dunkin donuts franchising, & joint venture

Dunkin’ Brands Group, Inc. operates as a franchisor of quick service restaurants (QSRs) serving hot and cold coffee and baked goods, as well as hard serve ice cream. The company franchise restaurants under its Dunkin’ Donuts and Baskin-Robbins brands. It has approximately 17,400 points of distribution in 55 countries. The company operates its business in four segments, Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International and Baskin-Robbins U.S. As of December 29, 2012, there were 10,479 Dunkin' Donuts points of distribution, of which 7,306 were in the U.S. and 3,173 were international, and 6,980 Baskin-Robbins points of distribution, of which 4,517 were international and 2,463 were in the U.S. Brands Dunkin’ Donuts—U.S.: Dunkin’ Donuts is a U.S. QSR concept, which offers coffee, donut, bagel, muffin, and breakfast sandwich categories. The company has alternative points of distribution, such as full- or self-service kiosks in grocery stores, hospitals, airports, offices and other smaller-footprint properties. Baskin-Robbins—U.S.: Baskin-Robbins is the QSR chain in the U.S. for servings of hard-serve ice cream and develops and sells a range of frozen ice cream treats, such as cones, cakes, sundaes, and frozen beverages. International operations The company’s international business is primarily conducted via joint ventures and country or territorial license arrangements with master franchisees, who both operate and sub-franchise the brand within their licensed areas. The company’s international business is organized by brand and by country and/or region. Operations are primarily conducted through master franchise agreements with local operators. In addition, in Japan and South Korea the company has joint ventures with local companies for the Baskin-Robbins brand, and in the case of South Korea, for the Dunkin' Donuts brand as well. The company’s key markets for both brands are predominantly based in Asia and the Middle East. South Korea: In South Korea, the company conducts business through a 33.3% ownership stake in a combination Dunkin' Donuts brand/Baskin-Robbins brand joint venture, with South Korean shareholders owning the remaining 66.7% of the joint venture. The joint venture acts as the master franchisee for South Korea, sub-franchising the Dunkin' Donuts and Baskin-Robbins brands to franchisees. There are 1,020 Baskin-Robbins restaurants and 883 Dunkin' Donuts restaurants located in South Korea as of December 29, 2012. The joint venture also manufactures and supplies the franchisees operating restaurants located in South Korea with ice cream, donuts and coffee products. Japan: The company conducts business in Japan through a 43.3% ownership stake in a Baskin-Robbins brand joint venture. Its partner also owns a 43.3% interest in the joint venture, with the remaining 13.4% owned by public shareholders. There were 1,127 Baskin-Robbins restaurants located in Japan as of December 29, 2012, with the joint venture manufacturing and selling ice cream to franchisees operating restaurants in Japan and acting as master franchisee for the country. Middle East: The company conducts operations in the Middle East through master franchise arrangements. Supply Chain The company’s franchisees' suppliers include Rich Products Corp., Dean Foods Co., The Coca-Cola Company, and Green Mountain Coffee Roasters, Inc. In addition, its franchisees' primary coffee roasters are New England Tea & Coffee Co., Inc., Mother Parkers Tea & Coffee Inc., S&D Coffee, Inc., and Massimo Zanetti Beverage USA, Inc., and their primary donut mix suppliers are General Mills, Inc., Harlan Foods, and Aryzta. The company’s franchisees also purchase donut mix from CSM Bakery Products NA, Inc. and EFCO Products, Inc. The company and its franchisees depend on suppliers for ingredients, foodstuffs, beverages and disposable serving instruments, including Silver Pail Dairy, Ltd. The company has a long-term agreement with the National DCP, LLC (the NDCP) for the NDCP to provide the goods needed to operate a Dunkin' Donuts restaurant in the U.S. The NDCP also supplies some international markets. Competition The company’s competitors include 7-Eleven, Burger King, Cold Stone Creamery, Dairy Queen, McDonald's, Quick Trip, Starbucks, Subway, Tim Hortons, WaWa and Wendy's. Regulatory Matters The company and franchisees are also subject to the Fair Labor Standards Act and various other laws governing, such matters as minimum wage requirements, overtime and other working conditions and citizenship requirements. Its franchising activities are subject to the rules and regulations of the Federal Trade Commission and various state laws regulating the offer and sale of franchises.