Dunkin’ Donuts

Overview

With excellent real estate locations providing high visibility, easy accessibility, and plenty of customer traffic, Dunkin’ Donuts is always a strong opportunity from the net leasing investment perspective. Due to constant replenishment of food and beverage supply, inherent risks that may be found in other retail businesses are less of a concern. Dunk Donut’s lot sizes are usually smaller depending on property location, and are likewise able to be repurposed down the road. Lower pricing and lower rents tend to go hand in hand, and this creates desirable opportunities for investors. Often times rent bumps will be found in the leases, adding another beneficial aspect for lease consideration.

Lowest Cap Rate

4.00%

Lowest cap rate over past 24 months

Average Cap Rate

5.31%

12 mo avg with 5+ yr lease term

Average Property & Lease
Average Sale Price $1,100,000 - $1,750,000
Average NOI $60,000 - $125,000
Building SF 2,000
Lease Term 15-20 Years
Escalations 8% - 10% Every 5 Years
Stock Symbol CAPITALCOM:US500
CREDIT RATING
S&P

N/A
Moody's

N/A

Tenant Description

Holding the number one rank for client loyalty 9 years straight (source: Brand Keys), Dunkin’ Donuts is the premier breakfast and coffee chain servicing over three million international customers daily. From freshly baked foods, bagels, and fifty two styles of donuts, they also offer an excellent assortment of flavored coffee.

A man by the name of Bill Rosenberg founded the first Dunkin’ Donuts back in 1950, opening a small place in Quincy, MA. His mission was to provide superior quality, fresh donuts and coffee, with a modernized store appearance. He also originated the first franchise restaurant in 1955.

Dunkin’ Donuts is truly industry leading in their market sector. To this day, the company utilizes their unique founder’s coffee recipe at every location with over 11,300 properties in operation across the globe. In the United States alone, eight thousand Dunkin’ Donuts can be found in forty one states including Washington D.C. In fact, over 3200 worldwide restaurants currently service thirty six different countries. Dunkin’ Brands, Inc. is the parent company of both Dunkin’ Donuts and Baskin-Robbins.

PROS
  • Rental increases often found in leases
  • NNN or ground leasing usually accommodating to landlords
  • Ability to repurpose small lots
  • Typically desirable and highly visible locations
CONS
  • Creditworthiness non-investor graded
  • Leasing terms short length
  • Analysis required for franchised stores, credit and sales concerns
COMPANY QUICK STATS
Founded 1950
Headquarters Canton, Massachusetts
Number of Locations 12,871
Revenue $1.370 B
Company Website https://dunkindonuts.com
Key Principal David Hoffmann

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