Why Dunkin' Makes BILLIONS From Donuts

poor boy drops out of school in the eighth grade during the height of the Great Depression to help his struggling family at that moment not a single person could have predicted he'd quit a multi-billion dollar franchise selling donuts with around 13 000 locations all over the world the story of Dunkin Donuts is crazy so sit back relax and let's delve into the insane story of Duncan [Music] [Applause] our story starts in Boston in 1916 in a poor working-class neighborhood where a boy named William Rosenberg is born or Bill as he later preferred to be called Bill's mother couldn't really read or spell but she was a talented cook and one of Bill's Fondest Memories from childhood was the smell and taste of the donut she used to bake meanwhile Bill's father had his own small grocery store and even as young as nine years old adult would help out there was one particularly hot summer's day where his father had lots of watermelons left over that needed to be sold so Bill set up a little stall outside the shop and managed to sell them all he'd shout out to customers bring a watermelon home surprise your family and one even commented he'd make a great salesman one day and in fact by the time he was 11 bill was spending his summer selling ice cream in the local area he'd get an insulated box filled with ice cream and dry ice and would go to busy areas like Carson Beach and sell them all for a nice profit of course Bill wasn't technically allowed to be doing this but if he ever saw any police he'd simply run away when he first started coming home with money from selling ice cream his mother broke down in tears saying what did you do did you steal this but Bill explained he'd earned it truthfully the family was in a lot of financial trouble so any extra money Bill could make was a big help however some older kids started noticing how much money Bill and his friends were making selling ice cream and so they started stealing their profits at the end of the day bill and his friends realized they needed to fight back so one day they turned up with rocks in their boxes instead of ice cream and a massive fight broke out bill and his friends is definitely one but they had to stay away from the beach area for a while after this luckily Bill wasn't afraid to work hard and try anything he had various odd jobs as a kid from shoveling snow out of people's driveways in the winter to picking you up and delivering laundry bags around 10 years old he started helping his father deliver groceries for his store and it would work before school started and after school finished plus weekends too despite the extremely long hours of work people probably preferred it to school in fact he actually got expelled from school briefly that was because he'd seen some kids smoking outside when the teacher asked who it was he refused to snitch on them the teacher was about to hit bill but Bill was too quick and hit the teacher first I must have got expelled whilst Bill's father got him reinstated at school by the age of 14 Bill decided to drop out of school anyway to help support his family and thus never made it past the eighth grade this was in 1929 during the start of the Great Depression and sadly it was also at this time at his father's store went out of business with the store closed his family's financial situation grew extremely desperate Bill took on whatever jobs he could get he shine shoes delivered newspapers and milk and also worked as a telegram delivery boy for Western Union through sheer hard work he became the top commission delivery boy in the division and since his dad no longer had a job the money he earned was vital for his family to survive however by the time he was 17 Phil heard of a friend of his who was making even better money working at an ice cream company called Simcoe selling ice creams out of a truck Bill decided to join this company and was mentored by an accountant at the firm called Harry Whitaker it was here Bill learned a lot about the food business and he quickly rode through the ranks from delivery boy all the way up to national sales manager this job taught Bill a lot of skills that would like to shape his life in Korea however when the second world war broke out bill was told he'd be drafted to fight unless he found an essential job so he found a job as an electrician at Hingham Shipyard he managed to get the job because he had a refrigeration engineer's license that he'd got from working at Simcoe but in reality this didn't qualify him at all for this new job so still didn't really know what he was doing but he worked extremely hard as always and eventually ended up getting promoted to contract coordinator which was deemed an essential job and thus he didn't have to go to war however his younger brother Donald was not so lucky and went off to fight bill would never forget the moment when he received a telegram informing him his little brother had been killed in combat and he'd never forget the shrieks of his mother as she broke down crying to him this tragic moment made Bill realize life was too precious to not do something he wanted to do for all his life so far Bill had been bouncing from job to job to support his family but deep down he had a bigger goal a dream that was much more ambitious and it was time to make that dream a reality well guys I think we've made it to the big leagues on YouTube as this video is sponsored by raid Shadow Legends the game that brings a console level experience to your phone I've been using the character anger the master of insults he's great anywhere you can provoke the enemy like in the arena he can shut down the enemy team I also like Raglan as she's the best reviver in raid and right now rage running an amazing trick or treat promotion for Halloween where you can win a bunch of prizes including 1 000 Amazon gift cards and some of the best epic and legendary Halloween champions in raid it's all free all you need is your raid player ID just download ready with my link in the description then head to trick or treat.playerium.com enter your details then spin the wheel and get your prize you can also use the DK Rises promo code for a bunch of free items to instantly level up any of your strongest Champions all the way to level 50. so if you haven't started playing raid yet click my link in the description or scan my QR code here on the screen and you'll also get unique bonuses worth thirty dollars we're talking a free epic Champion Rector draft 200k silver one energy refill One XP boost and one ancient Shard so you can summon awesome Champions as soon as you get in game [Applause] when World War II ended bill was determined to start his own business however he kept getting called by two people who ran a company called industrial luncheon Services a food truck business serving coffee sandwiches pastries and donuts in Bridgeport New Jersey they'd heard about Bill's success at Simcoe and wanted him on board after bill turned the job down several times they instead offered him to become a partner and co-owner of the business Instead at a discounted rate of 2 500 Bill realized instead of starting totally from scratch he could buy a third of this already established business and grow that instead he cash in his 1 500 war bonds and borrowed a thousand dollars from his mother who'd received a payout from the government since her son Donald had been killed in the war bill now owned a third of this company selling food and snacks but unfortunately it soon became clear why his two business partners had been so determined to get Bill on board they themselves didn't seem to know what they were doing they seemed very disorganized and didn't have the same principles as Belle for example they were secretly selling Goods that had been bangering the war on the black market eventually build a side to split from these two business partners and start his own catering business instead with the help of his former Mentor Harry wennica unfortunately since Bill had wasted most of his savings on this other business he had to start off with just one rickety truck they'll use the rest of his money to purchase high quality ingredients and products since he wanted to focus on serving the best food and drink possible and develop a reputation for Quality however many laughed when he set the price of his coffee at 10 cents as it was widely believed nobody would pay that much back then at the time Americans were only used to cheap low quality instant coffee whereas bill was brewing his own more premium fresh coffee and at first it seemed everyone was right people didn't buy it Bill's Truck was dingy and 10 cents seems a lot to ask at the time so Bill offered the coffee to customers for free and said they only had to pay if they thought it was good enough to pay a dime for and they did people loved the higher quality coffee once they tried it and Bill quickly built up some loyal customers this way after giving them a free taste bill would find factories that didn't have their own Cafe and then drive up outside and sell them his food and drink out of his truck and it was very effective business began to pick up so Bill wanted to expand even further the problem was he couldn't easily get new trucks because everything was rationed from the war so instead he bought some taxi cabs and Chassis and essentially built his own food trucks by modifying them with a stainless steel shelf drop down Windows and Heating units inside and whilst food trucks are a very common thing nowadays Bill's company was one of the first to really popularize this concept within a few years they had almost 200 trucks serving the New England and New York areas as Bill continued to reinvest profits into more growth however whilst Bill sold a variety of different food and drink options he soon noticed a huge percentage of his profits were coming specifically from coffee and donut sales they were not only the most popular items but they also had great profit margins so Bill decided to open a brick and mortar store in 1948 called open Kettle in Quincy Massachusetts where he'd focused predominantly on selling coffee and donuts Bill wanted to stand out from the crowd though at other donut shops you'd find maybe four or five flavors so Bill said what if we sell 52 different donut flavors since there are 52 weeks in a year so they could run a different special every week no other donut shop had even close to this variety and Bill also put seats in so people could sit inside to eat if they wanted which again was very uncommon these Innovations meant things were going well but there was one problem Bill didn't actually like the name open kettle that much so in 1950 after two years of running the store he asked his team to come up with a better name one person said well what the hell do you do with a donut you don't care that's it they all said and thus the name became Dunkin Donuts once they'd found a winning formula Bill continued to reinvest in growth like he'd always done by opening more Dunkin Donuts locations in the Boston area soon enough he'd opened six more stores but the problem was it took a lot of money and time to open each new restaurant it was going too slowly for Belle who wanted more rapid expansion Bill's business partner Harry disagreed though and said we've got seven stores already that's enough bill would say I want 70. the good news was that Bill had an idea on how to get the fast growth he wanted the bad news was that it was about to rip apart his Business Partnership and send him into debt foreign [Applause] Bill had figured out how to achieve the quicker growth he wanted franchising letting other entrepreneurs pay to set up their own Dunkin Donuts and then he'd collect a percentage of all the money those franchises made rather than having to fully run them all himself while this might seem an obvious move nowadays back then franchises were not as popular at all and often looked down upon in fact at one point they even got banned in some U.S states as there were a lot of very badly run franchises which led to a lot of franchisees getting ripped off and thus the whole business model got a bit of a bad reputation but Bill strongly felt that franchising Dunkin Donuts would be the best and quickest path to success in fact Bill believed in franchising so much he would later go on to start an organization called the international franchise Association that would serve as the voice of franchising and helps both franchise owners and franchisees many of the biggest franchises today like McDonald's KFC and Subway or benefited from this organization Bill set up in many ways Bill helped franchising become much more mainstream but still when Bill first suggested franchising Dunkin Donuts his business partner Harry hated the idea idea and felt it would complicate things way too much in truth there'd been a little tension between them even before this as Harry felt bill was taking all the credit for the company so they eventually sped up in 1955 Bill bought out Harry's share of Dunkin Donuts 350 000 controversially Harry used his money to set up a rival donut shop called Mr donut where still in order to buy out Harry Millard had to take on debt and temporarily slow down Duncan's growth but it at least meant he now had full control over the business and thus in 1955 the first Dunkin Donuts franchise opened within 10 years it had over 100 locations and this number would grow extremely rapidly as Bill franchised more and more stores all over the US and then worldwide when Harry realized Bill had been right about franchising he started franchising his rival shop Mr donut as well even though he'd been so against it at first and thus Mr donut became Duncan's biggest competitor Bill's drive to keep expanding men Duncan had the advantage though and in 1968 Dunkin Donuts had his IPO and became only the third Food Service Company to go black after McDonald's and KFC the stock was a hit with Wall Street and Dunkin Donuts continued to expand opening new stores and continuing to innovate with new products the company was thriving not bad for a broke kid who dropped out of the eighth grade however after being diagnosed with lung cancer in 1971 Bill began to step back from the business [Applause] in 1990 Dunkin Donuts was acquired by Allied Lions the same conglomerate that owned the popular ice cream brand Baskin Robbins the company then also acquired Duncan's biggest rival Mr donor the chain run by Bill's ex-business partner Harry so both donut shops were now under one company and Mr donut franchisees were given the chance to convert to a Dunkin Donut instead since Dunkin Donuts brand was more popular however by 1997 more and more people were using the internet and this presented an unusual challenge for Dunkin Donuts you see a teacher named David Felton created a website under the name dunkindonuts.org and used the site to complain about issues he had with their stores for example the lack of one percent milk along with no decent Bagel or low-fat muffin options Felton then added a comment feature for other disgruntled customers to publicly voice their criticisms too which they did and before long the website became the number one result when someone typed Dunkin Donuts into their search engine Duncan initially sent a cease and desist letter to Felton who responded by saying they would need to buy the site off him they eventually agreed on a price for an undisclosed fee in 2002 Dunkin Donuts founder Bill Rosenberg passed away from bladder cancer before then he'd survives multiple blood cancers skin cancer lung cancer and diabetes plus technically this had meant he had to give up donuts he still sneaked the odd one in now and then Bill most definitely played the pivotal role in building the company but the story of Dunkin Donuts was not over yet by December of 2005 Duncan was sold to an association of private Equity firms for whopping 2.4 billion dollars and with the change in ownership came a new slogan in 2006 the classic America runs on Duncan it was part of a multi-million dollar advertising campaign to revolutionize the brand by capturing how its coffee keeps busy Americans fueled and on the go this was the start of Dunkin Donuts shift in prioritization to Coffee instead of donuts this of course put the brand in even more direct competition with coffee companies like Starbucks Dunkin Donuts decided to throw the first punch in this battle by poking fun at Starbucks with an ad campaign mocking their competitors pretentious and hard to pronounce menu it featured customers struggling to Auto complicated and hard to print drinks since then the two companies have been in constant competition with one another and to this day these two are the biggest Coffee House chains in the world in January 2019 the company made the full switch to its new name removing Donuts from signs logos cups and anything else from then on they would just be known as Duncan initially consumer reactions to this were not positive people couldn't understand why the company wanted to distance itself from the donut Association as that's what the company initially became known for but the negative reaction to the name change was certainly not the worst press the company received there was one incident where a Duncan franchise in Thailand came under Fire after it ran an ad featuring a woman in blackface makeup in an attempt to promote its new charcoal donor although the campaign didn't upset many in Thailand where it's more common for companies to use racial stereotypes and advertising the ad was dubbed bizarre and racist then in 2019 the state of New York sued Duncan Brands which is Duncan's parent company for data breaches in 2015 where hackers stole Account Details from customers of Duncan's loyalty scheme the lawsuit alleged the Duncan failed to notify customers their personal information had been leaked despite the fact Duncan knew full well the breach had happened to make matters worse another hack happened several years later and many felt Duncan had taken a ridiculously relaxed approach to their customers private information eventually Duncan Brands agreed to pay 650 000 in fines but it's believed many dunking customers had already had their data sold on the dark web by then because of their lack security and if you're interested in going on a journey into the murky world of the dark web then now you know the story of Duncan why not go and watch the story of Silk Road the illegal website where you could buy or sell anything and I do mean anything just click here to watch that now as it's probably one of the craziest stories I've ever posted I'll see you there

Channel: MagnatesMedia

Views: 306,077

Keywords: Business, finance, businesses, companies, company, money, wealth, dunkin', dunkin, dunkin' donuts, dunkin donuts, dunkin' story, the story of dunkin', story of dunkin, dunkin donuts story, history of dunkin' donuts, Dunkin' Donuts, dunkin donuts business, dunkin donuts coffee, business success, rags to riches, magnate media, magnatemedia, MagnatesMedia, Magnates media, rags to riches story, poor to rich, how dunkin got rich, bill rosenberg dunkin, dunkin donuts business plan

Id: E9gHiJskbRI

Length: 15min 45sec (945 seconds)

Published: Sun Oct 23 2022