In a bid to expand its footprint in West Virginia, the
operational arm of
Dunkin' Brands Group
) - Dunkin' Donuts and Little General recently inked a multi-unit
store development deal.
Under the terms of the agreement, franchisee Little General
will introduce 3 new Dunkin' restaurants in West Virginia over
the next 5 years. The 1st Dunkin' unit is slated to open for
business in 2014.
Little General manages nearly 90 quick-service restaurants
(QSR) chains across West Virginia. Given its familiarity with
local food habits and a strong presence in the industry, Little
General is deemed a strategic fit for Dunkin' Donuts' expansion
plan in the region.
Since most of the areas of West Virginia including Charleston
and Huntington have very high growth potential, management is
focused on expanding in the region by forming new franchise
agreements. Dunkin' has not set any minimum limit on the number
of units and is going with both single and multi-unit
The National Restaurant Association projects that West
Virginia's emerging restaurant industry will generate total
revenues of nearly $2.2 billion in 2013. Other restaurant chains,
which are active in the region for years, include
Krispy Kreme Doughnuts, Inc.
Burger King Worldwide, Inc.
Recently, the Zacks Rank #2 (Buy) company, Dunkin' has penned
another multi-unit deal with its existing franchisee, Sizzling
Donuts, LLC. to introduce 7 new restaurants in Northern Utah over
the next 7 years.
These moves are consistent with the company's objective of
doubling its store count in the U.S. over the next 20 years
In 2013, Dunkin is expected to launch 300-360 Dunkin Donuts units
in the U.S., resulting in an annual new unit growth rate of 4.5%
Dunkin' completely relies on a franchised business model. We
believe that franchising provides a strong engine for earnings
per share growth and ROE expansion, as the company gets to reduce
its capital requirements.
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