International presence: Dunkin’ brands’ positive global outlook
An international presence
Dunkin’ Brands have had an international presence since 1961’s introduction into the Canadian market. Currently, their key markets for both brands are in Asia and the Middle East, which comprised 73.8% and 13.6% of international franchise sales for FY2012, respectively. This represents 23.0% of total franchise sales. There are over double the international Baskin-Robbins than international Dunkin Donuts locations, which means Baskin-Robbins generates roughly 87% of international revenues and 15% of franchise based revenues.
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South Korean restaurants account for 36% of internationally reported franchise sales during FY 2012. Of that 36%, 58% was contributed by Baskin-Robbins sales. Dunkin Brands Group maintains one-third ownership stake in brand joint ventures, with Korean shareholders retaining the remaining two-thirds ownership. This acts as a franchise precedent for the Korean market, paving the road for future additions. The joint venture allows the company to retain control of the supply chain, which ensures consistent quality among its ice cream, donut, and coffee offerings. Korean locations (as of December 29, 2012) total 1,020 for Baskin-Robbins and 883 for Dunkin’ Donuts restaurants.
Japan was home to the first overseas Dunkin’ Donuts, and it currently contributes the second largest portion of Dunkin’ Brands Group’s international revenue: 27% of total international revenues for FY2012. This was generated exclusively through 1,127 Baskin-Robbins stores. Similarly to Korea, the company has a joint venture agreement in which it retains 43.3% control. The remaining ownership stake is divided among local companies or partners and public shareholders, which own 43.3% and 13.4%, respectively. Once again, the joint venture is responsible for manufacturing and supplying ice cream to franchises.
The Middle East
Restaurants in the Middle East accounted for approximately 14% of total franchisee-reported sales from international operations for fiscal year 2012. Baskin-Robbins accounted for approximately 75% of such sales. Dunkin’ Brands Group conducts operations in the Middle East through master franchise arrangements. Success in this geographic segment likely stems from consumers’ demand for a cold refreshments in a warm climate.