Dunkin’ Donuts Inc. , a unit of the closely held, Canton, Massachusetts-based company that also owns the Baskin-Robbins ice-cream chain, signed a franchise agreement with Jubilant, according to a statement distributed by PR Newswire today. The first Dunkin’ Donuts shop will open early next year, it said.
Jubilant plans to set up as many as 30 Dunkin’ Donuts restaurants in the next 3 years, Chief Executive Officer Ajay Kaul told reporters in New Delhi. Jubilant, whose market value has more than doubled in the past year, is also the Indian franchisee of Domino’s Pizza Inc.
Dunkin’ Donuts will compete with Lavazza SpA’s Barista Coffee Co., and Starbucks Corp., which entered an agreement with Tata Coffee Ltd. last month and announced that it will explore opening outlets in India. Coffee consumption in India has more than doubled to 100,000 metric tons in the past ten years, boosted by the expansion of companies including closely held Cafe Coffee Day.
Cafe Coffee Day is India’s biggest coffee-shop chain by stores with more than 1,000 locations, according to Harish Bijoor of Harish Bijoor Consults Inc., who was a vice president of marketing at Tata Coffee. Coffee-shop chains in India have opened a total of more than 1,200 restaurants in the past 10 years, said Bijoor.
Specific to India
Jubilant will introduce Dunkin’ Donuts’ coffee and bakery products as well as food developed specifically for the Indian market, the statement said.
“India represents a tremendous growth opportunity for Dunkin’ Donuts,” said Nigel Travis, chief executive officer of Dunkin’ Brands, which is owned by Bain Capital LLC, The Carlyle Group and Thomas H. Lee Partners LP. “India is one of the fastest growing economies of the world and has a very fast growing middle class.”
Urban Indians eat out about six times a month, compared with 2.7 times a month in 2003, according to the Federation of Indian Chambers of Commerce and Industries’ Food Franchising Report 2009. Rising incomes and consumer spending may make India the fifth-largest consumer market by 2025, a January report by Deloitte Touche Tohmatsu Ltd. said.
Jubilant rose 3.6 percent, the most in almost two weeks, to 528.85 rupees at the 3:30 p.m. close in Mumbai today. The benchmark Sensitive Index of Bombay Stock Exchange declined 3 percent.
“If Jubilant is able to successfully do even 30 stores over the next three years, it would establish their credibility in terms of being able to execute such projects in India,” said Kalpesh Makwana, a Mumbai-based analyst with Quant Broking Pvt. “Whenever new restaurant operators want to enter, they will give a higher weightage to Jubilant as a partner.”
The planned expansion is Dunkin’ Donuts’ “largest international store development commitment,” it said in the statement. Dunkin’ Brands’ Baskin-Robbins opened its 400th branch in India last year and it has 6,400 outlets worldwide, according to the statement.
Dunkin’ Donuts had 574 net global restaurant openings last year, bringing the total to about 9,700. The company has opened more than 70 stores in China since 2007, according to the statement. Its international stores may reach 3,000 this month, the statement said.
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