BELLINGHAM, Mass. — The DD Independent Franchise Owners, which represents the largest association of Dunkin' Donuts franchise owners in the United States, is concerned that publicity surrounding lawsuits against franchisees is ultimately damaging the brand's health and reputation.
According to Nation's Restaurant News and the Boston Business Journal, Dunkin' Brands filed 350 lawsuits against franchisees between January 2000 and September 2002 compared to 12 similar suits filed by McDonald's in the same span. The same publications say Dunkin' Brands filed 157 lawsuits against franchisees between January 2006 and June 2007 compared to five by Subway.
A recent article on the franchise industry news Web site BlueMauMau.org cites internal documents and quotes by attendees to a 2000 American Bar Association meeting at which Dunkin' Brands' chief legal counsel in charge of loss prevention Stephen Horn spoke about the company's aggressive tactics to conduct surveillance on franchisees suspected of underreporting sales and then litigate them, including investigating their lifestyles.
In its response to the Blue MauMau article, Dunkin' Brands spokesman Stephen Caldeira said, the company's record is successful because of the care it takes in bringing cases that are investigated properly.
However, DDIFO chairman Kevin McCarthy said, "Targeting franchisees because of their lifestyle is particularly troublesome. No franchisee should be under suspicion or treated differently for aspiring to the American Dream."
McCarthy said DDIFO members advocate protecting the integrity of the brand. The DDIFO recognizes that, on occasion, a franchisee may engage in improper activity including possibly underreporting sales to the brand. But the DDIFO strongly opposes the use of intimidation tactics as part of any internal investigation.
"Our organization is concerned that Dunkin' Donuts will become as well known for its lawsuits as for its coffee and food products," McCarthy said. "In light of the competition our members face for loyal customers, we believe the company should be sensitive of its image related to these matters. More time helping franchisees and less time investigating them would be better for all stakeholders."
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