Investor’s Business Daily: Minimum-Wage Hikes Slow Dunkin’ Donuts Franchise Growth

Dunkin’ Donuts is seeing slow franchise growth this year. According to a recent Investor’s Business Daily article, Dunkin’ Brands says franchisees are waiting to open new stores depending on the outcome of the election and higher minimum wage debates.

Days after a survey with McDonald’s franchisees found growing tensions as wage pressures continue and sales growth has slowed, the doughnut and coffee chain announced they expect a lower target number of stores to open this year at 430 instead of 460. Compared with the 91 stores opened in the third quarter of last year, this year only 61 stores were opened in the same quarter.

Quick-service chains are having a hard time adapting to the suggested higher wages as majority of revenue for the chain comes from royalties paid by the franchisees.

Dunkin Brands and Wendy’s both reported incidents of hesitation in the New York area in terms of growth. CEO of Dunkin Brands Nigel Travis mentioned once the law to raise minimum wage to $15 an hour was passed, a second location for one New York franchisee was soon put on hold. Uncertainly and regulation were stated to be the reasoning behind the decision.

Check out the full story here.