’ and Baskin operations and a new Dunkin’ Donuts Brand Operating Officer, Paul Twohig, begins in his new role on January 15th. Many DDIFO members have expressed optimism at these changes. I share your hopes that these changes are positive and beneficial to the Dunkin’ Donuts franchise owner community.
As we enter 2010, many of you are still expressing significant concerns about the future in large part because of the status of your Franchise Agreements. Franchise owners repeatedly have mentioned to me that over the last 10 years the franchise agreement has become extremely one-sided and does not sufficiently address franchise owners’ rights–particularly those regarding franchise term as it pertains to building, perpetuating and harvesting franchise owner equity.
Besides the franchise agreement here are some other frequent concerns franchise owners have expressed:
1. Channel Development: This is of concern to all franchise owners that are investing significant dollars in development and remodeling. Franchise owners are concerned that Dunkin’ Donuts coffee is being dispensed to consumers in offices and food service establishments at standards and prices far below those that are practiced in the shops.
2. Operating Standards: There is much support in the franchise owner community for compliance to high operational standards, there is significant concern that those standards are not uniform and are arbitrarily enforced.
3. Ad Fund: Franchise owners desire full transparency and documentation on how these funds are allocated and spent.
4. Territories: Development agreements (SDA) should include some protection from non-traditional outlets (NTO). It should be the rarest exception that an NTO is allowed within an SDA. The franchise owner that invested in the SDA should be treated as a partner and all parties should collaborate to find a suitable solution to the development opportunity.
5. Technology: franchise owners are tired of Dunkin’ Brands mandated single source technology solutions and intrusion. Many have expressed their frustration with the costs and operational deficiencies associated with Radiant, Next Step, NTIC, and March Networks.
DDIFO is committed to its role as a “watchdog” over the relationship between Dunkin’ Brands and its franchise owners. In the coming year we will pay special attention to the items listed above as well as to others that will emerge. One of the ways we will address these issues is by providing members with access to relevant information from multiple sources so you can remain up-to-date on the latest developments.
In 2009, DDIFO took advantage of its financial stability to engage outside entities to investigate and research key areas of interest for franchise owners, including:
• We commissioned the American Association of Franchisees and Dealers (AAFD) to grade the Dunkin’ Brands franchise agreement to AAFD’s Fair Franchising Standards.
• We engaged the New England Center for Investigative Reporting (NECIR) to investigate the impact Dunkin’ Brands legal tactics have had on individual franchise owners.
• We also commissioned FranData to benchmark Dunkin Brands Franchise Disclosure Documents (FDD) to the major food service franchise brands on key areas of required disclosure.
• We engaged the Government Relations Group to help us gain a voice and garner influence to have a positive effect on legislative measures critical to business and franchise owners.
• DDIFO established a Franchise Owners Equity Fund, where significant funds have been set aside for use by the Board of Directors in areas where the Board feels they are needed to protect and enhance franchise owner equity.
The results of these efforts has yielded tremendous information and resources that the DDIFO Board of Directors is using to identify the right strategies for the organization as we move forward. This information and resources will help to significantly influence the dynamics of the relationship between Dunkin’ Brands and its franchise owners.
The DDIFO communications team produces the quarterly magazine Independent Joe; the monthly newsletter DDIFO Insider with content specially written by DDIFO journalists about issues of interest and concern to DDIFO Members. All of this content-and more-is available on the enhanced ddifo.org Web site. A few weeks ago, we instituted a security protocol on the Web site which will limit the content that non-DDIFO members have access to. We believe this is another step towards proving the value of a membership in our organization.
In 2009, DDIFO changed the form and function of its regular members meetings. Attendees now have access not only to updated DDIFO business, but also to interesting and informative outside speakers and specialist such as attorney Robert Zarco, Speaker of the Massachusetts House Robert De Leo, and food industry lobbyist Rick Berman. We opened the meetings to specific sponsors so that franchise owners can learn more about the products and services that can help maximize efficiency and profits. Our 2010 meeting calendar is now taking shape and will prove equally valuable to all attendees.
DDIFO communications and DDIFO members meetings are supported by sponsor and advertising fees. This is an important development in our structure because sponsor revenue provides us with greater flexibility for how we utilize the fees our members pay.
As we reflect over the last year I think you would agree we have made great progress. Our ultimate goal for the future is to improve franchisor/franchisee relations through a process of inclusion and openness so that that the promise of today is fulfilled tomorrow.
Please don’t hesitate to contact me with comments, suggestions or questions you have related to the issues listed above or any other issue that concern you.
DD Independent Franchise Owners, Inc.