Word: dunkin
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Instead of trying to compete head on at lunch and dinner, Dunkin' is betting on snacks like smoothies and miniature pizzas. Drive-through customers account for 60% of its business, so Dunkin' is focusing on food you can eat with one hand on the steering wheel. Since people stop in for coffee all day long, the hope is that they will be more inclined to grab a quick snack too. The prototype store uses high-speed ovens that can heat sandwiches in less than a minute while giving the bread those toasted brown edges no microwave can imitate...
...find a dollar doughnut menu at Dunkin'. Rather than engage in a price war with the fast-food giants, Dunkin' is trying to close the gap between itself and Starbucks. Although it makes more money on breakfast sales overall than the Seattle-based chain, the average Dunkin' check is just $1.85, vs. $3.75 at Starbucks, notes food analyst Tom Miner of research firm Technomic. Dunkin' has positioned its breakfast sandwiches as quick quality, at the same price as Starbucks, $2.99. "I think they're in a good position against their competitors," says Miner. "Their biggest challenge is to focus...
...people to try out its new menu, the company first has to get them in the door. That's not a problem in places like Providence, R.I., where there is one outlet for every 6,000 people. But Dunkin' has had a rougher time west of the Mississippi River, where it has only about 60 of its 5,200 U.S. stores. Previous efforts to go cross country were haphazard, and those lonely outposts got blasted by stronger regional brands. This year, when Dunkin' rolls out in such new markets as Phoenix, Dallas and Las Vegas, it will blanket them with...
...these changes are making some longtime franchisees nervous. Store owners typically net about $170,000 on revenues of $850,000 per store each year, even after Dunkin' takes its 5% cut of sales and 5.9% in advertising and management fees. But upgrading to the new look, mandatory by 2015, will cost more than $200,000 per store, wiping out a year's worth of profits. And some question whether the $7,500 TurboChef ovens are worth buying when the new hot food items may bring only marginal sales increases. Microwaves work fine for breakfast sandwiches, they say. Currently...
...over nervous owners, Dunkin' is pointing south, to Sarasota. At the prototype store, franchise partners Marvin Kaplan, Kevin Millard and Shawn Cabral say new chicken biscuits, flatbreads and pizzas account for 10% of sales. Their shop, close to popular Siesta Key Beach, is packed by 10 a.m. on weekends. It opened on Jan. 26 and is already beating sales at their other store, which is about a mile farther from the beach and brings in $1.2 million a year, according to Cabral. With more than 5,000 customers turning out for the first week and the average sale totaling...