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Dunkin Donuts Case I. INTRODUCTION In this modern day context, the organizations usually prefer the option of franchising stores. However, it would be vital to mention that there are certain issues that can be associated with franchising stores. These might include moral hazards and adverse selection of franchise partners among others (Karle and Staat, “Signaling Quality with Initially Reduced Royalty Rates”)…
With this concern, the essay will qualitatively along with financially analyze and recommend better implementation strategies for DD in addressing and mitigating the aforementioned issues. II. DUNKIN DONUTS AND TOMMY’S FRANCHISE STORE ANALYSIS Tommy can be apparently observed as serving a franchise owner of DD for more than 17 years. However, as days passed, the performance of Tommy’s store declined as per the standard of Customer Satisfaction Guide (CSG). This eventually resulted in deteriorating the franchisee standard of DD. Besides, DD has also been making complaints against Tommy about his non-payment of fees to DD within the stipulated time period. Thus, considering the aforementioned situation, it can be affirmed that DD should disenfranchise its affiliation with Tommy and restructure the store into a company-owned establishment. The company-owned store would certainly assist DD towards making greater sales through having greater control over the operational functions (Trefis, “How Important Are Company Owned Stores to Mcdonald’s Stock ?”). However, prior to making this decision, certain options that have been provided to this situation require to be analyzed. These options have been elaborated hereunder. 1) Maintaining Tommy as Franchisee. ...
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