Dunkin’ (Donuts) Cracking Down On Undocumented Workers?

According to a recent report from not-for-profit food industry news source The New Food Economy, Dunkin’—the coffee and donut-centric chain of restaurants that once went by the name Dunkin’ Donuts—has been cracking down on restaurants within its system that have hired undocumented workers.

According to The New Food Economy’s reporting, the brand has tried to close nearly 30 of its East Coast restaurants since September of last year, and in at least three instances, Dunkin’ found franchisees’ workers hadn’t had their employment status verified. The brand then took the storeowners to court to terminate the franchise contract for the stores in question.

In response to the report, Dunkin’ released the following statement: “Our franchise agreement requires franchisees to follow all laws, including those pertaining to the hiring of workers legally allowed to work in the United States. There have been isolated instances of non-compliance which have resulted in two cases being recently filed as well as the case that was filed over nine months ago.”

Dunkin’ has a history of strictly enforcing the rules laid out in its franchise agreements. Between January 1, 2006, and June 30, 2007, Dunkin’ was the plaintiff in 101 federal lawsuits, mostly against franchisees, according to a report by Franchise Times. In that same period, the Times notes, Subway—the largest franchise on the planet in terms of location count—brought suits against only five of its franchisees.

This week franchisees of fast food powerhouse McDonald’s lamented the fact that they do not have ammunition against a poultry-centric competitor.

According to a report in the Chicago Tribune, McDonald’s National Owners Association, an independent franchisees group, sent a letter to its members stating the brand does not have a chicken sandwich offering that can compete with Chick Fil A. McDonalds does have a grilled chicken sandwich on its menu, a Classic Chicken Sandwich—which contains a fried piece of chicken—as well as chicken nuggets.    

The Crunch gym and fitness franchise has been on the scene for about 30 years and in that time has had three different owners. Now a fourth group has taken over, and that cohort includes company management.

In an announcement last week, Crunch Fitness said ownership of the brand had passed from private equity firm Angelo, Gordon & Co. to a group of buyers that includes TPG Growth—a growth equity and middle-market buyout arm of San Francisco-based private equity firm TPG Capital, and Crunch CEO Jim Rowley and fellow 24-hour Fitness cofounder MarkMastrov, who together control investment group Evolution Fitness Company. Rowley and Mastrov had previously owned the brand with Angelo, Gordon & Co. No financial data on the transaction was disclosed.

According to a report from Club Industry, other Crunch management who joined the deal as individual investors include Keith Worts, CEO of Crunch Signature; Crunch Franchise CEO Ben Midgley, and Craig Pepin-Donat, a Crunch Franchise partner. New Evolution Ventures vice president Mike Feeney also invested.

Crunch was founded in New York City in 1989 by former stockbroker Doug Levine, who began producing and marketing on-brand sportswear alongside his gym early in the business’s lifecycle. By 2001 the brand had sprouted 19 locations in New York and was acquired by Bally’s in a deal valued at $90 million. Bally’s would later sell the gym chain to Angelo, Gordon & Co. for $45 million.

The Crunch transaction places all of the brand’s 300-plus locations and international franchise rights under the purview of the new owners, who have vowed to grow the system through franchising. It’s potentially a good time to make a growth push as the fitness space is healthy. The $30 billion U.S. fitness industry has grown by more than 5% annually since 2009 and is expected to continue expand as health-conscious Millennials enter their 30s and 40s.

The International Health, Racquet & Sportsclub Association (IHRSA) a globally focused trade organization which tracks the fitness industry, reports that gym membership in the U.S. rose 2.6% in 2018 to 62 million, and consumers paid more than 6 billion individual visits to nearly 40,000 fitness facilities in the country. The result, according to IHRSA’s report, was $32.3 billion in revenue—a 7.8% jump from 2017.

Source: Forbes.com

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