Franchisee Highlight - November 2005

Management MD, Miami and Miami Beach

Next time you're passing by Miami's Jackson Memorial Hospital, stop in for coffee and donut therapy. David Abromovitz and Michael Lefkowitz run a Dunkin Donuts store right on the hospital's property.

It comes as no surprise that coffee is the biggest seller at the hospital, what with all the doctors and nurses working long shifts at all hours of the day and night. But the partners say that in Miami and Miami Beach -- unlike many areas of South Florida where franchisees feel they're mostly in the beverage business -- the donut is still king. "At Jackson, coffee accounts for about 60 percent of sales -- that's above the average in the Miami area," Michael says, adding, "In our market, coffee represents 42-44 percent of gross sales."

The way Michael sees it, a Dunkin Donuts franchise offers the best of both worlds: "Unlike Starbuck's, we have a variety of baked goods to compete with the coffee. Unlike Krispy Kreme, we have a variety of baked goods and better coffee -- the best coffee!" Even at stores where pastries and ice cream take the lead, “coffee will always be there,” he says. The most popular versions in the Miami area, he adds, are regular coffee, latte and cappucino. Iced coffee is also a big seller, especially in the summer.


David and Michael, Miami Beach residents who were friends for more than two decades before becoming business partners two years ago, developed their Biscayne store, a Dunkin Donuts/Baskin-Robbins combo, at 5130 Biscayne Boulevard, a year ago. Their other two franchises are Dunkin Donuts only, at 901 NW 17th St., Miami and 1606 Alton Road, Miami Beach. The Biscayne store was the only new construction they've been involved with. They purchased the Jackson Memorial store and the one in Miami Beach. The latter, which had been closed a year and a half, reopened in May. A fourth store is being remodeled and others are in the pipeline. They expect to open five more over the next few years.

The partners had both been fans of the Dunkin Donuts brand for many years. When they decided to join forces, their complementary business skills quickly led to a successful enterprise. Michael, originally from Queens, New York City, has a background in real estate and hotel management that serves him well in his current role overseeing day-to-day operations. "I visit each store each day, taste a donut in each, see that they're properly staffed and training is going on, check receipts and deposits," he says.. David, a Miami native, has legal experience that prepared him to handle store location, development and marketing. He says he was enthusiastic about becoming a Dunkin Donuts franchisee in his hometown because he "saw an opening in terms of lack of development, sort of a vacuum here."

David notes, "There's a difference between selling coffee and donuts versus ice cream ... At Baskin-Robbins, you want to give the customer a more relaxed experience than they get at Dunkin Donuts. Let them taste samples and give them plenty of time to decide on what they want. That
> will increase customer satisfaction and increase sales."

He shares his insights on what makes a good location: "If it's Dunkin Donuts by itself, look for a busy street on the morning side of the traffic ... I prefer a corner after a traffic light, a neighborhood in a growth area. Are there other business or commercial infrastructures that draw people to you, like Publix or schools? Downtown where there's mostly pedestrian traffic, you need to feel your way for a busy location by going there, hanging around, seeing who walks by." Potentially profitable downtown locations, he says, include those "within already established buildings or with auto traffic leading into town."

Becoming well situated is just the first step. "The heart and soul of the business is operating it well," David points out. He cautions newcomers, "You don't want to rely just on the brand." Michael agrees: "The way to profit is to sell quality products at a reasonable price so customers -- guests -- perceive value and create customer loyalty...”

The partners emphasize friendly, courteous service. When hiring, Michael says, they look for “a people person, someone honest, loyal, dependable, clean and eager to learn.” As David puts it, “We're not just selling coffee -- we're giving people an experience ... a smile, a friendly hello, a thank you, the willingness to listen. A server has to have a great personality and do little things to make people feel better about being in the store." "Dunkin Donuts does an excellent job for training," Michael adds, with classes for shift supervisors, store and shift managers as well as courses in human resources and food safety.

Both men are happy to offer new franchisees the benefit of their experience.

Michael advises newcomers to "really take a look at not just the product but the company behind the product, and the people you're going to be working with, who your support staff would be." He adds he can always count on his franchise service manager for good support. Start-up challenges include construction and financing. Michael discovered that construction is a complicated proposition, requiring lots of interaction and communication with the architect and the contractor as well as making the right decisions about types of equipment. He also advises, "Make sure you have ... attorneys and accountants who understand this business and will protect your interests," and "Find a good lender who understands and lends Dunkin Donuts ... and make sure vendors are paid promptly."

The partners also want newcomers to know the satisfaction of a well-run franchise is well worth all the hard work. David notes, "People like coming to Dunkin Donuts/Baskin-Robbins. It's a happy experience. It's fun to come into the store and talk to the customers. If you understand that psychology, you can build on that and get more people coming into the store."
Even Hurricane Katrina couldn't keep these franchisees' loyal customers away. David recalls, "During Katrina we were fortunate enough to maintain power. The baking plant in Hialeah lost power so there were no donuts. We had a plan for closing. But the day after the hurricane, we were the only place open. People waited 45 minutes happily to get their coffee, muffins and bagels."