This coffee deal leaves a bitter taste in franchisees mouths
Please note: I asked fellow New England Franchise Association member his take on the recently announced coffee distribution arrangement with Dunkin Brands and Proctor & Gamble, here is his reaction:
Mark A. Dubinsky, President of the Dunkin Donuts Independent Franchises Owners, Inc. (DDIFO) stated in an email that the DDIFO is diametrically opposed to Dunkin Brands announced program in its current format to distribute packaged Dunkin coffee in retail outlets. DDIFO firmly believes that this program will harm countless franchisees who enjoy the sales of pounds of coffee in their restaurants today.
Notwithstanding DDIFO’s objections, Dunkin’ Brands has opted to contract with Proctor & Gamble to sell Dunkin’ Donuts coffee in mass distribution channels, bypassing standard (franchisee) outlets in the process. This distribution program was created in the name of “increased brand awareness.”
DDIFO believes if the brand wanted to do better expose Dunkin’ Donuts Coffee in unrepresented or underdeveloped markets, this strategy could make considerable sense. DDIFO also feels to do so in New England, Dunkin’ Donuts oldest and mature market (with franchised restaurants approaching one retail site for every 6,000 in population), to be disingenuous, at best, or shear lunacy, at worst.
The following are comments to this program from three DDIFO members:
“It’s my opinion that Dunkin’ is trying to emulate Starbucks whose coffee is offered for sale in supermarkets,
the big difference being that Starbucks is corporately owned and Dunkin’ is 100% franchisees. It appears as if Dunkin’ wants to operate as a 100% company store (scenario) to the detriment of their franchisees.”
“I am shocked though not surprised that Dunkin’ Brands would consummate this deal with P&G. I understand the need to make consumers aware of the brand but I feel that this move will further damage the relationship between the franchisee / franchisor and erode the profitability in each and every restaurant. Dunkin’ Brands should always remember that the franchisees are the ones that made and continue to make this brand the success that it is.”
“The DDIFO should continue to communicate to its members the happenings of this deal and any changes and/ or updates that may arise. Also, I see no problem with going to the media to put our voice and reaction to the public.”
DDIFO urges Dunkin’ Brands to reconsider and correct this ill-conceived marketing strategy.
Originally Posted at: Blue MauMau
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Comments
This seems to be a pretty hot button topic. I can see why the franchisees would be upset, but I also think it could ultimately benefits them.
Only time will tell, I suppose.
[...] Schultz has a point: Starbucks’ franchised competitor Dunkin’ Donuts had to face outraged franchisees earlier this year when it announced its plans to mass-market Dunkin’ Donuts packaged coffee at thousands of supermarkets and big-box retailers nationwide. While the increased brand exposure may actually help increase sales at franchised shops, franchisees generally see any alternative distribution as additional competition. [...]
[...] Schultz has a point: Starbucks’ franchised competitor Dunkin’ Donuts had to face outraged franchisees earlier this year when it announced its plans to mass-market Dunkin’ Donuts packaged coffee at thousands of supermarkets and big-box retailers nationwide. While the increased brand exposure may actually help increase sales at franchised shops, franchisees generally see any alternative distribution as additional competition. [...]
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