New Dunkin’ Donuts outlets by the dozen — two, to be exact — are in the newly reinvigorated Minnesota pipeline thanks to a pair of franchise agreements announced Wednesday by the nation’s largest doughnut-and-coffee chain.
These two deals follow a franchise arrangement announced in April for 10 outlets starting potentially by the end of 2015 in Minneapolis, Bloomington, Eden Prairie, Edina and other west-metro communities.
With 34 locations on the drawing board for the Twin Cities area, Dunkin’ Donuts executives believe there’s enough hunger for their menu to push that total even higher.
“We do think there is more opportunity, and we continue to work with more franchise candidates,” said Steve Rafferty, Dunkin’ Donuts senior director of business development, who specifically mentioned the south metro as an area ripe for expansion.
“That will be driven in large part by consumer demands,” Rafferty said in an interview. “They’ll let us know whether we need to come back and build more.”
In the summer of 2014, Dunkin’ Donuts ended a nearly 10-year hiatus from Minnesota, with the opening of an outlet at the Kahler Grand Hotel in downtown Rochester. Within weeks, another franchisee revealed plans to build Dunkin’ outlets across northern Minnesota, from Brainerd to the Iron Range to the Duluth area. The first one opened in June.
The two newest agreements involve franchisees:
• Kod Kod Enterprises, which plans to develop 12 outlets in the northern Twin Cities suburbs and the St. Cloud area. Kod Kod hopes to debut its first location in 2017 and have the remainder operating by 2024.
• Vantive Group, which also plans to develop 12 outlets in the east metro and surrounding areas. This group currently owns and operates five Dunkin’ Donuts locales in Chicago. Vantive Group is on the same timeline in the Twin Cities as Kod Kod.
Until these recent Minnesota deals, a franchisee in Austin had been the last to run a Dunkin’ Donuts in the state. That location became the Donut Connection in 2005.
In 2008, Dunkin’ Donuts had announced plans to sell about 100 franchises in Minnesota. That effort never materialized, the company explained, because it lacked the proper supply chain, training and other operations for the region.
Dunkin’ Donuts, with more than 11,400 restaurants in 39 countries, has been steadily expanding its sandwich and wrap offerings in an effort to counter competitors such as Starbucks and Brooklyn Center-based Caribou. The chain, operating since the 1950s, is strongest in the Northeast.
The company’s persistent push into Minnesota follows inroads in 2013 in Salt Lake City, Dallas, Houston and other markets far from its base in the Northeast.
Dunkin’ Donuts said that franchise opportunities remain available in Mankato and Rochester. As incentives, officials said, reduced royalty fees for three years and up to $5,000 in local store marketing support for timely openings are being made available.
Franchise deals in this industry don’t come cheap. When Dunkin’ Donuts hosted a webinar last year for potential franchisees, the company said that prospects needed $250,000 in liquid assets and a net worth of at least $500,000.