Dunkin' Brands Inc., the parent company of Dunkin' Donuts and Baskin-Robbins, and National DCP LLC, a Dunkin' Donuts franchisee-owned cooperative, has announced that they have signed a long-term, performance-based agreement for NDCP to be the exclusive supply chain provider for all Dunkin' Donuts restaurants in the continental United States.
The agreement, effective upon the merger of four regional franchisee-owned cooperatives into one national unit, will offer financial savings and service-improvement benefits to Dunkin' franchisees. Benefits include:
- A long-term agreement with Dunkin' Brands for the procurement and distribution of products;
- A more streamlined system that will provide significant future cost-efficiencies for the franchise community;
- A consolidated cooperative board structure, and;
- Greater consistency in supply and distribution service levels to all U.S. restaurants.
For Dunkin' Brands, the agreement allows the company to realize the benefits of a long-term, performance-based procurement and distribution agreement. Most importantly, the agreement supports the company's domestic expansion plans by providing franchisees in new markets with the same product costs as franchisees in the more highly built-out, established Dunkin' markets. Uniform product costs will be phased in over a three-year period beginning in 2012.
"This agreement is a momentous one for Dunkin' Brands and for existing, new and future Dunkin' Donuts franchisees," said Neil Moses, Dunkin' Brands chief financial officer. "In addition to securing our franchisees' role in the Dunkin' Donuts supply chain, it will result in significant cost savings, a higher level of service, and, in the near term, uniform product costs for franchisees across our domestic restaurant network. This is a huge step forward toward our goal of continuing to drive store-level profitability in newer markets and accelerating the expansion of Dunkin' Donuts across the U.S."
With almost 7,000 Dunkin' Donuts restaurants in the U.S. today, the company has said it has plans to more than double its current number of restaurants in the U.S. over the next 20 years.
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