Baskin Robbins 2011 Annual Report Download - page 14

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five popular Dunkin’ Donuts flavors, including Original Blend, Dunkin’ Decaf, French Vanilla, Hazelnut and
Dunkin’ Dark®. In addition, participating Dunkin’ Donuts restaurants offer, on occasion, Keurig Single-Cup
Brewers for sale. We believe this alliance is a significant long-term growth opportunity that will generate
incremental sales and profits for our Dunkin’ Donuts franchisees. We believe there has been no significant
cannibalization of our other coffee business to date from the sale of K-Cups.
Extend leadership in breakfast daypart while growing afternoon daypart. As we maintain and grow our
current leading market position in the breakfast daypart through innovative bakery and breakfast sandwich
products like the Big N’ ToastedTM and the Wake-Up Wrap®, we plan to expand Dunkin’ Donuts’ position in the
afternoon daypart (between 2:00 p.m. and 5:00 p.m.), which currently represents only approximately 12% of our
franchisee-reported sales. We believe that our extensive coffee- and beverage-based menu, coupled with new
“hearty snack” introductions, such as bakery sandwiches and tuna and chicken salad sandwiches, positions us for
further growth in this daypart. We believe this will require minimal additional capital investment by our
franchisees.
Continue to develop enhancements in restaurant operations. We will continue to maintain a highly
operations-focused culture to help our franchisees maximize the quality and consistency of their customers’
in-store experience, as well as to increase franchisee profitability. In support of this, we have enhanced initial and
ongoing restaurant manager and crew training programs and developed new in-store planning and tracking
technology tools to assist our franchisees. As evidence of our recent success in these areas, over 164,000
respondents, representing approximately 93% of all respondents, to our Guest Satisfaction Survey program in
December 2011 rated their overall experience as “Satisfied” or “Highly Satisfied.”
Continue Dunkin’ Donuts U.S. contiguous store expansion
We believe there is a significant opportunity to grow our points of distribution for Dunkin’ Donuts in the U.S.
given the strong potential outside of the Northeast region to increase our per-capita penetration to levels closer to
those in our core markets. Our development strategy resulted in 243 net new U.S. store openings in fiscal 2011.
In 2012, we expect our franchisees to open an additional 260 to 280 net new points of distribution in the U.S.,
principally in existing developed markets. We believe that our strategy of focusing on contiguous growth has the
potential to, over approximately the next 20 years, more than double our current U.S. footprint and reach a total
of 15,000 points of distribution in the U.S. The following table details our per-capita penetration levels in our
U.S. regions.
Region Population (in millions) Stores1Penetration
Core .................................................. 36.0 3,768 1:9,560
Eastern Established. ...................................... 53.8 2,227 1:24,160
Eastern Emerging ........................................ 88.7 891 1:99,600
West .................................................. 130.0 129 1:1,008,100
1As of December 31, 2011
Increase penetration in existing markets. In our traditional core markets of New England and New York, we
now have one Dunkin’ Donuts store for every 9,560 people. In the near term, we intend to focus our development
on other markets east of the Mississippi River, where we currently have only approximately one Dunkin’ Donuts
store for every 99,600 people. In certain established Eastern U.S. markets outside of our core markets, such as
Philadelphia, Chicago and South Florida, we have already achieved per-capita penetration of greater than one
Dunkin’ Donuts store for every 24,160 people.
Expand into new markets using a disciplined approach. We believe that the Western part of the U.S.
represents a significant growth opportunity for Dunkin’ Donuts. However, we believe that a disciplined approach
to development is the best one for our brand and franchisees. Specifically, in the near term, we intend to focus on
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