Forget just buying a doughnut, the whole Dunkin' Donut chain could be for sale.
The fast-food division of Allied Domecq could be sold off to help finance a takeover by Pernod Ricard and Fortune Brands Inc.
Allied Domecq directors met yesterday to approve the company's half-year results and also approved the takeover bid. Details are to be announced today, but the deal is worth a reported $14 billion.
Dunkin' Donuts officials declined to comment.
Pernod and Fortune are most interested in the distillers' alcolohic drinks, not its coffee, sources told Bloomberg News.
Allied recently combined and rebranded Dunkin' Donuts, Baskin-Robbins and Togo sandwich stores under the name Dunkin' Brands. The chains are run out of a new headquarters in Canton.
Allied Domecq bought Dunkin' Donuts when the company was floundering financially and at risk of a hostile takeover. It has become a solid performer and will likely attract several bidders, analysts said.
``The restaurant business is a favorable niche,'' said Carl Sibilski, a Morningstar analyst. ``All the indications are that people don't want to spend more time in their kitchens.''
The future of the Canton headquarters depends largely on the buyer.
It could be picked up by a private-equity investor who might eventually take it public. Or it might attract the interest of a company that already has a well-developed franchise system, such as Yum! Brands Inc., which owns the Pizza Hut, KFC and Long John Silver chains.
Because the company is largely a chain of franchises, a potential buyer might leave it and the headquarters intact, Sibilski said.
Dunkin' Donuts has moved to strengthen its market position in recent months with new stores and products such as seasonal coffee drinks and a steak sandwich.
Never did I want to have 14 Billion more than now. Owning Dunkin Donuts….brilliant!
As a former franchise owner, let me just say that hopefully whoever buys the chain knows about food and doing the right thing.
Allied Domecq pretty much forces franchises to buy thousands of dollars of equipment (if you argue it, you end up on their “hit list” and they are all over you until you pretty much sell).
And how many different “limited time” products can you have? The customers start to fall in love with a product and next they know it’s no longer available!!!!
I am considering buying a franchise for placement in a neighboring town that does not have a Dunkin Doughnut shop. The area has a reasoably good market but is not as high a volume as a city area. The population is probably 8 to 10 thousand but has a lot of through traffic and is at an intersection of two state highways. Does anyone know the minimum market volume needed to justify the startup and franchise expenses. I would appreciate any guidance that any current or former franchise owners might have on this.