Dunkin’ Donuts, a well known brand of Dunkin' Brands Group, Inc. (DNKN), recently signed a multi-store development agreement with franchisee group, Star Restaurant Group, for opening new nine restaurants in Birmingham, Alabama. One restaurant will debut in 2013 and rest will come up by 2017.
As per the agreement, both the parties will join hands to manage and control the company's daily operations in each restaurant. Star Restaurant Group possesses the required experience as it already handles multi-unit, gas and convenience operations in two states, including quick-service restaurant components.
Dunkin’ Donuts is focused on its strategy to seize growth opportunities and cater to consumer needs of individual markets. Thus, the company continues to expand through development of single and multi-unit opportunities. In order to be competitive and innovative, Dunkin’ Donuts offers services through various types of real estate format concepts including free-standing restaurants, end caps, in-line sites, gas and convenience, travel plazas, universities and others. As a matter of fact, the company has franchisee opportunities available in other cities of Alabama too like Huntsville and Montgomery.
Management expects the new franchisees to help establish strong customer relationship in the Birmingham area through efficient management and restaurant control.
Dunkin' Donuts is the favorite all-day, everyday joint for coffee and baked goods in US. It is a market leader in the hot flavored coffee, regular/decaf coffee, iced coffee, donut, bagel and muffin categories. As of now, Dunkin' Donuts has more than 10,000 restaurants worldwide, which includes more than 7,000 restaurants in 36 United States as well as the District of Columbia and more than 3,000 international restaurants in 33 countries.
Canton, Massachusetts-based, Dunkin’ Brands Group, together with its subsidiaries, owns, operates, and franchises quick service restaurants worldwide. It operates under two brands- Dunkin’ Donuts and Baskin-Robbins. As of December 31, 2011, Dunkin' Brands’ had nearly 100 percent franchised business model, which includes more than 16,700 Dunkin' Donuts and Baskin-Robbins restaurants.
Dunkin’ Brands Group recently reported first quarter 2012 earnings of 25 cents per share beating the Zacks Consensus Estimate by 2 cents. The company expects earnings per share for 2012 in the range of $1.21- $1.24, which represents a 29-32% year-over-year increase.
Dunkin’ Brands Group, which competes with the likes of Starbucks Corporation (SBUX) and Yum! Brands, Inc. (YUM), retains a Zacks #3 Rank which translates into a short-term Hold rating. We are maintaining our long-term Neutral recommendation on the stock.
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