Dunkin Donuts Remodeling: demolition and reconstruction in two days, minimizing lost revenue

Independent_Joe_20_Dunkin_Donuts_IMAG0135_fmtBecause Goldman’s remodel did not require ripping up the existing floors, the crew was able to turn around the bulk of the demolition and reconstruction in two days, minimizing lost revenue.

When I first entered the system in 2010, I was thankful my shop was not scheduled for a remodel anytime soon. The thought of hanging a “Closed” sign for weeks, losing revenue while spending hundreds of thousands of dollars—on top of learning how to run a Dunkin’ shop—was stressful, indeed. My experience as an IT Project Manager taught me the key to any successful project was planning early. Plan for contingencies and delays, and plan for success. I figured the same principles should apply to a Dunkin’ remodel. Still, I was glad I had some time to learn the business before learning how to manage a remodel.

When I purchased an existing store in late 2012, I knew it was slated for a remodel in the summer of 2013. So, on the day we passed papers, I began the planning for the project. The first order of business was to create a project plan—basically a list of all of the tasks, from start to finish, that were needed to complete the remodel and get Dunkin’ Brands’ blessing. For my list, I used MS Project (you could also use an Excel program), because I wanted this to be a fluid and living document. I knew I would be adding and moving tasks based upon delays and interdependencies.

I reached out to my Dunkin’ construction manager who provided me with the overall scope of work for the project, including all of Dunkin’s requirements for sign off. At the same time, I sat down with my Dunkin’ OM, my own general manager and some of my employees to see what could be improved in the current layout of the store. It was clear we needed a specific area for food pick-up. What’s more we had a bottleneck behind the counter where the sandwich station was situated too close to the shop’s only coffee station. Employees and customers were crowded and there was a lack of flow.

Identifying this information was critical in the discussions I had with the architect and contractor. We needed to not only meet Dunkin’s requirements to improve the flow in the store; we also needed to keep costs down. And, I wanted to ensure this redesign would seamlessly allow for future enhancements like wiring for a digital menu board (DMB). What’s more I wanted to use robust materials like stainless corner beads to reduce upkeep costs over the next 10 years.

Once the drawings were complete and signed off, my contractor and I could update the project plan to identify the items for which I was responsible, the detailed tasks he would perform and the milestones he would need to reach to get paid on time.

Dunkin Donuts Remodeling: demolition and reconstruction in two days, minimizing lost revenue

Independent_Joe_20_Dunkin_Donuts_IMAG0135_fmtBecause Goldman’s remodel did not require ripping up the existing floors, the crew was able to turn around the bulk of the demolition and reconstruction in two days, minimizing lost revenue.

This is a critical step that requires a franchisee’s attention. Consider the process of installing new ovens. Your utility company needs to upgrade the gas meter, but, in order to get the meter, you need new permit—and that can take four weeks. Whose responsibility is that? Some municipalities issue permits on the spot; some don’t. You need to know ahead of time. I know two franchisees whose remodels were held up over 6 months due to delays in obtaining permits. They missed their contractual remodel date and got dinged on their rating.

My list of tasks was small compared to my contractor’s. I needed to spec and order equipment, Coke coolers, DMBs, music, TV, speakers, booths, chairs, and a water filter system, among other things. Some of these items were in stock; others required two-month lead times.

We determined which items would be shipped to the store and which would go to my contractor’s warehouse to accommodate my space constraints. The key is to have all of the materials and equipment delivered before the work begins; missing one small item could create a snowball effect and delay the project. Once we knew how long it would take to order and receive delivery of these items—plus the cost estimates from the contractor—we were able to finalize the project plan.

Fast forward ten weeks, all of the permits were obtained, all of the equipment was on site, and the various trades were scheduled. We chose a Sunday afternoon in February as the day we would close and promptly at 4 pm, 20 members of my contractor’s crew were on-site to begin the demolition. While the existing floors were grandfathered, we still needed to go back to the studs. Within two hours the place was bare and the new construction began.

There is an old adage, “An army marches on its stomach,” which means people who are working need to be fed. Knowing that not too many places are open late on a Sunday in the suburbs, we pre-scheduled to have dinner delivered so the crew could work through the evening. Having been fed, and with a clear plan for what needed to be done on this first night, the crew was able to build a new soffit, put new millwork in place, wire and plumb the shop before leaving at 2:00 Monday morning.

One of the most critical items on our plan was learning what the town health and building departments required before a retail food business like ours could reopen. We learned that as long as the place was clean, met health codes and there were no safety hazards, we could open for business before everything was complete. That meant installation of new LED lights, wall paper, chair rails, and even refitting the bathrooms could wait until after we reopened.

At 7:00 Monday morning—just five hours after they had left—the crew was back on site. The demolition and reconstruction continued for the next 18 hours, at which time the contractor informed me we were ready to clean the store, reinstall equipment, stock and put seating and tables back. We were right on schedule. My plumber and electrician were on site early Tuesday morning, along with my crew.

For the next three hours, plumbing and equipment were tested; the shop was cleaned from top to bottom; the front counter and sandwich station was stocked; and donuts and baked goods were stocked in their new Lakeside cases. Having met the Red Book requirements, we opened the doors and welcomed in our morning customers. It had been a mere 37 hours since we closed.

Over the course of the next few weeks we closed one bathroom for reconstruction and left the other open. We hung wallpaper, painted, installed lighting, hung the DMB and completed the final punch list. Dunkin’ gave us final approval on the remodel four months prior to our contractual remodel date. We finished the project less than 0.5% over my budget estimate.

Admittedly, this shop is located in a strip center without a drive-thru. We kept the existing flooring and didn’t face the same challenges that owners of free-standing shops with drive-thrus face. But, because we began our planning months before we closed the doors and because we had a detailed project plan with key dates, interdependencies, responsibilities and contingencies identified, we never felt like we were behind the 8-ball.

Remodels are stressful, no matter how you do it. But if you do your homework, plan for contingencies and hire outstanding professionals, you can minimize the anxiety and get back to the business of serving your customers.

Adam Goldman is a DD franchise owner with a successful multi-store network in Northern New Jersey. Contact him at njddonuts@gmail.com.

Depending on where you are in your renovation/remodel cycle, now might be the time to remodel. Read more about that has been introduced bill to make permanent a 15-year tax depreciation schedule.