Holly Sanders Ware and Josh Kosman report in the NY Post that Dunkin’ Brands is reaching out to angry franchisees they write:
Dunkin’ Brands, accused of squeezing profits out of franchisees by suing them, is trying to make friends before it’s too late.
Chief Executive Nigel Travis has been quietly meeting with angry franchise leaders in recent weeks, after a spate of unflattering reports about the doughnut chain’s litigious ways, sources with direct knowledge of the meetings said.
Travis has told franchisees he is willing to take a fresh look at their contracts and would consider changes that give operators more say over their stores, sources said.
In September, The Post first detailed Dunkin’s unusual legal tactics, which included pushing franchises to pay hefty penalties and fees to settle with the company out of court.
Among the changes franchisees want is a multi-year contract that automatically renews, as opposed to the current contract that simply expires and gives the parent company big time bargaining power.
A Dunkin’ spokeswoman said Travis has been talking to franchisees, but only as a part of regularly scheduled regional advisory council meetings.
A trio of private equity firms — Bain Capital, Thomas H. Lee Partners and Carlyle Group — bought Dunkin’ in a 2006 leveraged buyout. One of the conditions of the financing calls for Dunkin’ to meet targets for opening new stores, which is now proving hard to do considering the parent’s growing litigious reputation.
Several sources, including one close to Dunkin’, said there is also talk franchisees might turn the tables on the company, banding together and filing a lawsuit against Dunkin’ soon if the company doesn’t mend its waysThe outreach follows a management shakeup earlier this month, which included the ouster of longtime chief legal counsel Steve Horn, widely viewed as the architect of the company’s controversial legal strategy”[Travis] did the right thing,” said one source. “He got rid of some people and bought himself some time.
The question is whether he can put in good people and repair the relationshipThe Dunkin’ spokeswoman said Horn made the decision to leave the company. Robert Zarco, a high-profile attorney who has represented Dunkin’ franchisees, created a stir last month at a meeting of the Dunkin’ Donuts Independent Franchise Owners, when he said the company is profiting off franchisees by forcing them to pay hefty legal fees and sell their stores.
Dunkin’ has filed more than 350 lawsuits against its franchisees.
Meanwhile, a source close to the corporate parent said, “They have to expand and make money. The situation is urgent and no one will expand if the system is at war with itself.” firstname.lastname@example.org
Read more: New York Post