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Jubilant FoodWorks testing smaller Dunkin' Donuts outlet format

The company said it piloted a low-capex, small kiosk-based model, serving a combination of beverages, donuts, and simple food with faster payback due to low rent and smaller format for Dunkin' Donuts

twitter-logoPTI | August 30, 2020 | Updated 14:13 IST
Jubilant FoodWorks testing smaller Dunkin' Donuts outlet format
Jubilant FoodWorks opened the first Dunkin' Donuts outlet in India in April 2012

Jubilant FoodWorks, which operates Dunkin' Donuts chain in India, has piloted a smaller sized kiosk model for the coffee and baked goods chain in the country and is evaluating opportunities to scale up through the new format.

"Dunkin' Donuts India is using a calibrated pilot to test the new format of restaurants. The company is now evaluating opportunities of growth to build this model. There is continued focus on optimising cost and bringing efficiencies," Jubilant FoodWorks said in its annual report for financial year 2019-20.

Jubilant FoodWorks, which also operates Domino's Pizza chain in India, said for Dunkin' Donuts, it opened 4 restaurants with a smaller format to pilot and test the effectiveness of the format.

The company said it piloted a "low-capex, small kiosk-based model, serving a combination of beverages, donuts and simple food with faster payback due to low rent and smaller format" for Dunkin' Donuts.

These smaller format stores are 100-200 square feet kiosks, it added.

The company said it is focused on scaling up Dunkin' Donuts brand in the country.

In 2011, Dunkin' Donuts signed a franchise agreement with Jubilant FoodWorks to develop 500 restaurants across the country over the next 15 years.

The company, however, has been struggling with finding the right format for the brand.

Jubilant FoodWorks, which opened first Dunkin' Donuts outlet in India in April 2012, has closed many outlets in the past few years in the country to cut its losses. In 2019-20, the company closed 1 outlet. In 2018-19 it had closed 7 Dunkin' Donuts outlets and 31 in 2017-18.

The company operated 1,335 Domino's Pizza Restaurants, 34 Dunkin' Donuts Restaurants and 4 Hong's Kitchen, its home-grown Chinese cuisine restaurant brand, as on March 31, 2020

Jubilant FoodWorks said in the wake of the COVID-19 pandemic, going forward the entire business model of the restaurant industry needs to change and technology, hygiene and safety would become the key elements.

"Restaurants will have to focus on their delivery capacities and add value with initiatives such as special takeout-only menus. Further, contactless delivery will be the way to go. Seating capacity at restaurants is expected to fall to adhere to social distancing norms, which will reduce meal volumes...In the short term, the organised sector will grow faster and the unorganised sector will progressively lose its scale and scope," the company said.

Jubilant FoodWorks said the advantage of its core operating model positions it well to thrive in the post-COVID-19 world.

Macro trends in the long term are widely expected to be supportive given the rising disposable incomes, higher propensity for branded and delivery-based options and greater prevalence of online ordering. COVID-19 has accelerated the wider shift to the organised industry and Jubilant FoodWorks stands to be a prominent beneficiary, the company added.

Also Read: Jubilant FoodWorks share gains 6% despite 58% fall in Q4 net profit

Also Read: Jubilant Life Sciences to focus on sustaining operational, financial performance in near-term

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