The fast food giant Dunkin’ Donuts, which is part of Dunkin’ Brands Group, Inc. DNKN recently opened its 12000th restaurant worldwide at Riverside, CA. The outlet will be located at La Sierra Avenue in the Greater Los Angeles area.
The new location is in agreement with franchisee Parag Patel, whose family has been part of the Dunkin’ Donuts franchisee since 1989. Patel also plans to continue his West Coast expansion efforts by adding 20 more outlets in the Riverside and Orange County locations in the coming years.
This is in sync with the company’s steady and strategic westward expansion policy whereby it has opened 30 new restaurants in California and plans to open 300 more in the State over the next few years.
Dunkin’ group is experiencing challenges in the international markets due to sluggish macroeconomic growth in emerging economies. Hence, it plans to continue its full-fledged franchisee model for expansion in both domestic and global markets. The franchisee model facilitates earnings growth and return on equity expansion due to lesser capital requirements.
However, a soft consumer spending environment in the restaurant sector of the U.S. and a shift in ice-cream consumption patterns there, along with intense competition from similar food & beverages companies like Starbucks Corporation SBUX, Yum! Brands, Inc. YUM and McDonald’s Corporation MCD might continue to put pressure on revenues.
Nevertheless, the company’s strong brand recognition, continuous innovation in terms of products, strong digital initiatives and other sales boosting techniques, are expected to positively support earnings and revenue growth.
DUNKIN BRANDS Price
Dunkin’ Brands Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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