CHAPTER I

ISSUE STATEMENT

This chapter contains Company Overview, Mission and Vision statement, Background

Overview, History of the Company, Product and Service, Current Issue, and Statement

of the Problem.

A. Company Overview

Dunkin Donut LLC operates a chain of coffee and baked goods restaurants in the United

States and internationally. The company offers hot regular/ decaf/ flavored coffee, iced

coffee, donut bagel, and muffin categories; and frozen beverage, donut, sandwiches, and

more. It also offer franchise opportunities in the United States, as well as operates various

stores and international shops. in addition, the company sells coffee, tea, and cups and

mugs online.

B. Mission and Vision Statement.

Mission

To be the leading provider of the wide range delicious beverages and baked

product around the kingdom in a convenient, relaxed, friendly environment, that insures

the highest level of quality product and best value for money.

We provide our guest, the elegant service and unforgettable experience to meet

their expectations in every single visit.

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Vision

To be always the desired place for great coffee beverages and delicious

complementary donuts and bakery products to enjoy with family and friends.

C. History of the Company ( include location )

Dunkin Donuts LLC was formerly known as open kettle and changed its name to Dunkin

Donut LLC in March 2006 the company was founded in 1948 and is based in canton

Massachusetts. Dunkin Donuts LLC operates as a subsidiary of Dunkin Donuts.

Dunkin', formerly Dunkin' Donuts, is an American multinational coffee company and

quick service restaurant. It was founded by William Rosenberg in Quincy,

Massachusetts in 1950. The chain was acquired by Baskin-Robbins' holding company

allied Lyons in 1990; its acquisition of the Mister Donut chain and conversion to Dunkin'

Donuts facilitated the brand's growth in North America that year. Dunkin' Donuts and

Baskin-Robbins have been subsidiaries of Dunkin' Brands, headquartered in Canton,

Massachusetts, since 2004. The chain began rebranding as a "beverage-led company",

and was renamed Dunkin', in January 2019.

With nearly 12,000 locations in 36 countries, Dunkin' is one of the largest coffee and

baked goods chains in the world. Its products include donuts, bagels, other baked

goods, and a variety of hot and iced beverages.

William Rosenberg opened Open Kettle in 1948, a restaurant selling donuts and coffee

in Quincy, Massachusetts, but he changed the name in 1950 to Dunkin' Donuts after

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discussing with company executives He conceived the idea for the restaurant after his

experiences selling food in factories and at construction sites, where donuts and coffee

were the two most popular items. The restaurant was successful, and Rosenberg sold

franchises to others starting in 1955.

In 1963, Rosenberg’s son Robert became CEO of the company at age 25, and Dunkin’

Donuts opened its hundredth location that year. Dunkin' Donuts was a subsidiary of

Universal Food Systems at the time, a conglomerate of 10 small food-service

businesses, and Dunkin' Donuts locations varied greatly in their menu options, with

some selling full breakfasts and others serving only donuts and coffee.

In the following years, the other businesses in the Universal Food Systems portfolio

were sold or closed, and the company was renamed to Dunkin' Donuts. The menu and

shop format were standardized, and various new menu items were introduced. The

chain was acquired by Baskin-Robbins owner Allied Lyons in 1990. By 1998, the brand

had grown to 2,500 locations worldwide with $2 billion in annual sales

Dunkin' Donuts expanded in the 1990s by buying out two rival chains: Mister

Donut and Dawn Donuts.

In 2004, the company's headquarters were relocated to Canton. In December 2005,

Dunkin' Donuts and Baskin-Robbins (by then operating under the name Dunkin' Brands)

were sold to a private equity consortium of Bain Capital, Carlyle Group, and Thomas H.

Lee Partners for $2.4 billion. By 2010, Dunkin' Donuts' global sales were $6 billion.

The Dunkin' Donuts in Natick, Massachusetts launched a program to test the concept of

curbside pickup in December 2016.

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In January 2018, Dunkin' Donuts began to open new concept locations, beginning in

Quincy, featuring modern decor, cold beverages on tap and a single-cup brewing

machine, more packaged take-out options, and dedicated pick-up lines for mobile

ordering inside and in the drive-thru. The concept was described as being part of a shift

towards becoming an "on-the-go, beverage-led brand". In addition, the location, as well

as others, began to trial signage referring to the chain as simply "Dunkin'" downplaying

"Donuts" from the name.

On July 11, 2018, Dave Hoffman took over from Nigel Travis to become the CEO. He is

looking to add 1,000 new locations outside of the Northeastern United States by the end

of 2020 and to have a revenue increase of 3 percent for stores open a year or longer.

Marketing

Dunkin' Donuts' current slogan is "America Runs on Dunkin'". In March 2009, the

company unveiled the alternate slogan "You 'Kin Do It!" and launched a $100 million ad

campaign promotion Dunkin' Donuts' "It's Worth the Trip" campaign starred sleepy-eyed

"Fred the Baker" and featured the catchphrase "Time to make the donuts". It won

honors from the Television Bureau of Advertising as one of the five best television

advertisements of the 1980s. Fred the Baker was played by actor Michael Vale for 15

years until his retirement in 1997. The catchphrase was used in the title of founder

William Rosenberg's autobiography Time to Make the Donuts: The Founder of Dunkin'

Donuts Shares an American Journey.

Dunkin' Donuts changed its slogan in March 2006 to "America Runs on Dunkin'". They

Might Be Giants songs have been featured in an ongoing series of advertisements of

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new products to boost summer sales. In 2007, a series of Dunkin' Donuts commercials

referred to the fictional language "Fritalian". "Is it French? Or is it Italian?" sings a

chorus of customers facing a long menu of non-English terms. "Perhaps Fritalian?" was

created by Hill Holliday to "poke fun at pretentious Starbucks-style coffee chains, with

patrons attempting to order hard-to-pronounce lattes. The commercial was interpreted

as a deliberate mocking of Starbucks. The commercials' punch line is: "Delicious lattes

from Dunkin' Donuts. You order them in English". It has been a point of discussion that

latte, cappuccino, and espresso are loanwords from Italian which have no equivalence

in English. The commercials, however, refer to the Starbucks ordering language itself,

poking fun at words such as grande and venti. Further commercials in 2007 more

directly mocked Starbucks, with a customer ordering a "large" and being chastised to

use the term "dieci".

Rachael Ray has starred in commercials for Dunkin' Donuts since 2007. In May 2008,

Dunkin' Donuts removed a commercial from its website featuring Ray wearing a scarf

with a black and white paisley floral design, in response to columnist Michelle Malkin's

claims that the scarf resembled the keffiyeh worn by Yasser Arafat and therefore a sign

of support for terrorists. Dunkin' Donuts pulled that commercial off the airleading to

criticism of the company's perceived kowtowing to special interests.

In 2017, Dunkin' Donuts announced that it would begin testing the name of simply

"Dunkin'" at some retail locations, as they would like to be thought of as a destination for

coffee, it’s most profitable product. The branding would be implemented in other

locations in the latter half of 2018 if it is successful.

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On April 3, 2018, Dunkin' Donuts teamed up with the Massachusetts shoe

manufacturer, Saucony to produce a strawberry-frosted donut themed running shoe to

commemorate the 122nd running of the Boston Marathon. The Saucony X Dunkin’

Kinvara 9 comes in a donut box and the heel of the shoe is covered in rainbow

sprinkles.

United States

As of February 9, 2017, all of Dunkin' Donuts locations are franchisee owned and

operated within its Northeast home base, Dunkin' Donuts is very popular, and

particularly dominant within the six New England states, especially Massachusetts. In

addition to its stand-alone shops, Dunkin' Donuts shops can be found within many gas

stations, supermarkets, mall and airport food courts, and Walmart stores. Dunkin'

Donuts is continuing to grow by adding more locations around the U.S., including the

regions where it has been long established. In July 2013, Dunkin' Donuts opened its

500th restaurant, in New York City. This location is combined with a Baskin-Robbins.

While the greatest number of shops are located in the Northeastern United States,

Dunkin' Donuts has since slowly expanded across to the west coast, with more shops

planned for the next few years. In the U.S., there are at least 82 franchisees west of the

Mississippi River, mostly in central Iowa, which is expected to have approximately 20

new locations over the next 6 years. Arizona, Nevada, New Mexico, and Texas are all

expected to see new locations over the next several years as well.

In the past decade, Dunkin' Donuts has opened many locations in the Dallas/Fort

Worth, Phoenix, and Las Vegas metropolitan areas. In 2013, Dunkin' Donuts opened

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their first eight locations in the Salt Lake City area, bringing the brand to Utah for the

first time. Shop locations also opened in the Denver and Omaha regions. 2014 saw the

return of Dunkin' Donuts to the state of Minnesota after nearly a decade's absence, with

a new shop opened inside the Kahler Grand Hotel in Rochester

In the United States, Dunkin' Donuts is sometimes paired with Baskin-Robbins ice

cream in a single multibranded store. While such locations usually maintain separate

counters for each chain (much like co-branded Wendy's–Tim Hortons locations in

Canada), depending on business that day, both chains' products can be bought at a

single counter (usually Dunkin' Donuts').[citation needed] The practice of single-counter

service is similar to that of multibranded Yum! Brands stores such as KFC–Taco Bell,

which share a single kitchen and cashier line.

Since 2014, an increasing number of Dunkin' Donuts shops have begun appearing in

California. Traditionally, California has been the stronghold of sister brand Baskin-

Robbins, which was founded in Glendale. Dunkin' Donuts signed agreements to open

18 shops in Orange County, along with eight more shops planned for the North Inland

Empire, including the first location in that region that opened in Upland in early 2015. By

December 2015, more than 20 California shops were opened, including locations in

Barstow (at Barstow Station), Downey, Irvine, Laguna Hills, Long Beach, Modesto,

Ramona, San Diego (at Embassy Suites), Santa Monica, Upland, and Whittier; along

with a shop on the Camp Pendleton military base and a location inside the LAX Airport.

The San Diego Embassy Suites shop, shared with Baskin-Robbins, was the company's

first co-branded location in California when it opened in March 2014, while the Santa

Monica shop was the first to open in the Los Angeles area in September 2014. Going

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forward from 2015, the company expects to begin opening what could eventually total

more than 1,000 shops in California.

On January 16, 2013, Nigel Travis, Dunkin' Donuts' CEO, announced that the Dunkin'

Donuts franchises would be available in California beginning in 2015 In July 2013,

Dunkin’ Donuts announced that it has signed its first Southern California multi-unit store

development agreements with four franchise groups for a total commitment of 45 new

restaurants. The first standalone restaurants were expected to open in 2015 in Orange

and Los Angeles counties. The chain also planned to expand into more stores in Texas

by 2015 On March 10, 2014, the first Dunkin' Donuts/Baskin-Robbins combination store

in Southern California opened in Ramona. This is Dunkin' Donuts' third California shop

to open, following shops in Barstow and on Camp Pendleton. Since March 2014,

Dunkin' Donuts has opened several additional locations throughout California, including

the Los Angeles area. In 2016, Dunkin' Donuts shops opened in the San Francisco Bay

Area in Walnut Creek and Half Moon Bay. Dunkin' Donuts shops opened in the San

Francisco Bay Area in Walnut Creek, Half Moon Bay, and American Canyon in 2016, as

well as South San Francisco and Fremont, in 2017.

In the Philippines, operated by Golden Donuts Inc., the first Dunkin Donuts Franchise

store opened in Quad Car Park, which is now Park Square, in Makati in 1981.

It then started opening more Dunkin Donuts shops all over Metro Manila, from dine-in

shops to take-out booths, becoming a popular brand of “pasalubong” in the Philippines.

Dunkin Donuts is the world’s leading donuts, coffee and baked goods chain, with over

2,600 stores in more than 30 countries around the world. In 1981, Golden donuts Inc.

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opened its first Dunkin Donuts in the Philippines, and has since expanded to become

the largest donut chain.

Location of the company in the Philippines: GDI Building, Sheridan Street, Corner

Reliance Street, Mandaluyong 1554 Metro Manila.

D. Product and Services

10 Classic Dunkin’ Donuts doughnut 3. Jelly Donut

flavors:

1. Strawberry-Frosted Donut

4. Marble-Frosted Donut
2. Cinnamon-Sugar Donut

5. Chocolate Kreme-Filled Donut

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 10. Old-Fashioned Donut

6. Bavarian Kreme-Filled Donut

5 Dunkin' Donuts' Iced Coffee

Flavors,

1. Caramel Mocha
7. Boston Kreme Pie Donut

8. Glazed Donut
2. Cookie Dough Swirl

9. Chocolate-Glazed Cake Donut

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 3. French Vanilla Swirl 5. Hazelnut Swirl

4. White Chocolate Raspberry

E. Current Issue

The Bureau of Internal Revenue has filed a P1.12-billion tax evasion case against golden

donuts Inc. (GDI) The exclusive Philippine franchise of international brand Dunkin Donuts.

F. Statement of the Problem

 Golden Donuts Inc. PH Franchise charge with P1-billion tax evasion raps by

the COA.

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 CHAPTER II

SWOT ANALYSIS

This contains Strength, Weaknesses, Opportunities, and Threats of the Dunkin

Donuts.

Strength

 Impressive presence locally and internationally and growing - 317 net new units

added outside US in 2016 415 net new dunkin Donuts added 2016 US by

franchisees

 Focus on marketing and better customer experience -The brand has focused

on marketing and customer service to grow its sales and popularity

 Focus on franchisee - helping the franchisees make better informed decisions

by providing analytical data around pricing and guest purchase decisions

Weaknesses

 Poor franchisee relationship and lawsuit against franchisees- While the

franchisees model has an upside it has a downside too. There are issues with

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 management in control in the past dunkin franchisees have also faced a high

number of lawsuit against them.

 Slow expansion in fast developing or newly developed economies- The pace of

Dunkin’s international growth is still slow. The newly developed economies it might

benefits by expanding at faster rate. Its lousy growth rate in the emerging

economies is a major weakness.

Opportunities

 International market expansion - Can be a great source if revenue and growth for

Dunkin and Baskin Robbins. There are several parts of the world where Dunkin

Donuts does not have an impressive presence.

 Health friendly menu to attract the millennial customers - A more health friendly

menu can be more attractive for the health conscious millennial generation. This

will help drive sales revenue.

 Digital technology for better and more innovative customer service - Has help

brands create a better reputation through marketing and customer service Dunkin

can also exploit visitor opportunities for better results.

Threats

 Strong Competition - Like any other brand direct and indirect competition is a major

threat to Dunkin Donut. But one of the worrying factors for the brand is it is not

expanding as fast as its major competitors like Starbucks, KFC, Pizza Hut,

McDonalds, Burger King, or others.

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  Currency fluctuations and stronger dollar rate affects the brand’s revenue -

Sluggish economic growth in several key economies also affects the profits. A

stronger dollar means less revenue from international sales.

Chapter III

Alternative Courses of Action

This chapter contains the alternative course of action of the case study to identify the

suggestion as to the best course of action. Each ACA must have (3) advantage and

disadvantages.

ACA #1 - Golden Donuts Inc. franchisees must pay state corporate for their franchise tax.

Immaculate and regularly.

Advantages:

 It helps to avoid tax evasion case

 Creates social awareness

 Double taxation

Disadvantages:

 Inconvenient

 Limits capital formations and investment opportunities

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  Affects the ability to work and motivation level

 ACA # 2 - Golden Donuts Inc. invoice or register should contain tax identification

number (TIN)

Advantages:

 Invoice is clear, detailed and precise

 It allows getting official receipt printed with accredited printers.

 It prompts payment

Disadvantages:

 Disputed delaying payment

 .It may cost more than other finance types

 Decrease profits

ACA # 3 - Golden Donuts Inc. engaged in the sale of goods/services should declare the

proper sales income from their business activities.

Advantages:

 Protecting a company name

 Investment and opportunities

 Credibility and trust

Disadvantages:

 Company name is subject to certain restrictions

 Not suitable for undercharged bankrupts or disqualified directors

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  It may be difficult to bid and accept larger contracts

CHAPTER IV

RECOMMENDATION

This chapter specifies and selected ACA to be able to solve the problems of the case

study.

Recommendation

ACA # 1- Golden Donuts Inc. franchisees must pay state corporate for their franchise tax.

Immaculate regularly

 The researcher recommended that the golden donuts Inc. franchisees should pay

their tax.

 Franchisees should be aware of taxes and they should meet their accountant or

business advisor.

 The researcher recommended that they must review their income statement each

year to ensure they are paying the correct amount of tax based on their structure

and to review whether the current structure is still the most appropriate one for

them.

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 CHAPTER V

ACTION PLAN

This chapter shows the action plan needed to reach with proposed strategy and the steps

that must be performed for the strategy to succeed.

1. Checking of sales invoice/ Cash register

 Accounting Department

 Regular checking of sales invoice if it have tin number

2. Checking of book audit and financial statement

 3rd party or Independent Auditor

 Regular annual checking of book audit and financial statement

3. Regular paying of tax

 Accounting Head

 Paying of tax on time and regularly

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 CHAPTER VI

TIME TABLE

This chapter shows the proposed plan of the proposed strategy and the steps that must

be performed for the strategy to succeed.

Solution Department/ Action Budget Time Frame

Person In

charge

1. Checking of Accounting Regular 30,000 Every 3

sales Department checking of months

invoice/ sales invoice

Cash if it have tin

register number

2. Checking of Internal Auditor Regular 130,000 Monthly

book audit and 3rd party or annual

and Independent checking of

Auditor book audit and

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 financial financial

statement statement

3. Regular Accounting Paying of tax 3,000 Annually

paying of tax Head on time and

regularly

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