Baskin Robbins 2011 Annual Report Download - page 22

Other franchise related fees
We lease and sublease properties to franchisees in the U.S. and in Canada, generating net rental fees when the
cost charged to the franchisee exceeds the cost charged to us. For fiscal year 2011, we generated 14.7%, or $92.1
million, of our total revenue from rental fees from franchisees and incurred related occupancy expenses of $51.9
million.
We also receive a license fee from Dean Foods Co. (“Dean Foods”) as part of an arrangement whereby Dean
Foods manufactures and distributes ice cream products to Baskin-Robbins franchisees in the U.S. In connection
with our Dean Foods Alliance Agreement, Dunkin’ Brands receives a license fee based on total gallons of ice
cream sold. For fiscal year 2011, we generated 1.2%, or $7.4 million, of our total revenue from license fees from
Dean Foods.
We manufacture and supply ice cream products to a majority of the Baskin-Robbins franchisees who operate
Baskin-Robbins restaurants located in certain foreign countries and receive revenue associated with those sales.
For fiscal year 2011, we generated 15.9%, or $100.1 million, of our total revenue from the sale of ice cream and
ice cream products to franchisees in certain foreign countries.
Other revenue sources include income from restaurants owned by us, online training fees, licensing fees earned
from the sale of retail packaged coffee, net refranchising gains and other one-time fees such as transfer fees and
late fees. For fiscal year 2011, we generated 4.8%, or $30.1 million, of our total revenue from these other
sources.
International operations
Our international business is organized by brand and by country and/or region. Operations are primarily
conducted through master franchise agreements with local operators. In certain instances, the master franchisee
may have the right to sub-franchise. In addition, in Japan and South Korea we have joint ventures with local
companies for the Baskin-Robbins brand, and in the case of South Korea, for the Dunkin’ Donuts brand as well.
By teaming with local operators, we believe we are better able to adapt our concepts to local business practices
and consumer preferences. We have had an international presence since 1961 when the first Dunkin’ Donuts
restaurant opened in Canada. As of December 31, 2011, there were 4,254 Baskin-Robbins restaurants in 48
countries outside the U.S. and 3,068 Dunkin’ Donuts restaurants in 31 countries outside the U.S. Baskin-Robbins
points of distribution represent the majority of our international presence and accounted for 67% of international
franchisee-reported sales and 88% of our international revenues for fiscal year 2011.
Our key markets for both brands are predominantly based in Asia and the Middle East, which accounted for
approximately 72.4% and 14.5%, respectively, of international franchisee-reported sales for fiscal year 2011. For
fiscal year 2011, $1.9 billion of total franchisee-reported sales were generated by restaurants located in
international markets, which represented 23.1% of total franchisee-reported sales, with the Dunkin’ Donuts brand
accounting for $636 million and the Baskin-Robbins brand accounting for $1.3 billion of our international
franchisee-reported sales. For the same period, our revenues from international operations totaled $123.8 million,
with the Baskin-Robbins brand generating approximately 88% of such revenues.
Overview of key markets
As of December 31, 2011, the top foreign countries and regions in which the Dunkin’ Donuts brand and/or the
Baskin-Robbins brand operated were:
Country Type Franchised brand(s) Number of restaurants
South Korea Joint Venture Dunkin’ Donuts 857
Baskin-Robbins 983
Japan Joint Venture Baskin-Robbins 1,087
Middle East Master Franchise Agreements Dunkin’ Donuts 229
Baskin-Robbins 581
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