Baskin Robbins 2012 Annual Report Download - page 31

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As we operate in a single industry, we are especially vulnerable to these factors to the extent that they affect our industry or our
products, or to a lesser extent our markets. In the past, securities class action litigation has often been initiated against
companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert
our management's attention and resources, and could also require us to make substantial payments to satisfy judgments or to
settle litigation.
Provisions in our charter documents and Delaware law may deter takeover efforts that you feel would be beneficial to
stockholder value.
Our certificate of incorporation and bylaws and Delaware law contain provisions which could make it harder for a third party to
acquire us, even if doing so might be beneficial to our stockholders. These provisions include a classified board of directors and
limitations on actions by our stockholders. In addition, our board of directors has the right to issue preferred stock without
stockholder approval that could be used to dilute a potential hostile acquirer. Our certificate of incorporation also imposes some
restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding
common stock other than the Sponsors. As a result, you may lose your ability to sell your stock for a price in excess of the
prevailing market price due to these protective measures and efforts by stockholders to change the direction or management of
the company may be unsuccessful.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our corporate headquarters, located in Canton, Massachusetts, houses substantially all of our executive management and
employees who provide our primary corporate support functions: legal, marketing, technology, human resources, public
relations, financial and research and development.
As of December 29, 2012, we owned 96 properties and leased 941 locations across the U.S. and Canada, a majority of which
we leased or subleased to franchisees. For fiscal year 2012, we generated 14.7%, or $96.8 million, of our total revenue from
rental fees from franchisees who lease or sublease their properties from us.
The remaining balance of restaurants selling our products are situated on real property owned by franchisees or leased directly
by franchisees from third-party landlords. All international restaurants (other than 10 located in Canada) are owned by licensees
and their sub-franchisees or leased by licensees and their sub-franchisees directly from a third-party landlord.
Nearly 100% of Dunkin’ Donuts and Baskin-Robbins restaurants are owned and operated by franchisees. We have construction
and site management personnel who oversee the construction of restaurants by outside contractors. The restaurants are built to
our specifications as to exterior style and interior decor. As of December 29, 2012, there were 10,479 Dunkin' Donuts
restaurants, operating in 38 states and the District of Columbia in the U.S. and 31 foreign countries. Baskin-Robbins restaurants
totaled 6,980, operating in 44 states and the District of Columbia in the U.S. and 45 foreign countries. All but 35 of the Dunkin’
Donuts and Baskin-Robbins restaurants were franchisee-operated. The following table illustrates restaurant locations by brand
and whether they are operated by the Company or our franchisees.
Franchisee-
owned restaurants
Company-
owned restaurants
Dunkin’ Donuts—US* 7,278 28
Dunkin’ Donuts—International 3,173 —
Total Dunkin’ Donuts* 10,451 28
Baskin-Robbins—US* 2,456 7
Baskin-Robbins—International 4,517 —
Total Baskin-Robbins* 6,973 7
Total US 9,734 35
Total International 7,690 —
* Combination restaurants, as more fully described below, count as both a Dunkin’ Donuts and a Baskin-Robbins
restaurant.