A recent announcement from Baskin-Robbins announces that they opened four franchised stores this last year, the first since 2006. With such tiny numbers, some experts are predicting the end of the brand. But while four stores might normally spell the end of a franchise, especially since franchisors depend on growth for survival, the parent company, Dunkin’ Brands, sees a different picture. Why?
Baskin-Robbins is a tremendously successful franchise outside of the United States, especially in Asian countries.They’re rolling out franchise opportunities in the UK as well, and stirring up excitement there.
Dunkin’ Brands, which owns both Baskin-Robbins and Dunkin’ Donuts, is looking to change how they handle the ice cream brand. CEO Nigel Travis said that past leadership didn’t support Baskin-Robbins sufficiently and that’s part of why the brand suffered in the US. With Travis’ contract extended, we can expect this to change in the coming years. His contract would previously end at the end of 2016 but has been extended by two years to 2018, which is a good sign of great results under his leadership.
The recent movement in Baskin-Robbins stores, though the number of stores is tiny, suggests a desire to bring the brand back to the United States after learning lessons in the international market. Abroad, Baskin-Robbins’ locations have undergone remodels and they’ve expanded the offerings of flavors and products to resonate better with customer desires. Dunkin’ Brands is also bringing the ice cream flavors to select grocery stores across the country, focusing on Ralph’s in California and Shaw’s in New England as well as some smaller grocery chains throughout the country.
But will that change anything for stores and future franchises in the United States? Other similar ice cream stores, like Cold Stone Creamery, have seen declining sales and are shedding stores because of the current purchasing trends. Customers have options from frozen yogurt to gelato to paletas when they want a frozen treat, and health-trend–conscious consumers may avoid both dairy products and sugar.
With Baskin-Robbins’ ice cream in grocery stores, the franchise locations will also have to compete with grocery-store versions of their own products as well as the rest of the grocery store brands. About two thirds of all U.S. ice cream sales take place in grocery stores. Other ice cream makers, like Friendly’s and Brigham’s, have tried this tactic unsuccessfully in the past.
Dunkin’ Brands has stirred up excitement with a new combined Dunkin’ Donuts/Baskin-Robbins shop in San Diego, though. The parent company has entered into some high-profile sports-related marketing plans, and their combined total of more than 18,000 locations worldwide may just put them into a different category from their competitors.
Only time will tell if Baskin-Robbins is on the way out or if the brand can reinvent itself and become a top brand again. In the meantime if you’re considering an ice cream franchise be sure that you look into the entire industry and not just at one specific brand.The same economic trends and forces that affected Baskin-Robbins may be poised to affect competitors.