With Starbucks retrenching and Krispy Kreme slumping, Dunkin’ sees an opportunity to pounce, partly because unlike Starbucks, its growth isn’t tied to corporate earnings. Instead, most of the costs associated with opening a new store are shouldered by franchisees.
In Dallas, one of those involved with the franchising of Dunkin’ Donuts is Barry Zale, whose family founded Zale Corp., the diamond and jewelry store. Zale’s father, Donald, was on a business trip in Boston when he saw something in the paper about Dunkin’s plans for expansion. He threw the paper across the desk to one of his partners and told him to look into it.
“We had done well selling Blockbuster stores, mostly in the Washington, D.C., area, and then we got into tanning salons. We were looking for something new, and this seemed like a great opportunity,” says the 52-year-old Barry Zale. “You go to Chicago, the eastern seaboard, people don’t think of getting their coffee anywhere else. We think the same thing will happen in Texas.”
Zale’s Texas Donuts LP, one of three franchisees in the area, plans to build 70 units in Dallas-Fort Worth by 2015. They will spend about $500,000 on each store, with expected gross revenues of about $1 million a year per store.