The 8th Grade Drop Out Who Invented Dunkin' Donuts

[Music] we know dunkin donuts are always fresh and come in more varieties than supermarkets excuse me but we like to make sure do you have delicious chocolate roasted doughnuts like dunkin donuts no do you have five kinds of jelly doughnuts no ma'am were these made fresh this morning no good dunkin donuts up to 52 varieties made fresh day and night no supermarket can say that many know the saying that america runs on dunkin donuts but few know the story behind the founder william rosenberg in the eighth grade he dropped out of school to support his family and became the genius of many inventions one of them being franchising which paved the way for mcdonald's kfc subway and other chains to succeed in 1916 william was born to immigrant jewish parents in a humble urban neighborhood called dorchester in boston his family owned a grocery store but were still considered poor and struggled to pay their bills since they didn't save enough for the down payment so williams started delivering groceries for them and worked several odd jobs as early as 10 years old he picked up and dropped off laundry sorted mail shined shoes handed out newspapers gave out ice cream and even sold pieces of ice some days he had to climb three flights of stairs with a heavy block of ice and a big water pan underneath at the end of the day he was so exhausted he could barely move still he took pride in his work and the lessons that it taught him i learned that if i believed i could do something and had a positive attitude and was there to serve people i could succeed it didn't make any difference if i was shining shoes or selling newspapers maintaining a positive attitude prepared him for many unfortunate events when the great depression hit william and his family survived emotionally and financially but not without sacrifice william insisted on dropping out of school in the eighth grade to support the family after they lost their store not long after he got a full-time job delivering telegrams the faster he peddled his bike and the harder he worked the more commission he earned eventually he became the best in his division but he quit after three years to make more money at simcoe a company that sold ice cream out of refrigerated trucks it was there where he met his first mentor harry winiker harry was an accountant for simcoe who taught william everything he needed to know about balance sheets statements and figures these skills helped him grow within the company over four years he rose from being a delivery boy to a manager and later a national sales manager his time at the company helped him start a new life altogether he married harry's sister-in-law started a family and moved into a high-class neighborhood good fortune was finally on his side up until he received a message that he was bound to hear the draft board informed him that he would have to fight in the second world war unless he found an essential job so he left simcoe and headed towards a nearby shipyard in search of a new job they offered him a handyman position for minimum wage but he wasn't happy are you kidding me i have a refrigerator engineer license william barked what does that qualify you for they asked plumbing or electrical william answered the shipyard was impressed and offered william a job as an electrician in the highest salary they could afford the only problem is that while william did obtain a license while working for simcoe he could barely put a plug in a socket it didn't take long for williams manager to find them he was electrocuted on his first day at work and switched to the cable department still his manager saw potential in him and paired him with a couple of his top technician like harry they mentored him and taught him everything he needed to know it goes to prove that no matter how little you know if you're eager to learn ask questions and go to the right people you can do almost anything over a decade william went from being an 8th grade dropout to an electrician in training deep down william knew that being an electrician wasn't for him so he started to look for other opportunities at the shipyard with support from his colleagues he won the position of a union delicate and was later promoted to contract coordinator since his new position was considered essential he never got called to fight in the war but his youngest brother donald did similar to william donald rose through the ranks quickly and became a lieutenant in the army though donald never got to enjoy the same freedom as william he never made it back home he was killed in the war when william received the news he was devastated losing donald made him reflect on what he was capable of and what he always wanted to accomplish starting his own business life will test you that's a promise it's what you do with the challenges that determine your failure or your success around that time william was approached by two men who had heard about a success at simcoe they wanted him to work for their new catering company industrial lunch on services when william turned down their offer they offered to give him a third of the company for 2500 harry looked into the opportunity for him and encouraged him to go for it so with fifteen hundred dollars in war bonds and a thousand dollar loan from his mother he became a partner as william grew the company and quadruple sales he realized that he made a big mistake his partners were the wrong people to get into business with they secretly sold products on the black market and were only interested in making a quick buck so william decided to cut ties with them and run his own catering company with harry the loss of donald gave him the confidence he needed and faith that nothing could stop him to save money he and his wife and two kids moved into a single room in his parents house it was a tough time for them but worth it considering his former partners never gave his money back fortunately working with them led to discovering a commodity that would change william's luck coffee at the time few americans knew how to make quality coffee instead of grinding and brewing the beans they boiled an instant mix into a pot and kept it hot for several hours which made it lose flavor it either tasted burnt or like flavored water still coffee made up 40 of williams former partners sales he had a hunch that americans would one day be hooked on quality coffee and that it would become the backbone of his business so he ordered a 100 gallon stainless steel tank with a bag on top to make drip coffee after the water was boiled it would be poured over the coffee grounds just until the brew reached the right strength he also decided to order gallons of cream and milk instead of the artificial plastic containers from the best dairy company around when william told his suppliers about his business they became curious they asked how much he had planned to charge for a cup of coffee 10 cents a cup william told them are you crazy you can't charge that much even the high class hotel sell coffee for five cents a cup they told them others are selling six ounces of flavored water but i'm gonna sell 12 ounces of quality coffee william said you can't do that they argued watch me william insisted william had big plans and no one could stop him he was a natural entrepreneur who was always thinking about how he could do things better and more efficiently so when he came up with the idea of catering food out of a truck and discovered there were few left after the war he pivoted towards something different he bought 10 taxi cabs and chassis and built insulated food trucks with side hinges heating units stainless steel shelves and a coffee tank holder inside he would serve top quality sandwiches soups donuts pastries and coffee that's how we design what is commonly called a food truck you see them everywhere now we were innovators and creators doing things differently running the business was never easy william got up at 2 am every day to prepare the food and coffee for his drivers but they became a hit and within a year he landed his prominent feature in the boston herald with the headline meals on wheels eventually the business expanded into running cafeterias william and his employees would buy install and operate the equipment for many companies and just as he predicted people were hooked on his coffee he even struggled to keep up with the demand until he hired an engineering firm to create a custom machine he was one of the few americans who knew people were willing to pay for quality coffee three years after opening william discovered a new commodity donuts along with coffee it brought over 40 percent of his sales coffee and donuts are like husband and wife william would say so he decided to make his own instead of purchasing them and poached the baker from his seller alvin johnson it was a smart move alvin told william that at his last company their donut store made more money than their wholesale trucks since they didn't have to pay any delivery costs william was shocked and could feel the same fire in his belly that he felt when he started his catering company there was no question that he would make quality donuts and open a store too that weekend william drove around boston to find the right location for the right price fortunately he found a small space in quincy it used to be an awning store and before that three different gas stations nobody had ever succeeded there so he was able to negotiate a lease for a lower price harry hated the idea but knew there was no stopping william william called his donut store open kettle and like his first business made it different from the start he was the first to offer seats so that customers could eat inside sold 28 kinds of donuts instead of the typical four and serve coffee and other beverages after just one year the business made around three thousand dollars a week it was later renamed to dunkin donuts before expanding into five stores but william had a hunch that they could do better and expand across the us for that to happen they would need to start franchising once again harry hated the idea and told him he was crazy why complicate things by franchising we already have enough stores harry argued if i don't make it by the time i'm 45 years old when am i going to make it william told them he knew that pivoting towards coffee and donuts would lead to a successful franchise aside from the disagreements tension started brewing for other reasons harry's wife etta who was the sister of william's wife allegedly disliked how william was getting all the recognition for the business's success many people would even refer to him as mr donut that's when harry decided to cut ties with william and start a donut store ironically called mr donut while william now had the freedom to start franchising he was financially constrained ending his partnership with harry involved buying him out with money he didn't have he had to borrow thousands of dollars from friends and even his suppliers his debt led to slowing down dunkin donuts growth for years and starting all over again to build its momentum now he would have to do more than get people hooked on his coffee and donuts he would have to prove to the world that franchising was a legitimate and profitable business at the time many unreliable and untrustworthy people were franchising so their franchisees made little money and started to make complaints to the government the government ended up passing legislation that could have killed the industry franchising became illegal in some states and banned from appearing in ads in the wall street journal and new york times still william believed that franchising was the epitome of entrepreneurship and that would become one of the most dynamic economic factors in the world so he decided to start the international franchise association where reliable and trustworthy entrepreneurs could exchange ideas and help each other with legal real estate and other issues even though harry was against the idea in the past he turned mr donut into a competing franchise six years after the ifa launch dunkin donuts opened over 100 stores across the u.s other businesses grew from the association support too including kfc mcdonald's and subway william would often say to his employees that he'd hoped every single one of them would one day become a millionaire the more people you have doing well the better off you'll be it was my philosophy and policy i didn't tolerate anyone who thought otherwise at the height of dunkin donuts success william's son bob who was getting an mba at harvard walked in his office to ask a surprising question where did you learn everything you know about business i guess by doing it why william answered everything they've been teaching me at school is what you've been telling me all along bob told him william never forgot that conversation it made him realize that having a formal education isn't everything in the world it's more than a formal education that makes you a leader or successful in life it's your attitude your hunger to achieve your empathy towards people and your ability to meet and get along with people those are the important things eventually william took a backseat from his day-to-day responsibilities and handed them over to bob that way he could focus on the next big dream going public by that time franchisers were the dot-coms of the late 1900s the industry was growing in leaps and bounds wall street bankers told william that he could go public at 15 a share but he insisted that the company was worth more and push for 20 a share if you know so much about our business what do you think it will open at they asked him i guarantee it will open at 25 a share william answered william was right dunkin donuts even closed at 26 dollars a share exceeding wall street expectations on that day willian's dream for the company and his employees who had a stock option plan came true every single one of them became millionaires in his memoir william wrote i don't care who or what you are how much money you have or don't have what religion you practice or language you speak every man and woman is entitled to a dream today there are over 11 000 duncan stores worldwide across 36 countries this is the story of how an 8th grade dropped out turned entrepreneur beat the odds many times built the world's largest donut and coffee chain and paved the way for the franchising industry [Music] for more inspiring stories and advice from today's most successful leaders don't forget to subscribe to our channel

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Id: NQ_3kT63Dzk

Length: 14min 19sec (859 seconds)

Published: Wed Jul 22 2020