Dunkin’s Run: A Love Story
Since opening the doors of its original shop 60 years ago, Dunkin’ Donuts has grown into an international juggernaut. Here’s why Bostonians don’t hold that against it.
IN THE LATE 1980s Dunkin’ invested in the Chili’s restaurant chain. The move proved disastrous for Dunkin’s bottom line, sending the stock price into a spiral and leaving the company weakened. In 1989 a corporate raider launched a hostile takeover bid. Rosenberg fought to maintain control, but ultimately agreed to a friendly sale to the English conglomerate Allied-Lyons. The company, which later became Allied Domecq, settled on a tricky strategy that involved dramatically changing Dunkin’ while at the same time hewing to its New England identity.
Tony Hales, former CEO, Allied Domecq: Dunkin’s heartland is in the Northeast, and we wanted the least amount of Britishness in it as possible. We also owned Baskin-Robbins, which was from California, but if you asked anyone in L.A. who owned the company, they’d have thought it was completely American. We were determined that Dunkin’ be the same. But the first objective we had when we bought it was to grow it.
Steve Siegel, former franchisee: In the old days you didn’t have Dunkin’s on every corner. They were suburban. You couldn’t have shops in the cities because you couldn’t get those size stores.
Leonard Blanchette, Dunkin’ customer, Newton: They actually used to have counter service. It was back in the day when guys could sit at the counter and smoke cigarettes and get away with it.
Schwarz: The hostesses would know most of the customers by name and what they wanted. They wouldn’t even have to say their order.
Zografos: We did only 20 percent of our business at the counter, yet the counter was 80 percent of the store’s space. So it was simple. We changed the layout and went to all paper products.
Schwarz: Coffee probably drinks a little better in a porcelain mug, but there was such theft and breakage.
Rosenberg: I was on radio talk shows getting calls from irate — I mean really irate — customers who didn’t want to give up their coffee cup.
Boch: There was a store in Norwood where we used to go and look in the window and watch them make the doughnuts. It was unbelievable. The smell! And then, I don’t know, they stopped making them in the store. It was totally sad.
Siegel: To open stores in much smaller spaces, we ended up building a plant in South Boston. It produces doughnuts for at least 40 stores. Dunkin’ now has a whole series of co-ops that produce doughnuts for a few hundred stores.
Schwarz: Because you didn’t need a doughnut man at the building, you could distribute to kiosks, to smaller stores, bus terminals, train stations, hospitals.
Siegel: We had one shop in Winthrop Square that was 64 square feet. We had one in the T tunnel in Filene’s Basement that was 120 square feet. I can still remember opening the store in Pi Alley on Washington Street around 1990 and just being overwhelmed — it became the first satellite store to do a million dollars in revenue. It was a revelation.