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The Boston Globe this morning reports that Dunkin’ Donuts is facing more than 350 franchisee lawsuits, as it is accused “of aggressively targeting shop owners in an effort to terminate store agreements and collect hefty penalties for alleged contract violations.” One of the lawyers for the plaintiffs says that Dunkin’ Donuts “has turned its loss prevention department into a ‘profit center’ and gone after franchisees for infractions that include improper tax filings, unauthorized transfers of the business, and cracked floor tiles, among other claims, as a way to increase revenues during the economic slowdown.”

The story says that Dunkin’ Donuts management defends itself by saying that “all employees and franchisees are held to the highest standards of professional and ethical contact and the company maintains the right to pursue legal action to remove franchisees who are in violation of any local, state, or federal laws. The business, which has 2,000 franchisees, said any legal action it takes is intended to protect all shop owners and ensure that customers have a consistently outstanding experience.”

Dunkin’ Donuts has some 2,000 franchisees – which means that the lawsuits are coming from roughly one-sixth of its franchisee base.
KC's View:
If they start cracking down on Dunkin’ Donuts with cracked floor tiles, there’s going to be a problem with the store count.