How to Build a Billion-Dollar Donut Empire

The Early Life of William Rosenberg

• William Rosenberg, also known as Bill, was born in 1916 in a poor working-class neighborhood in Boston.

• From a young age, Bill took on various odd jobs to help support his struggling family during the Great Depression.

• He dropped out of school at the age of 14 to contribute to the family's finances and never made it past the eighth grade.

• His family faced extreme financial difficulties after his father's store closed during the Great Depression, and Bill took on jobs like shining shoes and delivering newspapers to make ends meet.

The Early Life of William Rosenberg

Bill's Journey to Entrepreneurship

• Bill worked at an ice cream company called Simcoe selling ice creams out of a truck before he was mentored by an accountant named Harry Whitaker. He quickly rose through the ranks from delivery boy to national sales manager, gaining valuable skills related to the food business.

• When the second world war broke out, Bill was at risk of being drafted to fight. He managed to secure a job as an electrician at Hingham Shipyard by using a refrigeration engineer's license from his previous job. Despite not being qualified, he worked hard and eventually got promoted to contract coordinator, avoiding military service.

• The loss of his younger brother in combat made Bill realize the preciousness of life and prompted him to pursue his bigger goal and dream. He had been supporting his family by taking on various jobs, but now he wanted to make his dream a reality.

• After World War II ended, Bill was approached by the owners of a food truck business called Industrial Luncheon Services. Despite initially turning down a job offer, he eventually decided to become a partner and co-owner of the business. He used his war bonds and a loan from his mother to buy a third of the company and started selling food and snacks.

Bill's Journey to Entrepreneurship

The Rise of Dunkin Donuts

• Bill eventually split from his disorganized business partners and started his own catering business with the help of his former mentor.

• He focused on serving high-quality food and drink, pricing his coffee at 10 cents despite the skepticism of others.

• To attract customers, Bill offered free coffee with the condition that they only paid if they thought it was good enough.

• As the business picked up, Bill expanded by modifying taxi cabs into food trucks, and within a few years, he had almost 200 trucks serving the New England and New York areas.

• Noticing the high profits from coffee and donut sales, Bill opened a brick and mortar store in 1948 called 'Open Kettle' in Quincy, Massachusetts.

• With 52 different donut flavors and seating inside the store, Bill's innovative approach set his donut shop apart from others.

• In 1950, the name was changed to Dunkin Donuts after a team member suggested the catchy name.

• Bill continued to reinvest in growth by opening more Dunkin Donuts locations in the Boston area, eventually expanding to six more stores.

The Rise of Dunkin Donuts

The Rise of Dunkin' Donuts through Franchising

• In 1955, Bill bought out Harry's share of Dunkin' Donuts for $350,000 and took full control of the business after tensions arose between them.

• The first Dunkin' Donuts franchise opened in 1955, and within 10 years, it had over 100 locations.

• Despite initial resistance, Bill's decision to franchise Dunkin' Donuts proved to be a game-changer, leading to rapid expansion and global presence.

• Following Bill's diagnosis of lung cancer in 1971, he began to step back from the business, and in 1990, Dunkin' Donuts was acquired by Allied Lyons.

• The acquisition also included Dunkin' Donuts' biggest rival, Mr. Donut, which was run by Bill's ex-business partner, Harry.

The Rise of Dunkin' Donuts through Franchising

The Evolution of Dunkin Donuts

• In 2001, a man named Matt Felton created a website called dunkindonuts.org to complain about various issues he had with Dunkin Donuts, including the absence of one percent milk and the lack of decent bagel or low-fat muffin options.

• Felton added a comment feature for other dissatisfied customers to voice their criticisms, which led to the website becoming the top search result for Dunkin Donuts.

• After receiving a cease and desist letter from Dunkin Donuts, Felton agreed to sell the website for an undisclosed fee in 2002.

• Before his passing in 2002, Dunkin Donuts founder Bill Rosenberg battled multiple health issues, including blood cancers, skin cancer, lung cancer, and diabetes.

• In December 2005, Dunkin Donuts was sold to a group of private equity firms for $2.4 billion, marking a significant shift in the company's focus from donuts to coffee.

• The acquisition led to a new slogan 'America runs on Dunkin' in 2006, accompanied by a multi-million dollar advertising campaign emphasizing the role of Dunkin's coffee in keeping Americans fueled and on the go.

• As a result, Dunkin Donuts shifted its priority to coffee, entering into direct competition with coffee giant Starbucks.

• The rivalry between Dunkin Donuts and Starbucks intensified, with Dunkin Donuts launching an ad campaign mocking Starbucks' complex menu.

• In 2019, Dunkin Donuts officially rebranded to just 'Dunkin', distancing itself from the donut association, despite initial negative reactions from consumers.

• The company faced controversies, including a racially insensitive ad in Thailand and data breaches in 2015 and later in 2019, leading to a lawsuit and fines.

The Evolution of Dunkin Donuts

Conclusion:

From a struggling working-class neighborhood to a global donut empire, Dunkin' Donuts' story is a testament to the power of perseverance and innovation. Bill Rosenberg's entrepreneurial journey provides valuable insights into building a successful business. Learn from their inspiring story and discover the key strategies to make billions from a donut empire.