Dunkin' Brands Group, Inc. (DNKN) is concentrating on domestic expansion to boost sales. Recently the company debuted in California with the launch of its Dunkin' Donuts full-expression restaurants in Modesto and Santa Monica. The restaurants, offering comfortable seating areas and free Wi-Fi, will feature beverages, sandwiches and baked goods on the menu.
The Modesto-based restaurant is owned and operated by Sizzling Donuts, LLC – which operates Dunkin' Donuts restaurants throughout Western U.S. The franchisee has also signed a multi-unit store development agreement to open 46 stores in the Sacramento region.
The Santa Monica restaurant is owned and operated by existing Dunkin' Donuts franchisee and business partner. They intend to develop 10 restaurants throughout Los Angeles County.
The opening of Dunkin' full-service restaurants in the Modesto and Santa Monica regions is part of its goal to open 200 restaurants throughout California over the upcoming years. In addition, the chain plans to open restaurants in Whittier, Downey and Long Beach in the upcoming months. The company intends to have almost 1,000 restaurants throughout the state over the long term.
Dunkin’ Brands’ decided to revisit California in 2013 after it left the state in 2002 due to dwindling sales. With plans to open around 330 to 360 stores in the United States this year, the brand is looking to significantly expand its presence to high-demand markets of California. Additionally, the brand seeks to capitalize on the booming breakfast trend within the fast food industry. We believe Dunkin’s affordable pricing will apposition it better than Starbucks Corporation (SBUX) – which has an extensive presence in California – and McDonald's Corp. (MCD).
Dunkin’ currently has a Zacks Rank #4 (Sell). A better-ranked stock in the same sector is Chipotle Mexican Grill, Inc. (CMG), sporting a Zacks Rank #1 (Strong Buy).
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