Dunkin’ Donuts – the birth of a new distribution and franchising concept

Dunkin’ Donuts is a global retailer of coffee and bakery products. The company is 99 per cent franchised and has used the franchising system as a route to market entry and expansion worldwide. The original historic roots of the company are in the USA and despite wide international expansion since the 1970s, the US market continues to serve as a testing ground for innovations prior to international roll‐out. Based on observation and key informant interviews with core members of the management team during a visit to the Richmond project in 1994, the case explores the initial phase of the introduction of a central production facility as an innovative route to pre‐eminence in one test market. Strategic and operational issues are discussed, highlighting the differences and efficiency gains of the central production facility‐cum‐satellite store approach compared to the traditional stand‐alone on‐site production approach. Implications for future developments are discussed.