Dunkin' Coffee 'Cla$h'

"It's simple," he said. "We build up the businesses for them, then they cut us out so they can resell them."…Dunkin' Donuts then offered them a munchkin-sized buyout of $400,000 for the two stores they opened - stores they could resell for $700,000 or $800,000 each. And when the partners solicited offers elsewhere, Dunkin' Donuts nixed the deals - even though the potential buyers came from a corporate-approved list, Gluck said.

New York Times
March 23, 2008

Dunkin' Coffee 'Cla$h'
Angela Montefinise

March 23, 2008 — A coffeehouse controversy is brewing at Dunkin' Donuts.

Furious franchise owners claim the caffeine kings are aggressively going after them for minor infractions in an effort to take over the businesses they built and then resell them for hundreds of thousands of dollars.

"It's really unfair," said Asam Habib, 48, a Muslim man in danger of losing the two Brooklyn franchises he runs with his Hasidic business partner, Cindy Gluck.

"It's simple," he said. "We build up the businesses for them, then they cut us out so they can resell them."

The partners were sued by Dunkin' Donuts last year when Gluck attempted to sell 15 percent of her shares to a manager - something she didn't realize violated their contract with corporate. When Gluck told Dunkin' Donuts of her plan, she was informed that it wasn't allowed, and she immediately pulled back the sale - but it was too late.

Nationally, Dunkin' Donuts has sued franchise owners 154 times since 2006, according to court records. By comparison, McDonald's sued its franchises five times, and Subway - which has four times the number of locations as Dunkin' Donuts - sued 12 times in the same period.

As for Gluck and Habib, Dunkin' Donuts then offered them a munchkin-sized buyout of $400,000 for the two stores they opened - stores they could resell for $700,000 or $800,000 each. And when the partners solicited offers elsewhere, Dunkin' Donuts nixed the deals - even though the potential buyers came from a corporate-approved list, Gluck said.

Dunkin' Donuts spokesman Stephen Caldeira said the company holds franchisees to very high standards, and "would never pursue legal action against a franchisee without clear cause."

Said Gluck, "I can't even go into a Dunkin' Donuts now without feeling sick."

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Risks: Raining litigation, Immigrants as prey, Termination of franchisee, single, Build up the business so they can take it, Resale value set by franchisor, Resale or transfer store through franchisor to new franchisee, Re-sales as a profit center, Offered much less than market value of franchise, Resale permission unreasonably withheld, United States, 20080323 Dunkin Coffee

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