Dunkin' plots national push

PAWTUCKET, R.I. -- A glimpse of the Dunkin' Donuts of the future can be found here.

Dunkin' Brands Inc. executives said yesterday they plan to rely on multiple formats to rapidly expand to nearly 15,000 US locations by 2020, up from about 5,000 today. That can range from gas stations to carts to Dunkin' stores inside supermarkets and other retailers. But two-thirds of the new Dunkin's will likely resemble a prototype store the company opened here last November.

With a smaller footprint and a warmer color scheme, that includes tans and browns, as well as the brand's signature pink and orange, the hope is that the prototype becomes the workhorse of the company's nationwide expansion.

The store features a more open design to better showcase newer products -- such as breakfast pizza, and gourmet cookies and brownies. Cookies and brownies are supposed to give a jolt to Dunkin' Donuts' afternoon business. About 65 percent of the $3.8 billion in sales of US Dunkin' stores last year came before noon.

``We think there's a runway ahead," said chief executive Jon Luther, referring to the ability of the Dunkin' brand to take off.

Pushing multiple formats comes as new owners take the reins of Dunkin', which has its headquarters in Canton. Bain Capital and Thomas H. Lee Partners, two of Boston's largest buyout companies, and the Carlyle Group of Washington, D.C., bought Dunkin' and sister brands Baskin-Robbins ice cream and Togo's sandwich shops for $2.43 billion earlier this year.

Dunkin' isn't just expanding its geography but also its menu offerings.

In April, Dunkin' introduced a new smoothie yogurt drink, backed by heavy advertising. It is the biggest product launch since the chain added espresso drinks to its menu in 2003. Another product on the test list? Ice tea.

In its bid to go nationwide, Dunkin' faces fierce competition from java giant Starbucks, as well as McDonald's, which introduced gourmet coffee in its restaurants last year. Dunkin' is heavily concentrated in the Northeast. For example, there are 1,100 Dunkin' Donuts within a 50-mile radius of Boston, or one for every 5,600 residents in that region, the company claims.

Dunkin' expects to open 650 new stores in the United States in its next fiscal year, 50 more than in its current fiscal year. In the near term, expansion will focus on markets in Cincinnati; Nashville; Jacksonville, Fla.; and Indianapolis, executives said.

To fuel growth in new markets, the company hopes to recruit entrepreneurs with franchisee experience as well as existing Dunkin' franchisees who have the capital and expertise to operate 10 to 25 or more stores.

For Dunkin', the new prototype store represents a chance to boost profitability by shrinking the store size to 1,850 square feet instead of the typical 2,250 square feet. Some of the new stores could even be smaller at roughly 1,200 square feet.

The Pawtucket prototype also features a fix-your-own coffee station where customers so inclined can add milk or sugar themselves. Currently coffee is prepared by Dunkin' Donut employees.

The store also has a drive-through lane with two windows. That means, during rush hour, customers stop at both windows, paying at the first and getting their order at the second. That can knock 20 seconds off a 150-second drive-thru transaction, a big deal for a brand that emphasizes speed and convenience, said executives.

And while many Dunkin' Donut stores in New England have televisions turned on to CNN, the Pawtucket store doesn't have a TV, but has soft rock Muzak piped through with songs by the likes of Michael Jackson and U2.

Music, said Dunkin' chief Luther, ``was the number one request we had from customers."

Yesterday, as Dunkin' executives showed off the prototype, two machinists stopped by for an afternoon break. ``It's not bad," declared Bernard Barney, 37. ``It's nice," added Kevin Hobday, 46. ``It's clean."

Is Dunkin's new prototype an attempt to look more like rival Starbucks?

Said Joe Scafido, chief creative and innovation officer of Dunkin' Brands: ``New stores will have no fireplaces, no couches, or WiFi connections."

Chris Reidy can be reached at reidy@globe.com.