Dunkin’ Sets New Supply Chain Deal (DNKN, SBUX, MCD, YUM)
Dunkin’ Brands Inc. (NASDAQ: DNKN) has signed a new deal with its subsidiary National DCP LLC, under which National will be the exclusive supply chain provider for Dunkin’s more than 7,000 US locations. Dunkin’ trails Starbucks Corp. (NASDAQ: SBUX), McDonalds’s…
Dunkin’ Brands Inc. (NASDAQ: DNKN) has signed a new deal with its subsidiary National DCP LLC, under which National will be the exclusive supply chain provider for Dunkin’s more than 7,000 US locations. Dunkin’ trails Starbucks Corp. (NASDAQ: SBUX), McDonalds’s Corp. (NYSE: MCD), and Yum! Brands Inc. (NYSE: YUM) in total US stores, but plans to nearly triple that number in 20 years.
The agreement announced today makes National, which is a co-operative owned by Dunkin’s franchisees, the sole supplier of goods to all Dunkin’s US stores. Besides rationalizing Dunkin’s distribution:
[T]he agreement supports the company’s domestic expansion plans by providing franchisees in new markets with the same product costs as franchisees in the more highly built-out, established Dunkin’ markets. Uniform product costs will be phased in over a three-year period beginning in 2012.
That’s a big deal for Dunkin’s franchise owners and should help the company expand into new territory.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
