independent joe issue 3 december 2009

also in this issue:Dunkin’ Donuts:

A PLACE WHERE THEYKNOW YOUR NAME?

CLEVELANDECONOMYSHRINKSWhile Dunkin’ Grows

December 2009 • Issue 3 DD Franchise owners Kini Do it together!

CHICAGO’S bIGGEST CML GOES ON LINE

www.lisasousa.com

Lisa & Sousa Ltd. is a firm with over 50 years of collective experience representing

multi generational Dunkin Donuts franchisees in the acquisition, financing, development,

structuring, transitions and transfer of franchised and other businesses.

Specific examples include:

transfer of ownership of 100 franchise locations in Northeast, Southeast and other parts

of the United States; sale of 48 locations in NY; purchase of 15 stores in the Northeast;

acquisition of multi-shop networks in Florida (18), Vermont (20) and Cape Cod, MA (20);

Store Development Agreements (SDA’s) throughout the country; and formation of

cooperative Central Production Locations (CPL’s).

Lisa & Sousa Ltd. is general counsel for the Dunkin Donuts Independent Franchise

Organization (DDIFO) with a membership of approximately 1500 Dunkin Donuts franchise

units nationwide.

Our clients have chosen to have an on-going relationship with Lisa & Sousa Ltd. because of

experience, proficiency, determination and attention to detail.

december 2009 • Independent Joe 3

Together we kin’ do it!As president of the dd Independent Franchise owners (ddIFo) I am pleased to introduce to you the third issue of “Independent Joe.”

Four times a year “Independent Joe” (IJ) magazine celebrates dunkin’ donuts franchise ownership. IJ is full of articles and information regarding the proud ownership of one of the world’s great iconic brands.

the mission of ddIFo is to unite dunkin donuts Franchise owners, to protect and advance their independent business interests. ddIFo is commit-ted to providing valuable information and dialogue to improve the day to day life of franchise owners. We act as a watchdog group for our mem-bers paying special attention to the brand, government affairs and legisla-tion. ddIFo also supports the dunkin’ donuts community Foundation with an annual contribution of 5% of our spon-sor revenue.

In conjunction with our board of direc-tors, the ddIFo is working hard to provide valuable support and represen-tation to our members. We trust you will find “Independent Joe” to be informative and entertaining. please review the ads in this edition and support the spon-sors that are supporting us and bring-ing opportunities to the dunkin’ donuts franchise community.

this year, ddIFo is celebrating its 20th year of existence. twenty years of independence while striv-ing to protect and enhance the business interests of dunkin’ donuts franchise owners. on december 3rd, we will hold our first ddIFo members meeting in chica-goland. We will celebrate ddIFo’s first organized chapter, the mid-West dunkin’ donuts Franchisee Association with top quality content, sponsor exhibition and significant member participation.

If you would like to form a chapter in your geographic area, contact us, we can help you.

ddIFo is forming chapters throughout the country as more members join more chapters will be formed. If you haven’t already joined take a minute and visit www.ddifo.org and join ddIFo today.

the strength of ddIFo lies in the orga-nization’s independence and its mem-bership. We are all stronger together. together We Kin’ do It!

I’d like to thank all the people that helped put this publication together including Amy Levine, ddIFo Spon-sorship director for coordinating our Sponsorship Advertising program

whose financial support is critical in making this publication

possible.

ddIFo has a fine team of writers that worked diligently to produce quality journalism, and valuable content,

special thanks to matt ellis, Sue minichiello,

and Stewart Lytle. ddIFo is fortunate to have Sue petersen

as our graphics designer, Sue not only creates appealing graphics but she is a wonderful illustrator. Last but not least, thank you to the franchise owners for taking the time to communicate and share great stories with us all.

by Jim Coen President, DDIFO, Inc.

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TogetherWe Kin’ Do It!Jim Coen, President

Cleveland EconomyShrinks While Dunkin’ GrowsStewart Lytle

DDIFO Eying Opportunities on Capital HillMatt Ellis

Multiple-ConceptFranchisingEddy Goldberg

DDIFO Directoryof Sponsors

Chicago’s biggest CML Goes On LineMatt Ellis

Dunkin’ Donuts: A Place Where They Know Your Name?Stewart Lytle

NEFA Meeting brings Negotiationto ForefrontSusan Minichiello

Index ofAdvertisers

“No franchise owner is ever as strong as a group

of united independent franchise owners.”

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be sure to visit the website www.ddifo.org, for breaking news and articles im-portant to running a successful dunkin’ donuts franchise.

I wish you a healthy, happy and prosper-ous new year.

4 Independent Joe • december 2009

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the cleveland and northern ohio economy is one of the nation’s hard-est hit, losing thousands of jobs and watching its population be cut in half. but for dunkin’ donuts franchise own-ers, it has been a good market.

despite the economy, “we have been able to succeed,” said Stewart White, who converted a mr. donut franchise to be his first dunkin’ donuts shop in Youngstown in the 1980s. He has been in the donut and coffee busi-ness for 32 years, expanding from Youngstown to cleveland where he has two stores and is opening a third.

White attributes dunkin’s success in the cleveland area to having good operators and a central production facility. He also said it does not hurt that dunkin’ is “a blue-collar brand in a blue-collar town.”

Cleveland Economy Shrinks While Dunkin’ Grows

cleveland and surrounding cities have been hurt by the flight of capital and jobs. once the home of major steel producers and auto-makers, cleveland in 1950 was the nation’s fifth-largest city with a population of 915,000.

today, its population is 440,000 and falling. cleveland is ranked among the five poorest cities in America. And its population is aging.

According to the U.S. census bu-reau, cleveland’s median age was 37 years old in 2006, up from 33 in 2000. And despite having eight four-year colleges and universities, the city’s population of 25 to 34 year olds dropped by 31.72 percent from 2000 to 2006, from 71,847 to 49,057.


by Stewart Lytle

Cleveland continued on page 16

the cleveland metropolitan area lost 24 percent of its manufacturing jobs between 2000 and 2005, according to a brookings Institution study.

the city is hoping its future economy can be tied to the health care industry built on the worldwide reputation of the cleveland clinic and the busi-nesses created by technology trans-fer from research done at case West-ern reserve University. but for now,

cleveland’s economy would not seem to be a place where many businesses would thrive.

dunkin’ donuts is growing in that market. the dunkin’ donuts’ penetration of the northern ohio

The population of Cleveland/Cuyahoga County dropped from 1.39 million in 2000 to 1.28 in 2009.

Independent Joe is published quarterly by dd Independent Franchise ownersEditors: Jim coen, matt ellis

Contributors: Stewart Lytle, Susan minichiello, eddy Goldberg Advertising: Amy Levine • Graphic Design/Production: Susan petersen

Direct all inquiries to:DDIFO, Inc. • 150 Depot Street • Bellingham, MA 02019

508-422-1160 • 800-732-2706 • [email protected] • www.ddifo.orgDD Independent Franchise Owners, Inc. is an

Association of Member Dunkin’ Donuts Franchise Owners.

Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of DD Independent Franchise Owners, Inc.

All Rights Reserved. Copyright © 2009 • Printed in the U.S.A.

IndependentJoeThe Quarterly Magazine of DD Independent Franchise Owners

market does not compare to new england, where “there is a dunkin’ shop on every corner,” White said.

but according to statistics provided by another dunkin’ donuts franchise


on February 3-4, 2010 ddIFo Legisla-tive Affairs coordinator rob branca will be in Washington representing the ddIFo at the second annual cFA day Forum.

“I’m really looking forward to getting together with other operators from other franchise systems and with our elected officials and their staffs to discuss important legislation,” said branca. “It’s important that we bring our perspective to these folks and discuss how new laws and reforms will impact our busi-nesses.”

Last year, ddIFo president Jim coen attended the first cFA day Forum. “It was a tremendous experience and demonstrated to me that ddIFo need-ed to be at the table with other fran-chise groups, members of congress and their staffs to ensure our agenda was understood,” said coen.

After naming branca Legislative Affairs coordinator, coen suggested he and ddIFo Government relations Liaison Joseph Giannino attend the 2010 cFA day Forum.

According to misty chally, the deputy executive director for cFA, represen-tatives from 10 different franchisee associations make up the cFA board of directors. each system sends two people to be a member of the cFA’s board of directors. She says the idea of bringing franchise representatives

DDIFO Eying OpportunitiesOn Capital Hill

Among the issues Branca is eyeing for 2010 are healthcare reform, credit card fee reform and cap-and-trade.

Capital Hill continued on page 20

by Matt Ellis

• Market Trends�

The Coalition of Franchisee Associations is the�national trade association representing�

franchisee associations from across the country!�CFA members represent over 14,000 franchisees�

employing over 1.2 million individuals.�

Coalition of Franchisee Associations�

1750 K Street Suite 200 • Washington, D.C 20006�Phone: (202) 416-0277 • Fax: (202) 416-0269�

2nd Annual CFA Day Forum�WASHINGTON, D.C. • FEBRUARY 3-5, 2010�

• Franchise Issues�

• Legislative Issues�• Best Practices�

CFA Day Forum Hot Topics:�

CFA Members�Buffalo Wings�

National Franchisee�Association�

Buy Here/ Pay Here�Better Business League�

An Association of�JD Byrider Franchisees�

DD Independent�Franchise Owners Inc.�

Independent Hardee’s�Franchisee�Association�

International Pizza Hut�Franchise Holders�

Association�

Meineke Dealers�Association�

North American�Association of�

Subway Franchisees�

National Franchisee�Association�

Owners 8 Association�

Supercuts Franchisee�Association�

FOR INFORMATION ON ATTENDING OR EXHIBITING AT THE CFA DAY FORUM CALL (202) 416-0277�OR VISIT US ON THE WEB at www.thecfainc.com�

directly into the halls of congress grew out of an interest among franchise groups to get involved in the legislative issues of importance to their business.

“It’s impossible for franchise owners to keep up with all the issues and initia-tives that can impact their business, that’s why cFA keeps them updated and acts as their voice on capitol Hill,” said chally. “the first cFA day on the Hill was a huge success and we’re looking forward to another successful event next year.”

Among the issues branca is eyeing for 2010 are healthcare reform, credit card fee reform and cap-and-trade. Health-care reform will, of course, impact virtu-ally all businesses in the U.S. but, as branca points out, massachusetts fran-chise owners are already working under


diversification, a recommended strategy in designing an investment portfolio, is a big part of the thinking behind the growth in multiple-brand franchising. no matter how good the roI may be from a single brand, sav-vy investors know it’s not wise to put all their eggs in one basket. As multi-unit franchisees seek new avenues for growth, increasing numbers of them are adding second, third, fourth concepts, and more to their franchise brand portfolios.

the increase in multi-concept fran-chising has been accompanied by a growth in the number of franchisors offering multiple concepts from under the same corporate roof. Usually, the family of brands is limited to a single industry segment (retail fast food or home repair services, for example), but not always. this growing trend offers benefits to both franchisors and franchisees.

For franchisors, it means dealing with fewer franchisees to sell more units. the multi-unit franchisee partners they work with also tend to be suc-cessful operators of other brands who understand franchising and have industry-specific experience. For those franchisors with multiple brands, it means working with a team they al-

ready know, saving countless hours of startup time, training, and relationship-building.

For franchisees, building on an already successful relationship also saves time and helps them open units sooner. It also can mean discounts on franchise fees for those buying the right to open an additional brand from the same franchisor.

In fact, there are many reasons, taken alone or together, that inspire multi-unit franchisees to become multi-brand operators:

Territory built out. For an area developer who has built out their ter-ritory, or a franchisee of a brand with no local opportunities for opening new units, adding a new brand (or two) can be the perfect path to continued growth in their current geographic region--without having to travel to new, distant locales.

Balance economic cycles. Fast-ca-sual dining as a segment took a huge hit in the recession, while bargain-priced fast food did fairly well. new car dealers also suffered, while au-tomotive maintenance and repair busi-nesses held their own or expanded.

operating brands in several market segments can help smooth the ups and downs of an uncertain economy.

Balance geographic or seasonal cycles. A lawn care franchise in a four-season climate slows to a crawl in the winter. Ice cream, lemonade, and frozen desserts peak in the warm weather, so why not add soup and sandwiches? Adding a year-round business to ride out the winter will keep employees engaged and the cash flowing in. the new brands can be in related sectors (maid service, electrical, plumbing, home insulation), or in completely different areas (food, rental centers; see next item).

Balance cash flow. one multi-brand franchisee owned several Applebee’s restaurants and several Aaron’s rents stores. Stocking an Aaron’s with rental merchandise is expensive, and monthly rental fees don’t cover the purchase price for 6, 12, or 18 months, tying up valuable cash in inventory. the daily cash flow from the Applebee’s was the perfect comple-ment to keep the enterprise afloat until the Aaron’s stores started showing a profit--which they did handsomely in time.

Balance day parts. breakfast, lunch, dinner, late night, and in-between. Whether it’s food or services, consum-

Multi continued on page 19

Multiple-ConceptFranchising by Eddy Goldberg

Courtesy of Franchise Update Media GroupThe Growing Allure of Operating Several brands

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Absolut Contracting William Lako4346 route 27princeton, nJ [email protected]

AflacSteven ross200 Atlantic AvenueSwampscott, mA 01907781-592-3765stevenross@aol.comwww.voluntarybenefits4dunkin.com

Air Ad Promotions, Inc.crystal Shillerp.o. box 202066Arlington, tX 76006 682-518-7692 [email protected]

Bedford Cost Segregation bill cusato60 State Street – Suite 700boston, mA 02109978-263-5055 [email protected]

Brendon Pierson/PurePayroll brendon pierson, Jr. or Jeff Kotch po box 1750 Wall, nJ [email protected]@purepayroll.netwww.brendonpierson.comwww.purepayroll.net

Century Products, LLCrobin rock404 edwardia driveGreensboro, nc 27409336-292-8090rcr@centuryproductsllc.comwww.centuryproductsllc.com

Comcast Business ServicesJamie Gersten500 South Gravers roadplymouth meeting, pA 19462610-405-4135jamie_gersten@cable.comcast.combusiness.comcast.com/internet/index.aspx

Construction Art Art Krebs3 Stone Hill driveWestborough, mA 01580888-930-2255constructionart@constructionart.uswww.constructionart.us

Duro-Last Jim Schriber 525 morley driveSaginaw, mI [email protected]

DTT Surveillancemira diza1755 north main StreetLos Angeles, cA [email protected]

Granite TelecommunicationsLiz doherty100 newport Ave ext.Quincy, mA [email protected]

Harbour Capital Scott dillon121 Shattuck Waynewington, nH 03801866-224-9958sdillon@harbourcapital.comwww.harbourcapital.com

IKMS Group Inc. cliff prattpo box 6221manchester, nH [email protected]

iTech Digitalnatalie Himmel4287 W. 96th StreetIndianapolis, In 46268317-704-0440 ext. [email protected]

James P. Ventriglia, CPA, Inc.Jim Ventriglia145 phenix Avenue, 2nd Floorcranston, rI 02920 [email protected]

JenCas Financial, Inc.eric dyson4 country club circle - Suite 202maumelle, Ar 72113877-953-6227 ext. [email protected]

Jera ConceptsWynne barrett17 Fruit StreetHopkinton, mA [email protected]

Lisa & Sousa Attorneys at Lawcarl Lisa, Sr.5 benefit Streetprovidence, rI [email protected]

Directory of Sponsors

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Directory of SponsorsMacdonald Restaurant Repair Servicemark & debi macdonaldpo box 61/ 83 pond St norfolk, mA 02056508-384-9361debi@macdonaldcompany.comwww.macdonaldcompany.com

New England Repair ServiceJerry brown100 charles Streetmalden, mA 02148781-873-1536jerry.brown@necoffeeco.comwww.newenglandcoffee.com

NITCO Materials Handling Solutionsbrenden Flagg6 Jonspin roadWilmington, mA [email protected]

Paris-KirwanJohn mulcahy1040 University Avenuerochester, nY [email protected]

Paros Technologieschitra mandi2 eastwick drive-Suite 200bGibbsboro, nJ 08026856-627-2097cmandi@parostechnologies.comwww.parostechnologies.com

PaychexJim munro100 river park drivenorth reading, mA [email protected]://premier.paychex.com/ largebusiness.com/index.aspx

Payless Shoe SourceLarry dunning3231 Se 6th Avenuetopeka, KS [email protected]

PepsiComike minchello315 norwood park Southnorwood, mA [email protected]

Performance Business Solutions, LLCJeff Hiatt87 Lafayette road - Suite 11Hampton Falls, nH [email protected]

Projex Unlimitedmichael thomas4350 International blvd., Suite Jnorcosss, GA 30093770-564-0074 ext. [email protected]://askprojex.com/dunkin/

R.F. TechnologiesGary Gerst542 South prairie Streetbethalto, IL 62010618-377-4063 ext. [email protected] www.rftechno.com

Retail Control Solutionsbob Schellenbach460 Hillside Avenueneedham, mA [email protected]

Rheem Water HeatingSal brunetto4081 expressway driveronkonkoma, nY [email protected]

Richard Brothers Electricbill richard905 South main Streetmansfield, mA 02048800-507-9866office@richardbroselectric.comwww.richardbroselectric.com

Royston, LLCbonnie padgettone pickroy roadJasper, GA 30143770-735-3456 ext. [email protected]

Secure Energy Solutions, LLCchristopher duby146 chestnut Street – Suite 400Springfield, mA 01103413-733-2571 ext. [email protected]

SnagAJoberin powell4880 cox roadGlen Allen, VA [email protected]

Stahl Cowencarmen d. caruso, trial Lawyer55 West monroe Street , Suite 1200chicago, IL [email protected] or www.stahlcowen.com

Sponsors continued on page 17

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Thanks the Board of Directors and Members of the MidWest Dunkin’ Donuts Franchisee Association for Joining DDIFO!

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At 45 thousand square feet it is the largest kitchen facility of its kind—at least within the dunkin’ donuts system. the chicago cmL went on line in november and is ramping up to eventually produce up to 150,000 dozen donuts per week, according to Vishal Shah, one of three owners of the central kitchen in chicago’s northwest suburbs.

despite its maturity as a dunkin’ donuts market, chicago has never before had large central kitchens.

“there have been what I would call mini-cmL’s in the past but many fran-chise owners were mostly producing their product themselves—feeding the stores in their own networks,” said Shah.

the new chicago cmL differs from the cmL’s in other markets in that it is not a cooperative owned by all the franchise owners who receive shipments. It is a third party kitchen—owned and operated by just three franchise owners—whose customers are other dunkin’ donuts franchise owners.

“I believe we are the only operation of its kind within the entire dunkin’ system,” said Shah. “certainly, in this market, you can say we are the most consistent product out there.”

cmL’s are valued for their ability to be efficient, cost-effective and consis-tently produce top quality products. the chicago cmL, with its state-of-the-art equipment and ample space could well be the most efficient facility anywhere.

Chicago’s biggest CMLGoes On Line by Matt Ellis

“We were able to design it to maxi-mize work-flow and the cost of our product is at, near, or lower than cost of production for any franchisee in our market,” said Shah.

Joe Salema opened the first dunkin’ cmL in portsmouth, nH in 1990. He says the facility was 3,000 square feet and made donuts for 8 stores. today, his operation—one of about

80 in the system—is 12,000 square feet and produces over 17,000 dozen a week.

With the advent of cmL’s franchise owners were able to cut costs and offer a more consistent product. It also changed the face of retailing, according to mark dubinsky, a former franchise owner who is now president of a cmL in methuen, mA.

“All of a sudden you didn’t need that 2,000 square foot store to be in business,” said dubinsky. “You didn’t need that space to accommodate the baking. that meant you could open a store with a smaller footprint for less money.”

While cmL’s are common in markets like new england, new York and chi-cago because of their density, they are not nearly as common in newer markets.

mario russo opened his first fran-chise in north carolina three years ago; today he has three stores. Like many newer franchisees, he got started with a kitchen in his store –

baking donuts at all hours and even-tually providing product for all three of his locations.

“We spent about $150 thousand on all the equipment we needed,” said russo who now brings donuts in from a manufacturer and fresh-bakes them on site.

In markets where cmL’s are the norm, it’s not just the franchise own-ers who benefit; the community does as well. the Liberty bakery Kitchen in brockton, mA employs approximately 100 people in the community. Un-like manufacturers of cars or other consumer products which have had

Chicago continued on next page

Chicago’s CML goes online in November, 2009.


Chicagocontinued from previous page

to cut production and jobs because of the economy, the demand for do-nuts and other baked goods remains strong. that means jobs for bakers, cleaners and drivers to distribute the product. In fact, brockton is home to a number of food-related produc-tion facilities including a bakery that provides bread and rolls for a large supermarket chain. during this reces-sion, Liberty has trimmed overtime costs but has not had to furlough or eliminate any full-time positions.

paul Wright, the general manager of Liberty bakery Kitchen, says the op-eration provides bakery products for 130 dunkin’ shops in massachusetts producing 36,000 dozen per week. “We are on par with or larger than any other cmL in new england and are one of the largest in terms of the number of stores for which we bake,” said Wright.

but at 22,000 square feet, Liberty is about half the size of the new chica-

Chicago continued on page 22

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Friday mornings are the best at their favorite dunkin’ donuts shop, they said. It is the morning when most of their group of 10 or 12 gathers at the dunkin’ donuts shop in Salisbury, mA, just off Interstate Highway 95 to have coffee, donuts, muffins and a large dose of conversation.

there is no leader and no official organizer, although they have des-ignated claire ryan as the official “historian” for the group because “she knows everything about everybody.” It has no name. the group of frequent customers started coming to this dunkin’ donuts shop every morning about 10 years ago, regardless of weather.

“It is a place we can all get together,” said Helen Gross. “It keeps our minds moving.”

“everybody is so friendly,” said pat, who declined to disclose her last name.

“Its good therapy,” chimed in Ann, when asked why they come. She likes to bring the belts and scarves she makes to show the group and oc-casionally sell one.

Francis blood, a former Amesbury postmaster, said, “It’s like cheers, where everybody knows your name.” blood orders the same coffee and muffin every day, so the dunkin’ donuts staff has it ready for him when he walks in. “I don’t even have to or-der. Sometimes I tell them I would like to try a donut, but no, I get the same thing every day.”

He said his daily check is $2.95. And he announced to the group that he has calculated that he spends a total of about $1,100 a year. the mostly women he sits with each day nod-ded in agreement. “once in a while I would like to have a free donut,” he said.

In dunkin’ donuts shops across the country groups of people – some

small, others larger – gather daily or several times a week to drink coffee, sometimes eat, but always to meet friends and talk. In this way, dunkin’ donuts shops have replaced the small town cafes in America as the center of casual community life.

politicians frequent dunkin’ donut shops in search of not only a good cup of coffee and donut, but in

quest of votes. Somerville, mA alderman dennis Sullivan holds office hours in dunkin donuts at Union Square and on Highland Avenue in Somerville because he knows he will always find his constitu-ents there.

“It is the way to start the day,” said nancy colby, a retired real estate agent and kindergarten teacher, who comes every day to the dunkin’ donuts shop across the traffic circle on route 1 from the essex county courthouse in newburyport, mA. “besides, I like donuts.”

She comes to the shop either to sit inside and talk with friends or to drive through on her way with her dog to the plum Island airport where “it is peaceful.” She has a coffee and a donut, and the staff, knowing her love of her dog, gives her a free munchin for the dog.

“It is a great place to gather, meet friends, fight loneliness,” colby said on a day when she met her friend, robert, inside the store for coffee, do-nuts and conversation. “people come to get out of the house,” she said.

She and robert used to meet at the

teahouse in newburyport, but the teahouse closed.

other frequent customers echoed that sentiment. “there is no place else to go,” said Susie, who meets daily with her friend, Joyce, and usually another friend at the dunkin’ donuts shop in port plaza across newburyport on Storey Avenue.

dunkin’ donuts is not likely to close, they said.

Susie arrives first each morning, reads the boston Globe and drinks her first cup of coffee. then Joyce arrives and they catch up on family, particularly their children, friends and local politics. they are republicans in a largely democratic world, so they have much to talk about, Joyce said.

they like coming to dunkin’ donuts more than smaller cafes because “you don’t feel pressure to order more than you want,” Susie said, working on her second cup.

“mostly we laugh a lot,” Joyce said. “It’s healthy.”

“It is a good way to start the day. Air everything out,” Susie says.

Susie said it is not a good day when her friends don’t come to have coffee. on that day, the third friend was sick with a cold and would not make it.

Dunkin’ Donuts: A Place WhereThey Know Your Name? by Stewart Lytle

They Know You continued on next page12 Independent Joe • december 2009

Politicians frequent Dunkin’ Donut shops in search of not only a good cup of coffee and donut, but in quest of votes.

Stephen Pagliuca (left), candidate for U.S. Senate in Massachusetts, campaigns at a Dunkin’ Donuts shop, with Matt O’ Malley, a West Roxbury resident.

After her gathering each morning, Susie goes home to get dressed for work. Joyce said she just goes home.

their only complaint: they would like for the shop to install shades on the front windows. “Sometimes I sit here with my sunglasses on,” Joyce said.

dunkin’ donuts has also evolved into a second office, a conference room with food where deals are done, where people get caught up on paperwork and job candidates are in-terviewed. the shops are an outlet for more crowded offices with bad coffee or for those who work alone in home offices, several customers said.

“Some customers are in here two and three times a day,” said store man-ager Samina Ahad in Salisbury.

John Hampton, the owner of a boat repair company, comes to the dunkin’ donuts shop on route 1 near rowley, mA several times a week to catch up with his crew. “It is nice to get away from the shop for a few minutes, have

a coffee and relax with the guys. We don’t really have a place (at the boat-yard) for us to sit and talk,” he said.

Joe Kimball, a certified public accountant in providence, rI, and a

They Know You continued from previous page


member of the ddIFo board of directors, has a choice of going to one of two dunkin’ donut shops when he needs a cup of coffee and conversation. “It is amazing. You always see the same faces in the same seats,” he said. “It is very com-forting.”

When he came in one day after being out of work for medical reasons for a few months, he said the staff told him several other customers had been asking where he was. on weekends he likes to stop in with his three-year-old grandson. “It is a big deal for him. He is drinking his milk and having a munchin and he loves it that the guys

come over and talk to him,” Kimball said.

At the dunkin’ donuts shop across from the newburyport courthouse, each morning lawyers and clerks share tables to discuss the upcoming cases over coffee and donuts before the judge ever hears them. one clerk, who asked not to disclose her name,

They Know You continued on page 21

Pat, Helen Gross, Claire Ryan, Ann and Francis Blood (standing) regularly gather for coffee and conversation at Dunkin’ Donuts in Salisbury, MA.

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At the november 17 meeting of the new england Franchise Association, nego-tiation was the word.

About 40 attendees, largely franchisors and franchisor service providers, gath-ered at the marriott Hotel in newton, massachusetts, to network and share a meal along with ideas and information. current ddIFo board members Jim coen, Kevin mccarthy and pat Kauf-mann are all neFA members.

After the networking hour, neFA president Steve dubin (of pr Works) opened the meeting by welcoming the crowd and introducing the board mem-bers in attendance: ddIFo president Jim coen, nancy connelly of mediation Works Incorporated, barbara Arena of cIt, Attorney Suzanne cummings, Jeff Sturgis of Fantastic Sams, John buckley of coffee news and matt miller of rooter-man. coen followed by an-nouncing the upcoming year’s schedule of neFA meetings and speakers and, as dinner progressed, michael radin of tarlow, breed, Hart & rodgers present-ed a legal and legislative update.

then it was on to the featured speaker. Stephen Frenkel, director of negotia-tion programs at mediation Works, In-corporated (mWI), presented “negotia-tion Skills for the Franchised business.”

When asked why franchise owners should care about the art of negotiating, Frenkel replied, “negotiation skills give you the ability to persuade people you don’t have actual power over. As fran-chisees you’re in business to succeed, to do as well for yourselves as possible. When you switch from a short-term, combative approach to a long-term, collaborative approach with the franchi-sor, you’re more likely to achieve the success you desire. Knowing how to best negotiate can also help you get a seat at the table and give you ways to effectively address disputes.”

Frenkel is recognized as an interna-tional expert. In his role with mWI, he oversees all negotiation training and coaching services, is a hands-on coach who helps clients build their negotiating

capabilities and routinely serves as a featured speaker at conferences and other events nationwide. In his presen-tation at the neFA meeting, he ad-dressed a variety of tools and concepts related to effectively managing franchi-see/franchisor relationships.

to engage the audience and quickly demonstrate the inherent challenges to

negotiating successfully, Frenkel led an interactive exercise. In no time at all, the exercise raised two valuable les-sons about negotiating: Question your and their assumptions, and identify your goals. Frenkel spoke of these elements as “expanding the pie,” saying that before you discuss how much of the

NEFA Meeting bringsNegotiation to Forefront by Susan Minichiello

Negotiation continued on next page

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Jim Coen, NEFA Board Member and DDIFO President; Stephen Frenkel, Director of Negotiation, Mediation Works, Inc.; and Nancy Connelly, NEFA Board Member and Director of Commercial Mediation and Arbitration Programs, Mediation Works, Inc.

In most cases, the collaborating style is best as each side stands the best chance of reaching its desired outcome. As Frenkel pointed out, however, it takes honesty, trust, strong communi-cation, time and a lot of work: It’s no mistake that “labor” is part of the word “collaboration.” When preparing for any negotiation, you need to figure out what

style is right for the given situation, keeping your long-term goals and relationships in mind.

As the presentation neared its end, Frenkel described the seven factors of collaborative

or interest-based negotiation that lead to an optimal agreement:

1. Interests: meeting both sides’ needs, not positions

2. options: deciding on best of many creative choices

3. objective Standards: acknowledging external criteria (e.g., market/industry standards) both sides see as fair


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pie each party will get, focus instead on how much value you can create together to make a bigger pie to begin with so that, in the end, you both end up with more pie.

According to Frenkel, another vital fac-tor in successful negotiation is thinking and acting strategically. He advised against getting stuck in a “common Loop” in which you jump into action without much, if any, forethought and end up with an undesired result. rather, he suggested, you want to be thinking in a “Strategic Loop” in which you first frame your approach—identify goals (especially in the long term), test as-sumptions and plan a strategy—then use that frame to dictate the action that is most likely to produce your desired result.

Frenkel asserted that there are two main factors to consider when decid-ing on the best negotiation style to employ: substance (i.e., what you want or how much of what you want can you actually get) and relationship (i.e., how important is it to maintain an ongoing relationship with the other party). Fren-

kel described the following negotiation styles and the vastly different results each yields in terms of substance and relationship:

• competing/“my Way”: good for sub-stance, bad for relationship; can be useful if you know the rules and the scenario provides for a set winner and loser or if the relationship has no longstanding value

• Avoiding/“no Way”: bad for both sub-stance and relation-ship; okay only if you don’t care about either factor

• Accommodating/“Yes Way”: sacrifices substance to pre-serve relationship; okay if you’re more vested in the relationship than the substance

• compromising/“Half Way”: each party gets some substance and preserves relationship; can be good, but often neither party ends up happy

• collaborating/“our Way”: both parties achieve substance they want and preserve relationship

Negotiation continued

When preparing for any negotiation, you need to figure out what style is right for the given situation.

Negotiation continued on page 23


Cleveland continued from page 5

owner, Smb donuts’ partners Ken blum, matt doyle and rob branca, the cleveland area had 34 dunkin’ donuts shops in 2005. It added three and closed one in 2006 and added two and closed one in 2007. Last year, during probably the worst of the recession, four new shops opened and none closed. one more shop has been added this year for a total of 42 shops.

And more are planned or are under construction.

In Youngstown, White said, there were only three shops. now there are 13.

the average weekly customer count and the average check size have been on the rise as well. In the cleveland shops the average weekly

customer count has gone up from 3,687 in 2007 to 3,826 this year. the average weekly check has gone up from $3.74 to $3.81, despite the slower economy, according to the Smb statistics.

White said store revenues are being driven by coffee and other beverage

Cleveland continued on page 18

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sales. In years passed, donuts made up 50 to 60 percent of the sales mix, he said. now it is at 30 percent, and at some stores it is at 20 percent.

“there has been lots of growth, but it has been careful, well-financed and well-planned growth,” White said.

the Smb donuts group has been opening new shops at a fast pace. the group opened its third shop in parma to great fanfare last year, including a live broadcast from a local radio station.

“they (Smb) are good opera-tors,” White said. “they have come in here and really raised the bar for us.”

White attributes much of the success to the decision to locate a central production facility in cleveland. the production facility struggled at first, he said, because there were so few shops to buy its donuts. but with the dunkin’ growth in the market, the facility has thrived and now is being expanded to double its production capacity.

the vacant land in cleveland, es-timated at more than 3,300 acres, may be a blessing in disguise. “this market is not very pedestrian. there are a lot of wide open spaces,” White said.

the vacant land has helped franchise owners negotiate more favorable real estate deals. And it has made way for more shops that feature a drive through.

drive-thoughs are critical, White said. “I would never have a store without one.”

He learned from owning a shop with-out a drive-through. It struggled, he said, until he put in a drive-through.

In terms of coffee, dunkin’s compe-tition in cleveland is mcdonald’s, which has been aggressively promot-ing coffee, and a chain of gas stations, not Starbucks.

most of the traditional donut shops “are not on the radar,” as coffee sellers White said.

the gas stations are a potential threat, White said. not only are the gas station stores being upgraded, but customers can now order their coffee from the pump and have it waiting for them when they finish fueling their car, he said.

there are frequent rumors that tim Hortons shops are considering crossing the border from canada into cleveland, he said. but that has yet to happen.

the cleveland market is proof once more that committed owners running good shops with solid financial backing can succeed even in a economically declining market.


ers and businesses have needs 24 hours a day. If your business makes the majority of its sales at breakfast and lunch, adding a brand that peaks in the afternoon and evening will make for a longer day, but also add to profitability.

Hedge against surprises. Fast food operators have been hit hard over the years by news of salmonella, e. coli, and other developments beyond their control. Having other brands in their portfolio can help them stay afloat until the situation is remedied and trust in the brand restored.

Co-branding. Locating two or more brands in a single location also allows behind-the-scenes efficiencies, which boosts profits. For example, an ice cream brand located next to a sandwich brand can share the same back room, and employees can be shifted from one brand to the other to meet changing cus-tomer flow. be careful to keep in compli-ance with each franchise agreement.

Infrastructure. multi-unit franchisees with their own accounting, human re-sources, and other internal departments

often have excess capacity. Adding brands can take advantage of the exist-ing infrastructure, growing profits without greatly expanding the home office staff.

Hiring and retention. With two or more brands, a franchisee can offer employ-ees cross-training, flexibility, promotions, and a clear growth path as their skill sets improve. this helps with attracting and retaining top talent, always a chal-lenge in any business.

Cultures. one of the challenges in operating more than one brand is that each brand has its own culture. Some-times those cultures are not compatible, and considerable energy is expended trying to make them work together. Some multi-brand franchisees prefer to keep the operation and personnel of their brands separate. regardless, it’s important to choose a “brand champion” for each concept to prevent its being ignored. And remember, you have your own company culture and may run into difficulties fitting different franchisor sys-tems and values into your operation.

Entrepreneurial spirit. the challenge and excitement of starting something new and the satisfaction of expand-

Multi continued from page 7 ing their “empire” can be an irresistible attraction for an entrepreneur. Starting a new venture and making it grow is much more satisfying to many business owners than the nuts-and-bolts of daily operations.

Same industry or different? this is a highly individual choice. For one person, it’s a love of restaurants and customer service that gets their juices flowing. For another, it’s knowing their b2b brand is open only monday to Friday, 9 to 5, leaving evenings and weekends for fam-ily, friends, and themselves.

Synergy. each franchise brand has its own proprietary operating system, perfected over many years and many thousands of customer transactions. While the operating systems differ and must remain separate, sometimes ele-ments of one can be applied to another, or to internal operations at the franchi-see’s home office.

Limitations/restrictionsnew brands cannot be in competition with existing brands. check with your franchisor, franchise agreement, and franchise attorney before you start shop-ping for a new brand.

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a healthcare reform law that mandates employers with 11 or more employees are required to provide health insur-ance coverage or pay a “Fair Share” contribution of up to $295 annually per employee.

credit card fee reform is also some-thing of great interest to all retailers. currently three separate bills have been introduced in the U.S. Senate and House of representatives. the toughest, from Senator richard durbin [d-Ill.], would give retailers antitrust protection so they could jointly negoti-ate lower rates. Also, merchants would have the option of not accepting cards that charge them higher fees, which are used to offer consumers rebates and perks. one of the House bills would let stores charge minimum and maximum amounts for card purchases. currently, fees are split between the merchant’s bank and the card-issuing bank.

congress has already passed the credit card Accountability responsibil-

ity and disclosure Act of 2009, or credit cArd Act of 2009, which will go into effect in February 2010.

“the legislation we’re watching now will level the playing field between credit card companies and franchise owners,” branca said. “currently, the credit card companies internalize all the profits and externalize onto mer-chants the risks, burdens and costs.”

branca adds, he expects lawmakers he meets at the cFA day Forum will listen to the concerns the ddIFo and other small business represen-tatives have regarding the current fee system.

“Its important lawmakers hear from constituents,” said Giannino. “often times in Washington you see special interests walking in and out of hal-lowed halls of congress. but, when a group of local business owners takes time out of their schedules to visit capitol Hill and talk about an issue—that has impact.”


said more gets done at that dunkin’ donuts shop than in the courtrooms across the traffic circle. “At least it makes things move faster,” she said. the other clerks nodded in agreement over their coffees and snacks.

back in Salisbury, store manager Ahad came by to check on her group of elderly frequent customers. “I make sure they have everything they need. they like that,” she said.

Gross agrees. “You just don’t see friendly service else-where.”

claire, the historian, has brought in a new quilt she has finished to show the group.

but it is the conversation and camaraderie, not commerce, that draws them to their dunkin’ donuts shop. “We cel-ebrate birthdays. We talk local politics. It is a good place to do that. We share a lot of jokes,” Helen said.

the one thing that annoys the group and guarantees that some people are not invited back is failure to clean up af-ter themselves. So that almost never happens, the group agreed.

And they come, pat said, because dunkin’s coffee “is the best coffee in the world.”

They Know You continued from page 13


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LIBERTY ISLAND— It’s a quintessentially American tradi-

tion, suspended since Sept. 11, 2001: to climb to the crown

of the Statue of Liberty and view the nation’s greatest city

through the eyes of its greatest symbol.

On Saturday, the statue, closed above its base since the

terror attacks, will reopen tovisitors — a relative few, in

small groups, specially ticketed, carefully screened and es-

corted by a park ranger.The decision to again allow p

eople under Liberty’s skin

and up to her crown reflectstwo evolving attitudes

toward post-9/11 anti-terrorism security, public

opinion polls and security specialists suggest:

uIt may be time to begineasing some anti-

terrorism security that’s particularly costly, restric-

tive or intrusive.uSecurity and public conven

ience may not be mutually

exclusive.Interior Secretary Ken Salazar

seemed to encourage these

ideas this year when he saidreopening the crown “would

proclaim to theworld— bothfiguratively and literally

— that the path to the light ofliberty is open to all.”

In officially announcing themove onMay 8, Salazar

called it “a newbeginning, restoring confidence in the

American people, in their government and in our

place in theworld.”Visitors on Liberty Island that

day drew the obvious con-

Liberty gets her view backReady for her close-up: The S

tatue of Liberty’s crownwill open Saturday to small groups.

Visitorswill be screened and escorted by a park ranger.

Crown’s reopening represents

milestone in post-9/11 security

ByRickHampsonUSA TODAY

See COVER STORYnext pageu

USA TODAYGallupPolln

Star attraction: For those visiting Liberty Island, security

checks have increased dramatically since the 9/11 attacks.

Coverstory

The nation heads into theIndependence Day

holidayweekend amid the longest and steepest de-

cline in driving since the invention of the automo-

bile.Since the number of miles tra

veled bymotor ve-

hicles in the USA peaked inNovember 2007, the

nation’s 12-month total has dropped by 123 billion

miles, or slightly more than 4%. That’s a bigger de-

cline than the drop of justabove 3% during the

1979-80 Iranian revolution that triggered a spike in

gasoline prices in theUSA.

The 4% drop is the equivalentof taking between

8million and 10million drivers off the road.

“Wemaybewitnessing thebeginningof a funda-

mental shift in American driving habits,” says Ed

McMahon, senior research fellowat theUrbanLand

Institute, a non-profit groupthat promotes in-

novative development.The Federal Highway Admi

nistration’s miles-

traveled report for April, the most recent available,

suggests a slight flattening out. While April’s total

was up 0.6% from April 2008, continuing rises in

joblessness and gas prices arelikely to limit driving,

McMahon says.As the USA prepares to celeb

rate the Fourth of

July, many Americans are choosing to watch fire-

works close to home. AAA projects that the num-

ber of people taking a trip of50 miles or more this

holiday weekend will drop 1.9% from a year ago.

The leisure travel organization attri-

butes the projected decline to uncer-

tainty about the economy, “especially

rising joblessness and saggingpersonal

incomes.” The recent spike in gasprices

alsomight be a concern, AAAsays.

Gas priceswere the driving force be-

hind the nation’s change indriving

habits, says analyst Alan Pisarski, au-

thor of Commuting in America. “When

people saw $3 a gallon, whenthey saw

$4 a gallon, it was something akin to

sticker shock. It really didhavean effect

on people’s behavior.” He says people

started taking transit, carpooling,

merging trips and cutting back on va-

cation travel. Many stayed with alter-

nativemodesof transportationevenaf-

ter gas prices retreated last year.

Bernard Assaf, 36, a software engi-

neer from a northern Atlanta suburb,

says hewon’t get back in his car for the

40-mile round trip to work even if gas

prices plummet. With helpfrom The

Clean Air Campaign, an Atlanta non-

profit that promotes transportation al-

ternatives, he now carpools to a satel-

lite parking lot 7miles fromhome, then

takes public transit to his office. “For

me, it’s not just about the price of gas,”

he says. “If I put 40 miles a day on my

car vs. 14 miles, that’s a big difference.

I’ve gotten too used to doingthings besides grip-

ping the steeringwheel to goback.”

Pisarski andMcMahon say thedrop inmiles trav-

eled has had a greater impact on people living in

far-flung suburbs, whichwerehardest

hit by both the housing collapse and

high gas prices, and thosein rural

communities.John Crabtree, spokesman fo

r the

Center for Rural Affairs, a non-profit

rural advocacy and economic devel-

opment group based in Lyons, Neb.,

says it’s “a double-edged sword” for

many rural communities.

More people are shopping close to

home, giving local merchantsa boost.

“But if youor your child needto go the

doctor, and you live 40miles from the

nearest health care provider,it makes

a differencewhether gas is $2a gallon

or $3 a gallon,” Crabtree says.“People

are forced tomake difficult choices.”

The driving drop-off also signals a

reversal in auto ownership among Af-

rican Americans andHispanics, which

had been increasing since 1970, Pisar-

ski says. “Thatwill limit accessto jobs,

andwill be a factor in theoverall econ-

omy in getting people back towork,”

he says.McMahon says his research s

hows

that people over the past three years

are trending toward compact, transit-

oriented developments that mix resi-

dential, retail and office usesand en-

courage walking. Even when the

economy recovers, he says, people won’t resume

driving at previous rates.“We’ve crossed the Rubicon

here in terms of a

change,” he says.

4th arrives amid shift in drivinghabits

High unemployment, gasprices are taking their tollBy Larry Copeland and Paul O

verberg

USA TODAY

Traffic volumedrops

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mSports: Dog days for Cubs andMets

Marquee teams having “a tough go lately.” 1C.

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Contact Juniper Korkie703.854.5498

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LIBERTY ISLAND— It’s a quintessentially American tradtradtr i-

tion, suspended since Sept. 11, 2001: to climb to the crown

of the Statue of Liberty and view the nation’s greatest city

through the eyes of its greatest symbol.

On Saturday,rday,rda the statue, closed above its base since the

terror attacks, will reopen tovisitors — a relative few, in

small groups, specially ticketcketck ed, carefully screened and es-

corted by a park ranger.er.erThe decision to again allow p

eople under Liberty’srty’srt skin

and up to her crown reflectstwo evolviolviol ng attitudes

toward post-9st-9st /11 anti-terrorism security, public

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proclaim to theworld— bothfigurat

— that the path to the light ofliberty

Liberty gets her viewCrown’s reopeningingin represents

milestone in post-9st-9st /11 securityityit

ByRickHampsonUSA TODAYTODAYTOD

Star attrattrat action: For those visiting Libertyrtyrt Is

checks havehaveha increased dramdramdr atically since th

CoverCoverCo

mMoney: Car salesmaymayma start toinch up

In June’s bleak report, signs of“stabilization.” 1B.

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go facility. Shah and his partners believe the size and scope of their facility will benefit dunkin’ brands’ development ef-forts in the market.

“It allows them to bring in new franchise owners who don’t want to be in production business, which can lower the upfront costs,” said Shah who is confident his facility could expand to accommodate more stores in the market.

expansion is more challenging for existing cmL’s, however. constraints of space and capacity prevent some cmL’s from increasing production. So does the shelf life of bakery prod-ucts. A donut’s shelf life is considered 24 hours—though it’s widely believed the older the donut the less likely it will sell. donuts which are shipped unfinished can last longer.

“80 to 85 percent of the donuts we make are finished,” said Shah. “but that number may change if more owners want the option of finishing donuts on site so they can prolong the freshness.” of course, if a franchise owner chooses to finish on-site, he will need the space, equipment and labor to ac-commodate the effort.

20 years after the first cmL went on line the model continues to evolve. today, state-of-the-art means few human hands ever touch a donut in production, ensuring greater consis-tency of size, shape and texture. It’s a long way from Fred the baker, but for franchisees who get their products from cmL’s there is an appreciation of the savings and flexibility the central kitchen provides.

Chicago continued from page 11


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Zarco Einhorn Salkowski & brito, PA

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4. Alternatives: knowing what each side could do if can’t reach deal

5. relationships: improving, supporting or at least not damaging connections

6. communication: fostering quality inter-actions and clear messages between sides

7. commitments: forging realistic, opera-tional and durable terms

Finally, Frenkel provided advice for mov-ing forward to improve your negotiating power and skills, the most important of which is to practice—whether by yourself, with colleagues or with a coach—and to continue educating yourself about best practices via reading and professional training.

Frenkel’s company, mWI, is a boston-based firm specializing in effective negotiation, communication and conflict resolution training and services. Since 1994, mWI has provided services to such global clients as coca-cola enterprises, Gm, cVS caremark and VISA Internation-al. the company’s methodology is based on the work of roger Fisher, author of Getting to Yes, and his colleagues at the Harvard negotiation project.

If you’d like to learn more about mWI, check out www.mwi.org. If you’d like to speak with Stephen Frankel or get a copy of his helpful negotiation prep sheet, you can reach him at [email protected] or 800-348-4888, extension 24.

Negotiation continued from page 15

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Lisa & Sousa, Ltd.Attorneys at Law

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New EnglandRepair Service

Zarco Einhorn Salkowski & Brito, P.A. is recognized as one of the top franchise law firms in the United States. Indeed, four of the firm’s partners have been on The Best Lawyers of America list for sev-eral years – Robert Zarco, Robert Einhorn, Robert Salkowski and Alejandro Brito. The firm handles all aspects of franchise, licensing and distribution law, as well as complex commercial disputes. The firm’s reputation is built upon its determined approach to resolving client matters with practical and effective solutions. “We truly value being problem-solvers for our clients,” says Robert Zarco. Known for its aggres-sive litigation style, the firm applies a team approach to all matters, ensuring that the firm’s resources can be devoted to each client. The firm routinely handles litigation and arbitration matters throughout the United States and abroad. “We provide our franchise clients with dedicated and skilled representation, no matter where they are located,” commented Robert Einhorn.

Ethics, Perseverance and Creativity

Maintaining an ethical approach to their clients’ matters is paramount to the firm’s lawyers. “Although we are known as tough lawyers, we are equally appreciative of the professional respect that we engender from opposing counsel,” says Robert Salkowski. In light of the elevated stakes that are typically involved in the firm’s litigation and arbitration matters, the firm counts on perseverance and creative so-lutions. These traits have become particularly valuable to the firm’s clients during difficult financial times. “Clearly, this is an unprecedented and extremely stress-ful time in many of our clients’ lives and it is our job and obligation to assist them through it,” says Alejandro Brito. Zarco Einhorn Salkowski & Brito, P.A. – expe-rienced and well regarded business lawyers with practical solutions.

From Left:Robert Zarco, Robert M. Einhorn, Himanshu Patel, Alejandro Brito & Robert F. Salkowski

100 SE Second Street27th FloorMiami, FL 33131Phone: 305.374.5418

www.zarcolaw.com

Zarco Einhorn SalkowSki & Brito, pa

Successfully representing Dunkin’ Donuts franchise owners since 1993

ContACt:Robert Zarco - [email protected] Salkowski - [email protected]

Bringing Creative Solutions to Your Complex Legal Problems

independent joe issue 3 december 2009

Documents

dunkin donuts franchise

ddifo members

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strength of ddifo

mission of ddifo

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day life of franchise