Smack in the middle of the COVID-challenged 2020 NFL season, Inspire Brands sealed the deal to acquire Dunkin’ Brands International for the phenomenal price of $11.3 billion. Congratulations to all the players on these two (soon to be one) teams. A new owner is taking over an established and successful franchised brand. What could possibly go wrong? Presumably nothing and we all fervently hope the deal leads to unqualified success for Inspire Brands, Dunkin’ Brands and, most importantly, the Dunkin’ franchise owners.
As a New England Patriots fan, the timing of the announcement brought me back to another time when a new owner bought another successful franchise – albeit in a much different business. It was the year 2000. Robert Wood “Woody” Johnson of the Johnson & Johnson empire paid a record price of $635 million to buy a New York sports franchise. The team was the New York Jets.
The new owner came in, Hall of Fame head coach Bill Parcells retired to the front office and defensive coordinator Bill Belichick was named as his replacement. The day following that announcement, Belichick resigned as coach of the Jets, citing instability in the organization since the sale of the team to Johnson.
Three-time Pro Bowl player Keyshawn Johnson, who was traded by the Jets when the new owner took over, explained that instability this way: “I wanted to stay in New York as bad as anybody ever. Bill Parcells tried to address the issue. The new people came in and they wanted to go in another direction.”
How did that “new direction” play out? Bill Belichick was hired as the new head coach of the New England Patriots. The team earned an 11-5 record in 2001 on their way to winning Super Bowl XXXVI. Over the 20 years since he left the NY Jets, Belichick’s Patriots have won six Super Bowls. The Jets, still owned by the Johnson family, haven’t come close. The team has a miserable .464 winning percentage and has only made six playoff appearances. As I write this, “Gang Green” has yet to win a game on their current campaign.
Dunkin’ has been a tremendously successful franchise with a winning team at the helm for more than a decade. There is no reason to believe that the new owners will make any changes or “go in another direction” to the detriment of the brand or its greatest asset—its franchisees. But how can we be sure?
Dunkin’ has always been the only restaurant game its owner had been playing at the time. Under Inspire Brands, however, Dunkin’ will be one of several QSR players in the brand locker room. And there will be the requisite implementation risks as Inspire Brands sets the direction for future growth and success. Significant marketing monies have been collected and utilized to build a successful and iconic marketing persona for Dunkin’, especially now as a beverage-led company. Will Dunkin’s marketing strength be focused on continuing its winning ways, or will a different focus and a new identity take hold?
Dunkin’ franchisees are fortunate they have a cooperatively owned national supply chain—something not commonly found in the restaurant space. The brand and its independent operators have been able to capitalize on the wisdom franchisee leaders showed years ago when they established the National DCP. It continues to provide direct and significant economies of scale to the benefit of Dunkin’ owners across the nation. And whatever changes are made that impact those economies is another implementation risk. We don’t know if Inspire sees inherent value in a cooperatively-owned supply chain or whether they would want to implement the model across its other brands. Franchisees will learn a lot about the new owner when those conversations surface.
And, what about the championship-caliber team that Dunkin’ has assembled under CEO Dave Hoffmann? With them may lie the greatest implementation risk of them all. Will they be retained to continue their good work for the Dunkin’ brand, or will some of these great players get cut from the team and be forced to bring their talents elsewhere?
There are many unknowns that come with this change in ownership and, for franchisees, each of them reinforces the importance of having a strong, professional and independent association by their side. It is exactly at times like these that franchisees need to lean on DDIFO to articulate their concerns and represent their interests without fear of retribution. Since its founding in 1989, DDIFO has remained true to this charter:
“Promote the interest of the members of the corporation in connection with their ownership of franchises in the Dunkin’ Donuts Incorporated franchise system, and to take further action incidental thereto including: the development of programs and ideas and a provision of educational and other services designed to further enhance the opportunities available to the members within the system.”
Yes, someone new is in the owners’ suite, and it is possible a new head coach will be roaming the sidelines. But, DDIFO will continue to support the players on the Dunkin’ team, because that is truly the only way to get to the next championship. As Benjamin Franklin said upon the signing of the Declaration of Independence, “We must all hang together or, most assuredly, we shall all hang separately.” I wonder if that would make him a Jets fan or a Dunkin’ franchisee?