The DD Independent Franchise Owners, which represents the largest association of Dunkin’ Donuts franchise owners in the U.S., is concerned that publicity surrounding lawsuits against franchisees is ultimately damaging to the health and reputation of the Brand.
A recent article on the franchise industry news website Blue Mau Mau.org cites internal documents and quotes with attendees to a 2000 American Bar Association at which Dunkin’ Brands’ Chief Legal Counsel in charge of Loss Prevention, Stephen Horn, spoke about the company’s aggressive tactics to conduct surveillance on franchisees suspected of underreporting sales and then litigate them.The article quotes Horn’s speech, “One of the best ways to gather evidence that will potentially have some impact in court is to conduct surveillance of the franchise.” The article goes on to quote Horn saying the best surveillance is not necessarily to generate evidence for court, but to provide ammunition for a confrontation meeting with the franchisee.
According to Nation’s Restaurant News and the Boston Business Journal, Dunkin’ Brands filed 350 lawsuits against franchisees between January 2000 and September 2002 compared to 12 similar suits filed by McDonald’s in the same span. The same publications say Dunkin’ Brands filed 157 lawsuits against franchisees between January 2006 and June 2007 compared to 5 by Subway.
DDIFO chairman Kevin McCarthy says, “Our organization is concerned that Dunkin’ Donuts will become as well known for its lawsuits as for its coffee and food products. In light of the competition our members face for loyal customers, we believe the Company should be sensitive of its image related to these matters. More time helping franchisees and less time investigating them would be better for all stakeholders.”
Logo from Dunkin’ Donuts.
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