In order to beef up its presence in Texas, coffee and doughnut
Dunkin' Brands Group Inc.
) - which owns Dunkin' Donuts and Baskin-Robbins brands -- inked
store development agreements with two new franchise groups,
Niknud LLC and Alamo Donuts LLC.
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Per the deal, Niknud LLC will build 11 new restaurants across
western Texas in Abilene, Amarillo, Lubbock and San Angelo by
2019, of which 8 will be traditional Dunkin' Donuts restaurants
and 3 Dunkin' Donuts/Baskin-Robbins combo units. The first unit
is expected to open next year.
Another franchise, Alamo Donuts LLC will develop 5 traditional
Dunkin' Donuts restaurants and 1 Dunkin' Donuts/Baskin-Robbins
combination unit in San Antonio, Texas by 2019. Alamo
Donuts is also expected to come up with its first outlet in 2014.
Dunkin' Donuts has been exploring the Texas market for quite some
time now and has a long-term plan of opening more than 100 units
in the region. Opportunities abound in still untapped markets
like Beaumont, Wichita Falls, Tyler and Midland/Odessa. There is
also scope for the growth of the Baskin-Robbins brand in Texas.
As per the National Restaurant Association, the restaurant
industry in Texas contributes considerably to the state's
revenues. According to the research organization, Texas
restaurants are expected to record $40.8 billion in sales in
2013. Other restaurant chains active in the state for years
Krispy Kreme Doughnuts, Inc.
As a point of reference, this unit expansion is part of the
company's goal to double its portfolio in the U.S. over the next
20 years. It intends to open 330-360 restaurants in the U.S. in
2013, with the majority of them scheduled to come up in Texas.
Canton, MA-based Dunkin' Brands boasts an attractive growth story
driven by its expansion plan, marketing strategy and menu
innovation. Currently, the annual development rate of the
doughnut giant is 5%. Further, the company intends to open nearly
15,000 restaurants under the Dunkin' Donuts brand in the U.S.
within the next three to five years.
Dunkin' currently has a Zacks Rank #3 (Hold). One player in the
restaurant industry, which looks attractive at current levels is
Burger King Worldwide Inc.
) with a Zacks Rank #2 (Buy).