Twenty years after it left the Southern California market, Dunkin’ Donuts announced Wednesday that it's coming back with a wave of new outlets.
The Massachusetts-based chain said it is looking for franchisees to open about 170 stores in LA, Riverside, San Diego, San Bernardino, Ventura and Orange counties in 2015.
Dunkin' Donuts already has a beachhead in Southern California: It's opened an outlet at the Camp Pendleton Marine Corps Base.
Dunkin’ Donuts once had about 15 California stores, but shuttered those locations in the 1990s, said Grant Benson, vice president of franchising and business development for Dunkin’ Brands, the parent company to Dunkin’ Donuts.
Back with a different attitude
Benson said this time, Dunkin' Donuts is coming to Southern California with a different attitude than it had 20 years ago.
“What we learned from that experience was when you go into that market with the size and scope and the opportunity that California provides, you really got to go in with a mindset and a commitment to win and become material in the market in a really short period of time,” Benson said.
He said Dunkin’ Donuts’ business model has evolved in the last four of five years, with a stronger distribution system, greater marketing reach and improvement in the way franchisees and retail sites are selected.
“There (are) a lot of reasons why we know we’ll be successful this time,” said Benson, adding he believes California could support more than 1,000 Dunkin’ Donuts locations in the future.
The California expansion is part of the company’s plans to increase its national footprint.
This year, the chain plans to open 330 to 360 new store in the United States. Dunkin’ Donuts has more than 10,000 stores worldwide.
Edge on the competition
Ira Kalb, who teaches marketing at USC’s Marshall School of Business, said he thinks Dunkin’s expansion in California is a good idea. He said the chain has separated itself from its competitors Krispy Kreme Doughnuts and Winchell’s Donut House.
Kalb says customers see Dunkin’ Donuts as higher quality than Winchell’s and while Krispy Kreme has received negative press based on consumer worries about obesity, that hasn’t hurt Dunkin’ Donuts’ image.
“They should be concerned because they are going to have some formidable competition," said Kalb. "Dunkin’ is doing national advertising and their branding has been quite good over the last few years."