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Want to Own a Dunkin' Donuts Franchise? Know This First

Stocks in this article: DNKN KKD THI SBUX

NEW YORK ( TheStreet) -- Dunkin' Brands (DNKN) last month said it was finally expanding its doughnut-and-coffee franchise to Southern California.

Dunkin' Donuts has 7,300 U.S. locations (with just 31 company-owned stores). The company is looking to recruit franchisees for Los Angeles, Riverside, San Diego, San Bernardino, Ventura and Orange counties. It expects the first of the new stores to open in 2015.

While the California Dunkin' stores are getting much fanfare, the plan is a continuation of the steady expansion that the Canton, Mass.-based franchisor has been making from coast to coast. This year, Dunkin' Donuts plans to open as many as 360 stores in the U.S., on top of the 150 net U.S. new locations in 2012, fitting in with its goal of ultimately being an organization of more than 15,000 Dunkin' stores. The company has a global total of roughly 10,400 locations (excluding those in the Baskin-Robbins ice cream brand, which it owns).

>>>Dunkin' Donuts May Win Health-Care Battle

TheStreet caught up with Grant Benson, vice president of franchising and business development for Dunkin' Donuts, to discuss the doughnut-and-coffee maker's franchising plans.

Dunkin' used to be in California and then you pulled back, but now you're going at it again. Can you talk about that and why now is a good time to enter that market?

Benson: Dunkin' has been around for 65 years, so in the past there have been markets where someone has come to us and said, 'Look, we'd like to open a store or a couple of stores. Can you support that?' Generally, we have said 'yes' to those situations. One of the things we really learned, though, and it's become increasingly clear in the competitive QSR environment of the past 10 to 15 years, is that if you're going to go into a market, you've really got to go with the intention to go in a big way. So the fact that we may have sprinkled a few stores here or there over the last 60 years in California or somewhere else is not a market-entry strategy. What we've really been doing over the course of the last four to six years is making a significant commitment.

We're going in a methodical manner that would allow us to gain critical mass in that marketplace, become convenient for the guests, and to be able to generate the advertising voice, if you will, necessary to compete. But that's truly no different from how we would go into Nashville, or Des Moines, or any other market where we don't have a lot of presence yet and we're committed to gaining it.

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