🍟 6/19/2023 – The Reason Dunkin’ Has A Japanese Clone

DEEP DIVE 

Dunkin’s Japanese Clone

America may run on Dunkin’, but Japan runs on a different franchise: Mister Donut.

In fact, this eerily similar competitor was spawned from a bitter business breakup with Dunkin’s founder, decades ago.

Here’s how one family feud changed the trajectory of donuts in both America and Japan…

Rosenberg & Winokur

In 1933, William Rosenberg got a job as a delivery boy at Jack & Jill Ice Cream when he was 17 years old. In just 4 years, he worked his way up to becoming the National Sales Manager.

His rapid ascent was thanks to an early mentor, Harry Winokur.

When the United States entered WWII 2 years later, Rosenberg got a job at a steel mill to support the war effort. During the work breaks, he noticed food trucks showed up everyday selling sandwiches, snacks, coffees, and…donuts.

So when the war ended in 1945, he had an idea. Rosenberg withdrew $1,500 in war bonds and took out a $1,000 loan to start a food truck.

He quickly built a fleet of food trucks that served factory workers all kinds of food on the outskirts of Boston. As his fleet grew he noticed however that nearly 50% of his total revenue was coming from just coffee & donuts.

It was time to pivot his approach, and go all in on coffee and donuts…

The Original Dunkin’

With his old mentor, Harry Winokur, they opened a breakfast spot named The Open Kettle. Business boomed immediately, but one thing never felt right to Rosenberg – the name.

So in 1950, 2 years after the opening, he changed the name to – you guessed it – Dunkin’ Donuts. But here’s when trouble started brewing…

Rosenberg wanted to expand aggressively, while Winokur was happy to remain as they were. Winokur would say, “we’ve got six stores, we’ve got seven, that’s enough.” 

Rosenberg would respond, “I want 70.”

This tension led to a full on disagreement, which would get so ugly that Winokur left in 1955 to start a competitor – Mister Donut.

According to old newspaper articles I dug up, it was “an absolute carbon copy of Dunkin’ Donuts, the doughnut variety was 100 percent the same”.

The Rise of Mister Donut

Winokur threw his hesitations about growth out the window and started franchising immediately. Hellbent on catching up to Dunkin’ (and getting revenge on Rosenberg), the word “dunk” was banned from being spoken in his stores.

At Mister Donut, you *dipped* the donuts

But the wildest part? Prior to all this, Winokur married a woman named Etna Greenberg, and Rosenberg married Etna’s sister, Bertha.

Winokur and Rosenberg were brother-in-laws! And despite some VERY awkward family parties, they both built MASSIVE brands..

Winokur’s Mister Donut was acquired in 1970 by International Multifoods.

The following year, the first Japanese Mister Donut opened in Osaka, 1 year after Dunkin entered the country. This started a “donut-boom” in Japan.

Customers flocked to the store to try the foreign delicacy, and Mister Donut became a hit.

The main reason? A man named Keiji Chiba. Before opening that first store, he advised Mister Donut to trial the concept via a secret location in a warehouse, to get customer feedback.

At first, customers hated it, so Chiba overhauled the menu and adapted it to the Japanese palate.

Instead of setting up American copies, Mister Donut localized the concept and gained far more popularity in the Japanese market.

Success Abroad, But Not At Home

Mister Donut’s Japanese  success saw them lose focus in the US.

Dunkin, who was acquired by Allied Lyons in 1989, and 4x bigger in the US – acquired all ~500 American locations of Mister Donut in 1990.

Almost immediately, they converted all of those Mister Donuts to Dunkin’ branded locations.

Rosenberg: 1 – Winokur: 0

But Mister Donut’s international success continued, as evinced by their 5,000+ locations outside the US today. And despite Dunkin’s first mover advantage in Japan, they exited the country in 1998, never finding success with the local audience.

Rosenberg: 1 – Winokur: 1

As of 2015, there was only 1 Mister Donut left in the United States in Godfrey, Illinois.

While 1 store is a far cry from their heyday in the 1980’s…perhaps the ghost of Winokur will come back to haunt Dunkin’ 👻

Time will tell…


FRANCHISE HEADLINES

Taco Bell Franchisee Adds 39 Stores to Portfolio

Quick service restaurant franchise operator Southpaw acquired 38 existing Taco Bell stores and one KFC unit in the Atlanta area, bringing the franchisee’s total number of Taco Bells to 115.

Southpaw also owns 65 Dunkin’ units and reports annual sales of around $300 million. Terms of the deal weren’t disclosed. In 2021, Southpaw bought 34 Taco Bell restaurants in Delaware, Virginia and Maryland from the same seller. Co-CEO Judd Wishnow founded the company with his now-wife, Erica, in 2010 when the pair acquired 11 Dunkin’ stores in New York.

Future Looks Promising for Plant-Based Products, Restaurants

A gargantuan amount of growth is expected in the plant-based food market this decade, giving restaurants with a non-meat focus plenty of optimism.

According to Bloomberg Intelligence, the market for plant-based foods, which was $29.4 billion in 2020, is expected to surpass $162 billion in 2030. Additionally, the global vegan market size is also projected to increase from $23.3 billion in 2020 to $61.3 billion in 2028, Fortune Business Insights found.

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