Dunkin' Donuts, an operational arm of
Dunkin Brands Group, Inc. (
DNKN
)
, recently penned a multi-unit store development deal with one of
its existing franchisees - Sizzling Donuts, LLC. As per the deal,
Dunkin' will unveil 16 new restaurants in Utah in the coming
years. The restaurants are due to be opened in Salt Lake City,
with the first restaurant slated to open in 2013 and the rest by
2018.
As a point of reference, the move is part of the company's goal
to double its presence in the U.S. over the next 20 years.
Dunkin' is focused on a strategy to seize growth opportunities
over its competitors by catering to the consumer needs of
individual markets. The company is currently expanding through
single and multi-unit opportunities.
The promising restaurant industry in Utah continues to drive the
U.S. economy. In 2012, total revenue from the restaurant sector
in Utah is projected to be around $3.3 billion. Salt Lake City,
the capital and most populous city in Utah, is known for its
varied shopping destinations. The peer companies of Dunkin
Brands such as
The Cheesecake Factory Incorporated (
CAKE
)
and
Starbucks Corp. (
SBUX
)
have been active in the city for years.
Sizzling Donuts, LLC is a subsidiary of Sizzling Platter, LLC,
which also franchises one of Dunkin's major peers -
Red Robin Gourmet Burgers, Inc. (
RRGB
)
. The company first joined hands with Sizzling Donuts, LLC
earlier in 2012 to open 11 new restaurants in Denver, Colorado,
and eight in El Paso, Texas, in the coming years. Management
believes that franchise opportunities still exist in the
Utah market, particularly in the cities of Northern Utah and
Nevada.
Earlier this month, Dunkin' inked multi-unit store development
deal with new franchisees Dean Kreher and Ted Pierce for three
restaurants in St. Louis, Missouri by 2015. Last month, Dunkin'
also joined hands with a franchise group to open two units in
Ohio and inked a deal with two other franchise groups to open
three units in Illinois. In addition, the company entered into
multi-unit store development agreements with several franchise
groups for 29 new units in Houston and Waco in Texas.
In order to be competitive and innovative, Dunkin' offers
services through various types of real estate formats including
free-standing restaurants, end caps, in-line sites, gas and
convenience, travel plazas, on-university campus and others.
Recently, Dunkin' opened its outlets at 10 college campuses
across the Northeast, Mid-Atlantic and Southern United States.
Dunkin' is the market leader in the coffee, donut, bagel and
muffin categories. The company operates more than 10,000
restaurants worldwide, including more than 7,000 restaurants in
36 states as well as the District of Columbia, and in more than
3,000 international locations in 33 countries.
Dunkin Brands is expected to release its third-quarter 2012
results on October 25. The Zacks Consensus Estimate for the third
quarter is currently pegged at 35 cents per share.
We currently have a long-term Neutral recommendation on the
stock. Also, it carries a short-term Zacks #3 Rank (Hold).
CHEESECAKE FACT (CAKE): Free Stock Analysis
Report
DUNKIN BRANDS (DNKN): Free Stock Analysis
Report
RED ROBIN GOURM (RRGB): Free Stock Analysis
Report
STARBUCKS CORP (SBUX): Free Stock Analysis
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