Dunkin’ Brands Chairman and CEO Nigel Travis was disappointed by the company’s third-quarter fiscal performance, but is excited about the growth opportunities that lie ahead involving customer engagement and brand loyalty.
“I want to reiterate that we have a great business model with significant long-term growth opportunities,” Travis said during the Oct. 22 conference call, according to Seeking Alpha. “We’re facing some short-term, mid-term challenges, but we’re facing up to those. We have great discussions with our franchisees, so we are addressing them head on while making sure we don’t take short-term decisions at the risk of the long-term. We’re very focused on the long term of this business and we feel great about it and, in fact, I am energized by the challenge.”
Travis said company officials are working closely with franchisees to regain transaction momentum through great products, exceptional guest service, and innovative marketing.
“Our asset-light franchise business model is resilient to fluctuations in comp store sales growth and, as a result, we remain on track to deliver our full-year targets,” Travis said.
Travis discussed growth targets in the next five years: 2% to 4% U.S. comp store sales growth; 4% to 6% growth rate for net restaurant development; mid- to high single-digit revenue growth; 10% plus operating income growth; and up to 15% adjusted earnings per share growth.
“We believe that we can grow to a more than 19,000 restaurants globally today between the two brands to more than 30,000 restaurants in the long term,” Travis said. “There are very few companies or brands out there that have that type of opportunity. We are a growth company and the financial engine for Dunkin’ Brands is restaurant expansion, led by Dunkin’ Donuts U.S. And as a nearly 100% franchise business, that is why, we have two main priorities: Great franchise relationships and terrific unit economics.”
Although he declined to offer specifics, Travis said he was “very pleased” with the ongoing success of the DD Perks loyalty program.
“We will continue to grow our digital and mobile capabilities,” he added. “As we recently announced, we’re expanding the mobile ordering test and we’ll begin the test delivery. Bringing all this together, we and our franchisees are very focused on quickly getting back to positive transaction growth, and this is a challenge we are all motivated by. Nothing is more important than getting the hearts and minds of our franchisees right behind us and we will.”