Here are the top 10 stories of 2009 at DDIFO.org, including a link to the story and a summary that gives a shortened version of each of the top 10 in 2009.
This list considers both interest (clicks) and importance to DDIFO and its members!
The most important stories of 2009:
1. Dunkin’ Chief Legal Counsel Steve Horn Is Out DDIFO had been reserching and investigating the practices of the Dunkin’ Brands Loss Prevention department over the last few years. DDIFO had taken a number of steps to investigate and change the tactics of Dunkin Brands Loss Prevention, including but not limited to: DDIFO contracted the American Association of Franchisees and Dealers (AAFD) to grade the Franchise Agreement that Stve Horn had tweaked over the years making it one of the egregious contracts in all of franchising, DDIFO contracted FranData to benchmark litigation in the top 20 Food Service Franchises to compare Dunkin Brands, DDIFO contracted the New England Center for Investigative Reporting to interview franchise owners that were subjected to the tactics of Steve Horn’s Loss Prevention department and DDIFO contacted franchisee attorneys across the country seeking their experience and sharing the experiences of others. At the end of September 2009, Dunkin’ Brands CEO Nigel Travis changed the direction of the Loss Prevention department most importantly he had the department report to finance as opposed to Steve Horn, the general counsel. That led to Steve Horn leaving the company and signified to the entire franchise community a change had occured in the strategic direction of Dunkin’ Brands. See also: Dunkin’ Donuts’ Loss Prevention Department Wants You! Now What? see also: DDIFO in 2009 and Beyond
2. DDIFO Eyes National Expansion with Addition of Chicago Board Member DDIFO celebrated its 20th anniversary in 2009, that whole time DDIFO had primarily been a New England and Upstate NY based franchisee association. I took over as President on December 1, 2008 and identified that DDIFO needed to be a national organization to effectively reach its mission of enhancing and protecting the business interest of its members. The Mid West Dunkin’ Donuts Franchisee Association (MWDDFA) had been opoerating in Chicago for a number of years, the first step was to bridge those two organizations and combine them to increase the strength of the franchise owners collective voice. See also: South Asian Dunkin’ Franchisees Unite with DDIFO and DDIFO and Midwest Franchise Owners Explore Ways to Join Forces
3. Franchisees Raise Questions about Compliance Team Implementation Dunkin’ Brands created the Compliance Team in 2008 and began , moving through each region within the system, the intent of Dunkin’ Brands was: “devoting additional resources to focus on closing the gap between day-to-day performance and Dunkin’ Donuts standards.” DDIFO began receiving calls from a number of franchisees who have received the Compliance Letter. DDIFO started to investigate and interview franchisees, many Dunkin Donuts’ franchisees expressed concerns over the tone of the document and the implementation of subsequent action plans. The issue was not whether the Brand has the right to zero in on a shop that is not in compliance with established standards; they do and they should. The concern was what was the motive, was it just standards or was there another goal. The fact that the Compliance team reported to the development department was always a concern to DDIFO and to franchise owners. See also: New Name, New Approach to Franchisee Compliance and a more recent article:
4. Mediation Creates Winners on Both Sides Mediation has become such a widely accepted alternative to litigation that it is credited with helping to drive a trend away from jury trials. In fact, the American Bar Association set up a “Vanishing Trials Project” because contract cases, among others, are so unlikely to wind up being decided at trial. As cases settled through mediation increased, the rate of civil jury trials decreased by two thirds from 1976 to 2002 in federal and state courts, according to the National Center for State Courts. Between 2000 and 2002, Dunkin’ brands filed 350 lawsuits against franchisees compared to 12 similar suits filed by the far larger McDonald’s in the same span, according to Nation’s Restaurant News and the Boston Business Journal. Dunkin’ Brands filed 157 lawsuits against franchisees between January 2006 and June 2007 compared to 5 by Subway, according to those publications. And in 2008, Dunkin’ Donuts filed 50 new lawsuits, bucking a national trend and its previously stated interest in alternatives. See also: Franchisee Conflicts and Dispute Resolution
5. DDIFO Releases AAFD Grading Report to Members and Takes the Clock Down Over a year ago DDIFO commissioned the American Association of Franchisees and Dealers (AAFD) to review and grade the Dunkin Brands franchise agreement. The AAFD, thru a group of executives, entrepreneurs and attorneys has worked for over 15 years setting standards for franchise agreements to make them more fair and equitable. The ultimate goal is to make franchising work better for all parties by utilizing a spirit of communication and mediation to generate better relations and business results. The AAFD set of standards are referred to as the “Fair Franchising Standards”. In the fall of 2008 DDIFO believed the existing franchise agreement was causing excess friction and litigation between Dunkin Brands and the franchisees. DDIFO believed this situation was caused, in part, by an inequitable franchise agreement and that the litigation had not been good for the Dunkin’ Donuts franchisee community. Personally, I believe the Fair Franchising Standards set a benchmark for a fair and equitable relationship that fosters collaboration and mediation among franchisors and franchisees. See also: AAFD Chair: Why Join Franchisee Associations?
6. Donut in the sky Dunkin’ presses franchisees to accept surveillance. Holly Sanders and Josh Kosman write in the NY Post that Dunkin’ Donuts, under fire for unleashing a barrage of lawsuits against franchisees, is pushing a controversial surveillance system that store owners fear will be used to target them. The chain is pressuring franchisees to install a system that it says will curb employee theft and boost profitability. The system links security cameras, including live feeds and hours of footage stored on digital video recorders, to cash register activity to spot suspicious transactions. While owners can log into the system remotely through the Internet and keep tabs on their employees, Dunkin’ also can access the system through which it can monitor franchisees. See Also: Managing New Technologies: Together “we kin’ do it”
7. Dunkin’ Donuts Coffee Served Here It sounds like a developer’s dream: open a Dunkin’ Donuts franchise near a major commercial building or hospital. Employees, visitors and patients will surely stop in for a cup of coffee on their way in, their way out or during a break. Landing such a development deal would surely be profitable—even in a tough economy. But, as many franchise owners have learned, profits dry up and customer counts drop when the building lands its own deal to sell Dunkin’ Donuts coffee on-site. Talk to any franchise owner in any market and he’ll tell you he is either being affected by one of these channel distribution deals—often called “office coffee”— or fears he soon will be. One franchise owner in Pennsylvania said his weekly sales dropped 40% after a commercial building near his shop established an office coffee program.
8. Starbucks wins California Tip-pooling Case Appeal An appeals court in California sided with Starbucks Corp. and on Tuesday reversed a lower-court ruling that the Seattle coffee giant’s tip-sharing policies violated California labor law. The court agreed with Starbucks that shift supervisors may share in customers’ tips. A class-action lawsuit brought by Jou Chau, a former barista for Starbucks (NASDAQ: SBUX), alleged that the coffee chain’s policy allowing shift supervisors to share in tip money that customers place in jars violated California labor laws. A San Diego lower court sided with Chau in the suit and awarded more than $86 million in damages but on Tuesday, that ruling was overturned. See Also: Rewarding Exceptional Service is Upheld in California and Bill Aims to Clarify Rules on Tip Pooling
9. East Meets West: Different cultures build Dunkin’ Donuts success From DDIFO Magazine Independent Joe Issue 2 August 2009, by Judy Rakowsky. You cannot buy a coolatta or a box of Munchkins on the island of Sao Miguel in the Azores where Manual S. Andrade came from or in Gujarat, in south India where Amrit Patel was born. Neither could you find a Dunkin’ store in Karachi, Pakistan during Siraj Virani’s early years there. But the roots of more than 50 percent of all Dunkin’ Donuts franchise owners in the United States run deep in those homelands and lend Old World sensibilities of hard work, integrity and loyalty to the successful entrepreneurs they have grown to be.
10. Lender CIT Files for Bankruptcy The Boston Business Journal reports that CIT Group Inc. filed for bankruptcy protection Sunday after its board of directors approved of a plan to reorganize the giant small business lender. The plan has also been approved by CIT’s creditors. “The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy,” Chief Executive Jeffrey Peek said in a statement. See Also: Dunkin’ Brands says CIT bankruptcy won’t affect stores and Small business loans: $10 billion evaporates and CIT in Last-Ditch Rescue Bid
