Dunkin Donuts Case

CHANNELS
 OF
 DISTRIBUTION
 TM2
 2012
 
 

 

Student
 Esteban
 Castro
 

Dunkin’ Donuts
 
The case presents the relationship between Dunkin’ Donuts, thefranchisor, represented by its district sales (DSM) managers, and the franchisees. The problem faced by the DSM and Tommy is the distance between the objectives and standards fixed by the company and thecurrent situation of the Tommy’s franchise, that is driving its business away from the quality and consistency standards, selling other products ‘more profitable’ from him, damaging the brand conceptand image and the estimated sales due the location of the store. Tommy is looking for independency through the acquisition of the property, selling back the franchise to DD, to operate the businessunder another brand, or shifting his business from the operating the franchise to the rent the building to DD and the selling the franchise to other franchise. DD is pursuing to recover the control ofTommy’s store through a set of strategies, since even though the successive evaluations, he’s not changing his behaviour. These strategies goes from acquiring the franchise to operate the store bythemselves, to stop the franchise and permit to other franchisee buy the franchise to operate the store, but since Tommy bought the store, DD would have to continue having business with he. Since theintervention of the landlord over the DD business have no impact on the brand and the quality of the product sold in the store, the rent is regulated by a contract and DD can still obtain an initialfranchise fee from a franchise, maybe this option could be convenient, weighing the chance of litigation that could mean finish the contract today or waiting two years. The option of operate the store bythemselves is more expensive and creates a long-term close relationship with Tommy. In the case of Herman and Benito interest of opening a store in Harvard Street, since Herman is a high-performance...