Popular U.S. cafe chain Dunkin’ is expected to make a return to Canada, after shutting hundreds of locations before leaving eight years ago.
Its return this time will be different, says Peter Mammas, the president and CEO of restaurant holding company Foodtastic, which signed a master franchising agreement with Dunkin’ owner Inspire Brands to bring the cafe chain back to the North.
Mammas says this time the chain’s focus will be on Canadian ownership.
“I think the support and the Canadian ownership is going to help the brand here make a comeback,” says Mammas.
Dunkin’ confirmed its total exit from the Canadian market in September 2018.
The failure of the brand was cemented by a $16.4 million civil court judgment awarded to Quebec franchisees after they successfully sued Dunkin’ Brands Canada Ltd. for failing to adequately support and promote the brand against competitors like Tim Hortons.
Mammas says that situation was different because it was many years ago under different leadership.
Now, a Canadian company bought the rights to the chain and will do things differently.
How many new Dunkin’ stores?
Mammas expects the first Dunkin’ cafes to open in Canada later this year. A year from now, he says the company will likely be able to open a cafe a week, and about 50 cafes a year.
The Montreal-based restaurant holding company owns and manages over 1,200 locations across Canada and internationally. Its portfolio includes major chains like Second Cup, Milestones, Freshii, Pita Pit, and Quesada.
With that experience, Mammas says the company is well positioned to scale the brand.
“We have boots on the ground, so we’re going to have local support to support the franchisees,” he says.
He says the company will concentrate on opening stories in Quebec and Ontario for the first two years before opening cafes in the Maritimes and the West Coast.
Mammas says Foodtastic already successfully brought Jimmy John’s to Canada.
“So we kind of found that it would be a good fit to bring Dunkin’ back,” he says.
What’s new?
Mammas says the company plans to cater to a younger crowd while offering healthier food options.
He says Dunkin’ parent company Inspire Brands has already done a great job revitalizing the brand.
“It’s become a younger, cooler brand. It’s more in tune with the millennials and the Gen Zs,” he says.
“I think we’re going to resonate with the 13 to 35 crowd, and that’s what we’re going to go after.”
This means trying to target the “beverage drinkers” he says, which has been a key focus for the company after it rebranded in 2018 to become a beverage-led company focusing heavily on coffee and iced beverages.
It also simplified its name from Dunkin’ Donuts to Dunkin’.
Mammas says once Dunkin’ opens in Canada, the company will tweak a few of the American menu items.
“Being Foodtastic, we’re kind of privileged. We have over seven chefs and two drink experts, so we’re going to adapt what we need to the market,” says Mammas.
Should competition be concerned?
Popular coffee chains in Canada – including Tim Hortons, McDonald’s and Starbucks – may have reason to worry about Dunkin’s comeback, according to retail analyst Bruce Winder.
While Tim Hortons remains the market leader, Winder suggests that Dunkin’s return would introduce significant low-cost competition. He believes the brand’s approach will be more strategic this time.
“I think they’re going to take it slow. I think they’ve done more research,” he said, adding that the company will “nurture” the brand and find a unique flavour and menu for Canadians, instead of just bringing the same U.S. items north of the border.
