US Market Still the Biggest for Dunkin’ Brands

Dunkin’ Brands (DNKN) operates two brands – Dunkin’ Donuts and Baskin-Robbins. The company operates both these brands across the United States and in international markets.

Dunkin’ Donuts is the most important brand, generating 77% of the revenue or $568 million as of fiscal year 2014. Of this, $548 million was generated from the US market and the remaining from international markets. There were more than 11,300 Dunkin’ Donuts locations systemwide in 2014.

Baskin-Robbins generated 23% of revenue, or $122 million, in fiscal year 2014. Of this, only $43 million came from the US market, and the majority of the revenue was generated from international markets. There were more than 7,500 Baskin-Robbins locations systemwide in 2014. We’ll look in more detail at unit growth later in this series.

The biggest market for Starbucks (SBUX) is the Americas. The American segment includes revenues mainly from the United States, Mexico, and Canada. SBUX is also held by the consumer discretionary ETF (XLY). XLY also holds 4% of McDonald’s (MCD) and 1% of Chipotle Mexican Grill (CMG).

Dunkin’ Brands earns the majority of its income through royalties and fees from the Dunkin’ Donuts and Baskin-Robbins franchises. Interestingly, the company doesn’t have a supply chain like Domino’s Pizza (DPZ) or Papa John’s (PZZA), which both have an additional stream of revenue from this source.

Dunkin’ Brands has about 43% of its locations in the international markets. Operations in various countries are subject to rules and regulation of the respective countries and can stress the resources of the company. Restaurants typically use the master franchise model to expand internationally.