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The Boston Globe

Globe 100

No. 17 overall | No. 3 consumer company

Dunkin’ is back after 23 years

Muyi Wu works at the original Dunkin’ Donuts store in Quincy.

Jonathan Wiggs/Globe Staff

Muyi Wu works at the original Dunkin’ Donuts store in Quincy.

Dunkin’ Brands Group is the answer to the ultimate Globe 100 trivia question.

That question: What company appeared on the inaugural Globe 100 and in the latest rankings but on none of the annual lists published during the 23 years in between?

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The long absence had nothing to do with poor business performance. Dunkin’ was acquired by food conglomerate Domecq PLC in 1989, the year the first Globe 100 appeared, and ceased to be an independent public company that qualified for future rankings. Dunkin’ was purchased by private equity investors in 2006 and then went public again in 2011.

The Canton company became eligible for Globe 100 consideration again this year and claimed the number 17 position on the 2013 rankings.

It earned that spot with a strong financial performance at its Dunkin’ Donuts and Baskin-Robbins businesses. Dunkin’ Brands reported systemwide sales of $8.77 billion in 2012, up 5.2 percent from the previous year. Net income more than tripled to $108.3 million. Comparable store sales also grew 4.2 percent from 2011.

Jonathan Wiggs/Globe Staff

Dunkin' Donuts in Quincy.

Though Dunkin’s network of restaurants is spread around the world, the company’s connection to Massachusetts remains especially strong. Since the company’s first store opened in Quincy in 1950, the network has expanded to 1,143 restaurants in the state, making up more than 15 percent of the total number of Dunkin’ locations in the United States.

In fact, chief executive Nigel Travis compares the love Bostonians have for Dunkin’s Coolattas and Munchkins to the city’s affection for its sports teams. “Most Bostonians grow up on Dunkin’,” Travis said. “It percolates through their whole life.”

One recent example: Authorities asked residents in Greater Boston to stay inside and lock their doors on April 19 while police embarked on a massive manhunt for the second Boston Marathon bombing suspect. But law enforcement officials asked a few Dunkin’ Donuts restaurants to remain open to serve officers working around the clock in what otherwise appeared to be a ghost town.

Despite Dunkin’s cult presence locally, it hasn’t been able to attract the same following on the West Coast. Dunkin’ Donuts has shuttered all but one of the 17 stores it once operated in California.

The company’s corporate office had placed too much importance on selling franchises without ensuring their success in years past, said Travis, who became the chief executive of Dunkin’ Brands in 2009.

“We were more about selling franchises in those days, and now we’re more about operating franchises,” he said. “We’ve improved our training, approach to store owning, and operational measurements. We’re recruiting better-qualified operators.”

Travis recently announced intentions to move back into Southern California and open the first stores in 2015, with plans for at least 150 by 2020. Eventually, he hopes to have more than 1,000 stores across the state.

Dennis Lombardi, a food service industry consultant at WD Partners in Ohio, said those expansion plans into areas unfamiliar with the Dunkin’ brand are important but will pose challenges.

Employee Emily Montgomery at the Quincy Dunkin' Donuts.

Jonathan Wiggs/Globe Staff

Employee Emily Montgomery at the Quincy Dunkin' Donuts.

New company stores will need strong coffee sales to flourish, he said. Another important factor is the Dunkin’s ability to attract customers unfamiliar with the brand and others who haven’t been in a store in years.

“To grow to the potential of a truly national brand as opposed to a super multi-regional brand you need to be successful on the Pacific Coast,” Lombardi said.

In fact, Travis has big plans to expand Dunkin’ Donuts across the country. He aims to roughly double the number of Dunkin’ stores to 15,000 within the next 15 years.

At that pace, Dunkin’ can count on a regular place on the Globe 100 for years to come.

Taryn Luna be reached at taryn.luna@globe.com.
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