Dunkin’ Gets Some Southern Exposure

August 28, 2006 by Mark | 0 Comments

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Boston:

Joe Rando spent nearly two years planning for this day: opening a Dunkin’ Donuts here so he could get a good cup of coffee, the kind he remembers drinking during his days as a student at Tufts University.

But five hours into the grand opening on Wednesday, with a line snaking out the door, the region’s lone franchisee ran out of doughnuts. All 650 dozen of them. That’s a rate of 26 doughnuts a minute.

“We thought we had enough,” said Rando, 40, who had to give out hundreds of coupons for free doughnuts. “It’s pretty crazy.”

Dunkin’s expansion in the Nashville market, with as many as 100 new locations planned over the next few years, is part of the Canton chain’s strategy to triple its stores nationwide to 15,000 by 2020 . Dunkin’ is the country’s top doughnut chain. But under new owners, including two of Boston’s biggest private equity firms, the company is moving fast to capture the lucrative coffee market and broaden its concept to include hot dogs and pizza in new cities. Last year, nearly 70 percent of its 543 new US stores were built outside the Northeast.

The success — and saturation — in New England has prompted local franchisees to open stores in new markets, including Tampa and Charlotte, N.C. But they’re learning the hard way about the challenges of expanding in areas where Dunkin’ isn’t on every block. In places like Tampa, customers are buying dozens of doughnuts but not ordering as many of the more profitable beverages. A Coffee Coolatta? Never heard of it.

In Franchising in USA and/or Canada, News

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