To support such initiatives as the backpack program

  • No School
  • AA 1
  • 96
  • 100% (2) 2 out of 2 people found this document helpful

This preview shows page 8 - 12 out of 96 pages.

to support such initiatives as the BackPack Program to provide hungry children with nutritious and easy-to-prepare food to take home on weekends, and to support the School Pantry Program, which helps alleviate child hunger in America. Franchise Fees In the United States, Dunkin’ Donuts franchisees pay a royalty of about 5.4 percent of gross sales to the company, and Baskin-Robbins franchisees pay about 5.0 percent. However, outside the United States, Dunkin’ Donut franchisees, on average, pay a
Image of page 8
royalty rate of only 2.1 percent. For the Baskin-Robbins brand outside the United States, Dunkin’ does not generally receive royalty payments from franchisees; instead, it earns revenue from such franchisees by selling ice cream products to them, so the royalty rate in this segment is about 0.7 percent. Dunkin’ franchisees in the United States also pay advertising fees of about 5 percent of gross sales. Segments Dunkin’ Brands operates in four segments: (1) Dunkin’ Donuts U.S., (2) Dunkin’ Donuts International, (3) Baskin-Robbins International, and (4) Baskin-Robbins U.S. The two Dunkin’ Donuts U.S. and International segments generated 2014 revenues of about $568 million, or about 76 percent of the firm’s total segment revenues, of which $549 million was in the U.S. segment and $20 million was in the international segment. As calendar 2015 began, there were 11,275 Dunkin’ Donuts stores—8,047 in the United States and 3,228 in 32 countries outside the United States. The two Baskin-Robbins segments generated 2014 annual revenues of about $122 million in the international segment and about $43 million in the U.S. segment. As calendar 2015 began, there were 7,546 Baskin-Robbins stores—5,068 were international in 46 countries outside the United States, and 2,478 were in the United States. In Q4 of 2015, Dunkin’ Brands’ franchisees and licensees opened another 260 restaurants worldwide, including 141 Dunkin’ Donuts U.S. locations, 75 Baskin- Robbins International outlets, 46 Dunkin’ Donuts International units. Also, two Baskin- Robbins U.S. locations were closed. Additionally, Dunkin’ Donuts U.S. franchisees
Image of page 9
remodeled 172 restaurants during the quarter. Exhibit 2 provides a breakdown of Dunkin’ Brands’ restaurants. Exhibit 2 Dunkin’ Brands’ Number of Restaurants at Year-End 2014 2013 2012 Dunkin’ Donuts U.S. 8,047 7,677 7,306 Dunkin’ Donuts International 3,228 3,181 3,043 Baskin-Robbins U.S. 2,478 2,467 2,463 Baskin-Robbins International 5,068 4,833 4,556
Image of page 10
2014 2013 2012 Total 18,821 18,158 17,368 Since Dunkin’ Brands is nearly 100 percent franchised, revenues derived from selling both ice cream and donuts to consumers is reported on the franchisees’ financial statements, rather than on Dunkin’s financial statements. Thus, the company generates revenue from five primary sources: royalty income and fees, rental income from restaurant properties leased, sales of ice cream products to franchisee, retail store revenue at company-owned stores, and licensing of the Dunkin’ Donuts brand for products sold in nonfranchised outlets (such as retail packaged coffee).
Image of page 11
Image of page 12

You've reached the end of your free preview.

Want to read all 96 pages?

  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes