Dunkin’ Donuts knows this and has adopted a Chinese Army approach to expansion; what it lacks in sophistication and subtlety, it hopes to make up for in waves and waves of franchises. This explains the company’s decision to double its New York stores. It’s an approach that played a part in Dunkin’s thumping of the cachet-rich but cash-poor Krispy Kreme when the beloved southern glazed-doughnut guys ventured into New England. “We realized if we were to be successful in New York, you had to be able to get the same cup of coffee everywhere and it had to be right in front of you,” says Dawson. “We’d like to have one store for every 6,000 people in New York when we’re done.”
“Dunkin’ is going for the lowest common denominator,” says a coffee-industry expert. “And I mean that as a compliment.”
To accomplish that goal in New York, without forcing franchisers to pay, say, $10,000-a-month in rent for a full-size store, the company decided that its outlets wouldn’t require the spacious and attractive uniform specs of, say, a Starbucks. Dunkin’ Donuts’ stores come in many shapes and sizes, from the cramped quarters in Downtown Brooklyn to a rare Dunkin’ on the Upper East Side with Wi-Fi and outdoor seating. “We have an entire design team dedicated to fitting our Dunkin’ Donuts product into whatever space is available,” says Dawson. “We are flexible. If the space is too small to make doughnuts, we have them brought in from a central oven. We fit in.” All over New York you will find Dunkin’ stores squeezed into building nooks and crannies: a sort of retail spackling.
The brand’s real-estate flexibility presents the company with opportunities that a Starbucks can’t match. The four franchises I visited with the Dunkin’ shock team were all owned by Menexis, but each features a different layout: the Second and 40th location has outside seating, for example, and his store on Christopher Street is tucked neatly among the New York Fetish and Village Pleasures bondage stores. Unlike Starbucks, which tries to locate itself near other posh outposts like Pottery Barn and Barnes & Noble, Dunkin’ is simply looking for pedestrian and car traffic. Late in the day, the Group of Eight and I stopped at a new cubbyholed location under construction at First Avenue and 6th Street on the Lower East Side. The block is a retail wasteland, but Menexis saw nothing but opportunity. “We had to construct a new stairwell here to give us enough storage, and we’ll have to bring the doughnuts in from another location,” he said. He gazed dreamily at the surrounding mid-rises. “But there are thousands of people within blocks here. This is going to be great.” (Unlike 25 Dunkin’ Donuts owners in and out of the city who received $20 million in federal loans meant to help businesses hurt by 9/11, and took a PR hit for it just last week, Menexis has bankrolled all his own stores.) Dawson pointed out a nearby CVS pharmacy and an adjacent McDonald’s. “Those businesses get people out on the street—that’s all we need.”
Dunkin’s goal is for New Yorkers to see a location within every two-to-three-block radius. Its quest for ubiquity is already manifest in the East Village, where, in addition to Menexis’s new store, there are older Dunkin’ outposts at 14th and Third, 13th and First, and 11th and Second.
A little later, we headed up to midtown and a potential Dunkin’ store location I agreed not to disclose. At the top of the escalators at a subway station where six MTA lines meet, there’s a sliver of a future Dunkin’ Donuts. The new store would be on two levels, the upper floor sitting squarely across from the front doors of a 40-story skyscraper. “We’re hoping you get your first cup at your neighborhood Dunkin’,” Dawson said. “Then you hit the lower level on your way into work right off the subway and then hit the upper level for your coffee break. We want to be in a position to offer you your first, second, and third cup of coffee.”
There is a downside to Dunkin’s willingness to sell its coffee in less-than-ideal locations. The majority of the new Dunkin’ Donuts stores are “combos,” sharing counter space with, say, Baskin-Robbins (also owned by Pernod Ricard). The arrangement helps franchise owners make a few more bucks by providing customer flow in the coffee-dead lunchtime hours, and some franchisers say it provides customers with a one-stop-shopping option. Industry observers, on the other hand, say it mainly dilutes the Dunkin’ brand.
The Baskin-Dunkin’ combo isn’t the only bizarre pairing in New York. Many of the New York Dunkin’ Donuts cohabitate with Pizza Huts, Taco Bells, and the occasional Subway (there are also triple combos, like the Dunkin’-Baskin-Subway on Fifth Avenue and 31st Street). My personal favorite is the Dunkin’ Donuts–KFC combo near Grand Central Station. With its pairing of jelly doughnuts and a three-piece Extra Crispy Value Meal with slaw, the location is a gastric disaster waiting to happen.