independent joe magazine february 2013 #18
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February 2013 • Issue 18 We Communicate, We Educate, We Advocate!
Pennsylvania Shop Has A Legacy of Connecting Its Community by Stefanie Cloutier
Franchisee Bryce Bares Brings
Dunkin’ to Nebraska by Betsy Lawson
This Isn’t Bill Rosenberg’s Dunkin’ Donuts Anymore... by Adam Goldman
Tax Changes for 2013 – What it Means for You by Stefanie Cloutier
National DCP’s Phoenix Facilityto Drive Western Expansion by Cheré Coen
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2 Independent Joe • February 2013
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This Isn’t Bill Rosenberg’s Dunkin’ Donuts Anymore…
by Adam Goldman
When Bill Rosenberg opened the first Dunkin’ Donuts in 1950, the menu was not a major consideration. Rosenberg offered customers great tasting coffee and donuts, and the people who lived and worked near Quincy Mass. began a tradition of starting their mornings off with this staple. For almost two decades Dunkin’ was primarily known for cof-fee and donuts. It was not until 1978 that the first major menu change oc-curred with the addition of muffins.
In the mid to late 20th century, the standard American breakfast consist-ed of eggs, bacon, toast and coffee, enjoyed at home. In the 1970’s and 80’s, as more women entered the workforce, the traditional at home breakfast started falling out of style. No one had time to cook a traditional breakfast. Recognizing the need for a quick, on-the-go breakfast offer-ing, McDonalds introduced the Egg McMuffin.
It wasn’t until the mid 90’s that Dunkin’ begun offering breakfast sandwiches. While it was well before my time, franchisees have told me the products were just “ok.” Some de-scribed them as, “A synthetic tasting egg on a soggy English muffin.” If it wasn’t for the coffee, most customers would probably have bypassed them completely.
Since that time, Dunkin’ has commit-ted to innovating its menu, adding new and better tasting products to the menu board. What’s more, Dunkin’ has successfully taken the traditional
FEbRuARy 2013 • INDEpENDENt JoE 3
My PerspectiveAdam Goldman
Phoenix DCP Center OpensCheré Coen
Pennsylvania Shop Has A Legacy of ConnectingIts CommunityStefanie Cloutier
DDIFO Calendar
Tax Changes for 2013 – What it Means for YouStefanie Cloutier
DDIFO Directoryof Sponsors
Bryce Bares Opens NebraskaBetsy Lawson
Index ofAdvertisers
3 4 7
811131726
Perspective
breakfast image and expanded the concept to drive sales throughout the day parts, into lunch, dinner and late night snacks. In the last five years our menus have expanded to offer flatbread sandwiches, tuna and chicken salad, plus a multitude of breakfast Lto’s and, now, the bakery sandwich line.
With the expanded menu come expanded operational challenges. Franchisees spend more on food, inventory and electric usage—plus a significant increase in labor costs.
We have to juggle the work sched-ule to accommodate at least one—and sometimes two—additional people at the sandwich station both in the morning and afternoon in order to meet the increased volume and accommodate the brand’s two-minute service standard.
Recognizing this challenge, Dunkin’ has done an excellent job over the last 16 months consolidating food inventory and creating new menu items that allow franchisees to con-trol food costs. For example, fresh bakery sandwiches that are made to order cost less than the old frozen, pre-made flat breads; French rolls can be used for both breakfast and lunch items; and the big N’ toasted lets operators reuse the texas toast for the grilled cheese sand-wich (which also uses the existing cheese SKu).
Customers are responding favor-ably to these changes. Dunkin’ now offers a menu covering most day-
parts—providing customers with a wide variety of items that are tasty, filing and priced right. In addition, the DDSmart menu offers a multitude of healthy offer-ings, helping differentiate Dunkin’ from its competitors.
Not a day goes by that I don’t hear a customer asking if it’s too late to get a breakfast sandwich. this proves that Dunkin’ has successfully changed how customers view our menu. they know we really have a varied, full-day menu.
I don’t know if bill Rosenberg would rec-ognize his own concept 63 years later, but I am convinced he would be pleased how Dunkin’ has morphed from Amer-ica’s best loved coffee, to America’s all-day, everyday stop for coffee, baked goods and great tasting sandwiches.
Adam Goldman is a DD franchise owner with a successful multi-store network in upper New Jersey. Contact him at njddonuts@gmail.com.
MY
4 INDEpENDENt JoE • FEbRuARy 2013
DDDDDDDDDDDD
February 2013 • Issue #18Independent Joe ® is published by DD Independent Franchise owners, Inc.
Editors: Edwin Shanahan, Matt EllisContributors: Stefanie Cloutier, Cheré Coen, Adam Goldman, betsy Lawson
Advertising: Joan Gould • Graphic Design/Production: Susan petersen
Direct all inquiries to:DDIFO, Inc. • 150 Depot Street • Bellingham, MA 02019
508-422-1160 • 800-732-2706 • info@ddifo.org • www.ddifo.orgDD Independent Franchise Owners, Inc. is an
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the new DCp 65,000-square-foot distribution center opened in phoenix in october and now provides food, paper and equipment supplies to more than 100 Dunkin’ Donuts res-taurants in the southwestern states, according to Kevin bruce, CEo of National DCp. the phoenix center is the first located west of the Missis-sippi and the seventh warehouse in the National DCp (NDCp) network.
until this past fall, the southwestern restaurants had been serviced out of Mokena, Ill.
“I’ve never seen that in my experi-ence,” bruce said of the vast western territory and network of franchises serviced from Mokena. “And it was expensive.”
Dunkin’ brands (DbI) is dedicated to expanding westward and the new phoenix facility is a vital step to servicing this expansion. In January, 2012, NDCp and DbI signed a long-term, performance-based agreement for NDCp to be the exclusive supply chain provider for all Dunkin’ Donuts restaurants in the continental united States. the agreement backs the brand’s desires to expand into new markets as well as offer the same product costs to western franchisees as in the more established Dunkin’ Donuts markets on the East Coast and Midwest.
Phoenix continued on next page
Last fall, DbI announced its plans to open 25 new Dunkin’ Donuts restau-rants in texas with the first Houston
restaurant opening this year. More recently, Dunkin’ announced it will expand into Southern California.
In a press release announcing the Southern California expansion, Dunkin’ brands CEo Nigel travis
said, “Expansion to Cali-fornia has always been part of our plan to grow Dunkin’ Donuts’ pres-ence in the u.S. We have maintained our disciplined
approach to expand steadily while focusing on initiatives to improve restaurant economics and franchi-
National DCP’s Phoenix Facility to Drive Western Expansion by Cheré Coen
The National DCP’s new facility in Phoenix will eventually supply franchisees in seven
western states.
The new Phoenix facility is a vital step in Dunkin’ Brands’ dedication to westward expansion.
FEbRuARy 2013 • INDEpENDENt JoE 5
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Phoenix continued from page 4
see profitability. these initiatives include our recent agreement with our franchisee-owned and operated distribution and procurement facility, which ensures the same cost of goods to franchisees in both established and new markets by 2015.”
291 new Dunkin’ locations opened in the u.S. in 2012. the ultimate goal is to have more than 15,000 Dunkin’ Donuts restaurants nationwide, and new distribution outlets will work to lower prices, bruce explained.
“the idea of the phoenix center was to be in a posi-tion to support where the brand wanted to go, which was the western seven,” bruce said.
the phoenix DCp distribution center is now servicing texas, New Mexico, Colorado, Nevada, Arizona and Camp pendleton in Southern California with future plans to include utah and Cali-
fornia restaurants from Los Angeles to the bay Area. bruce says expansion in the northwest would likely require another facility.
Birthing Painsthe upside of the phoenix facility — offering freezer, cooler, dry space and office — is the closer proximity to southwestern stores, bruce said. “And we’re able to respond more quickly.”
Currently, phoneix offers 800 stock-keeping units (SKu) to Chicago’s 2500 SKus, which means inventory is limited. bruce insists many of these items are parts and equipment and “slower-moving items.”
“We’re still adjusting,” bruce said. “More items are available. We had
some difficulty at first. Some stores came online and carried items we didn’t have.”
Jordan Eads, Dunkin’ Donuts district manager in Colorado Springs, has nothing but praise for the price points, delivery and customer service at the phoenix DCp—and for Scott besnyi, the facility’s operations manager— but expressed early concerns regarding the quantity of items available.
“Scott bends over backwards on the back end,” Eads said. “the customer service is great, everything else is fine, but the quantity is an issue.”
National DCp Chief operating officer Kevin Mellifont agrees the quantity of products was limited when the phoe-nix facility first opened.
“We did have start up issues that hampered ability to reach our normally high level of service right away. but, Scott has done a great job of taking on
Phoenix continued on page 6
The Phoenix DCP earns praise for the price points, delivery and customer service.
6 INDEpENDENt JoE • FEbRuARy 2013
Conveniently located near Interstate 10 and several other highways, the Phoenix DCP previously housed a Jack-in-the-Box distribution center.
those challenges and solving the issues,” he said.
Dunkin’ Donuts’ western expansion will mean greater density in still-undeveloped areas—like texas, California, Colorado, Wisconsin and Nebraska. As more stores open in the West, this “density” will help to improve inventory issues, as well as price points, bruce said.
“We welcome western expan-sion,” he said, “the sooner the better. We’re constantly balanc-ing that out. Cost will go down with new density. And anytime costs are reduced, every-one benefits.”
bruce calls the phoenix and Mo-kena distribution centers “a classic
Phoenix continued from page 5
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EMPLOYEES DUNKIN DONUTS
Phoenix continued on page 24
FEbRuARy 2013 • INDEpENDENt JoE 7
Mosaic continued on page 9
but in the middle of all this vast space, the roads leading from the different towns all converge on the corner where bower has his Dunkin’ Donuts. “When I looked at that building, I knew that’s where I wanted to go,” said bower. “It’s on the way for everybody.”
unlike towns with dense populations, where people are frequently passing by and congregating in retail areas, Muncy’s geography makes a casual stop at a coffee shop a little more challenging. Says bower, “you have to run stores in a way that brings people in more than once a month – you have to execute at a high level.”
The mural (above) illustrates Muncy’s early days when donkeys and canal boats moved goods through the region.
by Stefanie Cloutier
Pennsylvania Shop Has A Legacy of Connecting Its Community
Pennsylvania Shop Has A Legacy of Connecting Its Community
on the wall in Ann Caruso’s family room hangs a pastel of a conservation area in the town where she lives. She loves it not because the colors match the ones in her rug, though that’s nice, too, but because it’s a walk she has taken with her husband and kids many times. It’s the feeling she gets when she looks at the picture, a feeling of belonging and joy, that make that particular picture the absolute right one for the room.
that’s the feeling Jim bower was going for when he commissioned a mosaic for his refur-bished Dunkin’ Donuts store in Muncy, penn-sylvania. “I wanted to create a meeting place,” Jim says, “a place that everyone in the area would want to go.” And he wanted to infuse it with artwork that would speak to the community. A community that is primarily rural, one that goes back hundreds of years, with a population that is fairly spread out.
bower is a thoughtful man, one who clearly cares about more than just serving the best coffee and donuts around. He thought carefully about how his shop should integrate into its community.
All Roads Lead HereMuncy is actually three small communities, each with about 4000 residents, spread over a wide area of rural pennsylvania. According to bower, you can drive for miles and miles seeing nothing but rolling farmland, certain you’ve gone the wrong way, when –suddenly— a store pops up and you breathe a sigh of relief, knowing you’re not lost.
Bower wanted to create a meeting place where everyone in the area
would want to go.
8 INDEpENDENt JoE • FEbRuARy 2013
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FEbRuARy 2013 • INDEpENDENt JoE 9
Mosaic continued on page 25
Mosaic continued from page 7
So bower set about making his shop a destination, a place people would want to make an effort to get to, as well as one that would attract people driving from one town to the next. He began by completely gutting the building, and then creating an attrac-tive meeting place, with a soaring ca-thedral ceiling and a fireplace. Much different from the urban stores most people are used to.
Given the area’s rich history, bower went to the historical society to fold that aspect into his shop. According to bower, this is an area with pride in its history, its farming background, so much so that even as small as their population is, they have a museum in town, one that com-memorates their com-munity. He wanted to honor that in his shop.
Connecting Through ArtLucky for bower, the historical society gave him access to a number of old, old pictures of the town in its early days, which he had professionally reproduced and framed to hang on the walls. And when he wanted something special to fill the space over the fireplace mantel, something appropriate to the his-tory of the community, the historical society obliged with an original 1852 painting of Muncy Valley. It was the first time in 160 years that someone had been allowed to make a copy of that painting.
bower not only copied it - and hung the piece over the mantel in his Dunkin’ shop - he gave the negative to the community for them to use to make posters and postcards to sell. Just another way for bower to support the community that would eventually support his store.
Still, even with all these great photos and prints, bower had a bigger wall to fill: the six by twenty foot flat wall in his cathedral ceiling area. A wall that
needed something much bigger and much more eye-catching. So bower approached two local, well-known
Local artwork helps make the Muncy
shop an attractive meeting place.
artists and asked them to fill the wall with an historical picture.
the artists, Nella Godbey Storm and Selinda Kennedy, have worked
10 INDEpENDENt JoE • FEbRuARy 2013
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Tax Changes for Individualsthe majority of the changes are pri-marily aimed at individuals, namely your employees. Which means that it affects you, since many of them may have questions.
the most visible, and immediate, change is the expiration of the 2%
payroll tax Cut, a change obvious on every em-ployee’s paycheck as of the beginning of the year. the former rate for employee social secu-
rity tax withholding had been held at 4.2%; unless Congress acts to
$Tax Changes continued on page 12
Among the many challenges of own-ing a small business are the year-to-year tax changes that can affect your bottom line and complicate your accounting. And this year was especially anxiety inducing as Con-gress and the president wrangled over a plethora of expiring tax breaks until the last moments of 2012, leav-ing individuals and business owners unsure of what to expect as they rang in the New year.
And after the bargaining ended and the dust had cleared, the good news is that not much has changed for small business owners.
that’s great news, especially as one of the major changes expected was the amount business owners would be able to write off as a busi-ness expense with regards to their equipment. the existing amount of
$500,000 was anticipated to decrease to just $25,000, a pretty major decline. Given that franchise owners are required to renovate their stores every five years, a change of this magnitude would require com-pletely rethinking how to classify equipment as an asset.
to defend against this, owners would have had to hire an engineering firm or architect to do a segregation study, adding to the cost of renovating or building new. With the deal struck in the waning hours of 2012, this write off stayed at $500,000, making con-struction a little less onerous.
So just what did change, and how will it affect you in the coming year?
Tax Changes for 2013: What it Means for You by Stefanie Cloutier
$
12 INDEpENDENt JoE • FEbRuARy 2013
Tax Changes continued from page 11
Tax Changes continued on page 15
extend that lower rate, the new rate of 6.2% will stand.
And while franchise owners didn’t cause this change, it certainly affects them, as employees question what happened to their paychecks.
“I’m afraid to walk into my stores,” said one franchise owner. “My employees all want to know why they suddenly have less money in their paychecks. As you can imagine, they’re pretty upset.”
It’s not easy to explain to workers, many of who make minimum wage, that the 4.2% rate was always meant to be temporary, that it was put in place back in December of 2010 as a “payroll tax holiday” designed to stimu-late spending. It was only supposed to last one year, and was instead extend-ed through December 2012.
this money goes directly to the sup-port of Social Security, which ultimately will go back to workers, hopefully,
when they retire. but that doesn’t mat-ter right now, when it directly affects the amount they take home, which in turn affects how they feel about their jobs and their employers.
Employers have until February 15, 2013, to implement this change, and until March 31, 2013, to correct any underwithholding.
the rest of the changes – including the increase in the standard deduction and personal exemption – will only be seen once workers file their taxes for 2013, a whole year from now, meaning few will notice their tax benefits, instead only seeing the one liability.
on February 11, New Jersey Governor Chris Christie vetoed a bill calling for a $1.25 increase in the state’s minimum wage and, instead, proposed a one dollar increase to phase in over three years. Franchise owner Shub Hegde, who was part of a delegation of local Dunkin’ Donuts franchisees that met with advisors to the Governor in Janu-
ary, says this is a much better outcome for small business owners.
“We are still concerned over a pro-posed cost of living adjustment (CoLA) tied to the minimum wage,” he said. “but we are happy with the Governor’s veto. I would rather the legislature con-sider a gradual increase, say, of .25 yearly,” says Hegde, “but a one time increase of that kind of number, I’ll end up losing a lot.”
In a business where minimum wage is the norm, this kind of change is one all franchise owners have to pay attention to.
Future Planningone aspect of the new tax laws that hasn’t gotten as much press is the im-pact on the estate tax. At first glance, this may not seem as important as how you fill out your tax returns, but in the long run, it could have a size-able impact on how you do your estate planning. particularly if you own sev-eral stores.
FEbRuARy 2013 • INDEpENDENt JoE 13
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Joyal Capital Management Franchise Development50 Resnik Road, plymouth, MA 02360Daniel Connelly • dconnelly@joycapmgt.com508-747-2237 • www.jcmfranchise.com
AccountingAdrian A. Gaspar & Company, LLP, CPAs1035 Cambridge Street, Suite 14, Cambridge, MA 02141Robert Costello • cpas@gasparco.com617-621-0500 • www.gasparco.com
Bederson & Company LLP - CPAs and Consultants405 Northfield Avenue, West orange, NJ 07052Steven bortnick, CpA • sbortnick@bederson.com 973-736-3333 • www.bederson.com
Cynthia A. Capobianco, CPA60 Quaker Lane, Suite 61, Warwick, RI 02886-0114Cynthia Capobianco • 401-822-1990cynthia@capobianco.necoxmail.com
Rubiano & Company, CPA’s5 Austin Avenue, Suite 1, Greenville, RI 02828Daniel J. Rubiano, CpA • dan@rubianocpa.com401-949-2600 • www.rubianocpa.com
Sansiveri, Kimball & Co., LLP55 Dorrance Street, providence, RI 02903Joseph Mansour • jmansour@sansiveri.com401-331-0500 • www.sansiveri.com
Thomas Colitsas and Associates, CPA103 Carnegie Center, Suite 309, princeton, NJ 08540tom Colitsas • tcolitsas@tcacpa.com • 609-452-0889“A Member of Franchise Pros”
Back Office Jera Concepts - Order and Production Management Software17 Fruit Street, Hopkinton, MA 01748Wynne barrett • wynne@jeraconcepts.com508-686-8786 • www.jeraconcepts.com
Building Trane HVAC225 Woldwood Avenue, Woburn, MA 01801Jonathan Ralys • Jonathan.Ralys@trane.com781-305-1335 • www.trane.com/commercial
ViewPoint Sign and Awning35 Lyman Street, Northboro, MA 01532bill Gavigan • billg@viewpointsign.com508-393-8200 • www.viewpointsign.com
WatchFIre Signs1015 Maple Street, Danville, ILDevon Mourer • devon.mourer@watchfiresigns.com217-442-0611 • wwwwatchfiresigns.com
Business Broker Kensington Company & Affiliates185 Roslyn Road, Roslyn Heights, Ny 11577David Stein • kstein@kensingtoncompany.comW: 516-626-2211 • M: 718-490-2218 • www.kensingtoncompany.com
CML OperationsMid-State Isuzu35 Southwest Cutoff, Worcester, MA 01604Craig Judge • craig@midstateisuzu.com860-281-4117 • www.midstateisuzu.com
CommunicationsComcast Business Services500 South Gravers Road, plymouth Meeting, pA 19462Comcast National Sales • Dunkin_National_Sales@comcast.com866-407-6338 • www.business.comcast.com/internet/index.aspx Thank You to Our Sponsors!
Sponsors continued on page 14
Directory of SponsorsPlease Visit The DDIFO Sponsor Directory online at: www.DDIFO.org
14 INDEpENDENt JoE • FEbRuARy 2013
Merchant Cash & Capital450 park Avenue South, 11th Floor, New york, Ny 10016Seth broman • sethb@merchantcashandcapital.com212-545-3185 • www.merchantcashandcapital.com
NFA Restaurant Finance400 E. 22nd Street, Suite A, Lombard, IL 66148Larry Howard • lhoward@nfaloans.com205-871-8450 • www.nfaloans.com
Priority Capital174 Green Street, Melrose, MA 02176brian Gallucci • bgallucci@priotiycapital.com800-761-2118 Ext 14 • www.prioritycapital.com
Susquehanna Commercial Finance2 Country View Road, Suite 300, Malvern, pA 19355brian Colburn • brian.colburn@susquehanna.net443-996-1792 • www.susquehanna.com
TCF Franchise Finance300A Lake Street, Suite b, Ramsey, NJ 07446Mike Vallorosi • mvallorosi@tcfef.com201-818-2700 • www.tcfef.com
TD Bank40 Danbury Road, Wilton, Ct 06857brian Frank • brian.frank@td.com203-761-3818 • www.tdbank.com
United Capital Business Lending215 Schilling Circle Suite 100, Hunt Valley, MD 21031trey Grimm • tgrimm@ucbl-inc.com410-771-9600 • www.unitedcapitalbusinesslending.com
Sponsors contIinued on page 22
Food Products CSM Bakery Products1901 Montreal Road, Suite 121, tucker, GA 30084Marla Cushing • marla.cushing@csmglobal.com770-723-2083 • www.csmbakeryproducts.com Quaker Oats A Division of PepsiCo402 Kilarney Way, Royersford, pA 19468Ed bowes • Ed.bowes@pepsico.com610-948-8309 • www.pepsico.com
Human Resources CareerBuilder.Com 400 Crown Colony Drive, Suite 301, Quincy, MA 02169Maureen o’Neill • maureen.oneill@careerbuilder.com781-453-3570 • www.careerbuilder.com
Employers Reference Source1587 Hamilton Avenue, Waterbury, Ct 06706Sandra Fabrizio • sandra@employersreference.com888-512-2525 • www.employersreference.com
Gecko Hospitality 1415 West 22nd Street, tower Floor oakbrook, IL 60523 Robert Krzak • robert@geckohospitality.com 630-390-1000 • www.geckohospitality.com
Granite Payroll Associates176 Granite Street, Qunicy, MA 02169Marco Schiappa • marco@granitepayroll.com401-263-7921 • www.granitepayroll.com
Gulpfish.com1005 Main Street, pawtucket, RI 02860Ilya Reikhrud • ceo@gulpfish.com800-974-4514 Ext 101 • www.gulpfish.com
JobOn 141 Log Canoe Road, Stevensville, MD 21409pete Steiner • pete.steiner@jobon.com 774-217-0340 • www.jobon.com
Ovation Payroll2 Stamford Landing 68 Southfield Rd. #100, Stamford, Ct 06902Jim Ferreira • jferreira@ovationpayroll.com203-530-3512 • www.ovationpayroll.com
Snagajob4851 Lake brook Drive, Glen Allen, VA 23060Erin brumfield • ebrumfield@snagajob.com804-822-4604 • www.snagajob.com/employer-solutions
Insurance The Hill Agency5 Washington Avenue, Endicott, Ny 13760Rita Frailey • rfrailey.hilla01@insuremail.net800-446-1775 • www.thehillagencyinc.org
KK Insurance Agency541 broadway, Long branch, NJ 07740Ashish Vadya • ashish@kkinsuranceagency.com866-554-6799 • www.kkquote.com
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DDIFO® does not endorse or recommend commercial products, processes, or services. A DDIFO® sponsor is paying to advertise, and it is not to be considered a product or service endorsement by DDIFO®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.
Directory of SponsorsPlease Visit The DDIFO Sponsor Directory online at: www.DDIFO.org
FEbRuARy 2013 • INDEpENDENt JoE 15
Tax Changes continued from page 12
It’s never pleasant to think about what will happen to your assets once you die, but if you own multiple shops, it’s worth your while to do some planning. otherwise, everything you’ve worked for can get swallowed up in red tape instead of going to your heirs.
First, a little background: in 2001, president George W. bush enacted legislation to change the estate tax laws. over the past twelve years, the federal cap on the amount that could pass tax-free to heirs has fluctuated from $675,000 up to $5 million in 2010. the uncertainty around how that number might change in 2012 caused some people to rush to make tax-free gifts before the new year began.
All that has changed, with a perma-nent estate tax fix beginning in 2013: every individual now gets an estate tax exemption of $5.25 million per
2013 Tax Changes Affecting Your Employees
CHANGE NEW OLD Standard Deduction $6,100 for individuals $5,950
$12,200 for married $11,900 couples filing jointly
Personal Exemption $3,900 $3,800
Alternative Minimum $51,900 $50,600Tax $80,800 for married $78,750 couples filing jointly
Earned Income Credit $6,044 for taxpayers $5,891Maximum w/3 or more children
Transit Pass and $245 $240Transportation Exclusion
person, or a total of $10.5 million per married couple. Here’s the deal: it used to be, if you died, your heirs could inherit up to $5.125 million before having to pay a federal tax on the money. If you owned several Dunkin’ Donuts franchises, your estate could easily be worth more than that, meaning your heirs would now be paying taxes on money you’ve already paid taxes on, through your years of earning profits and running a business.
Now, with the new, permanent limit of $10.5 million per married couple, you have a much bigger cushion of how much you can leave to your children without needing to be concerned about the IRS wanting their share. you also can be fairly certain about this amount going forward, making estate planning that much less worrisome.
of course, the new law also increases the highest tax rate, so any amount over the $10.5 million will now be taxed at the higher rate of 40%, versus 35% last year.
“That’s great news.”Seth Ellis is an estate planning attorney with a number of Dunkin’ Donuts franchise owners among his clients; he sees this new limit affecting, and ultimately protecting, almost every owner. “It allows them to transfer real estate and assets to family, etc., without worry about an IRS audit,” says Ellis. “that’s great news.”
Ellis feels that this legislation will give franchise owners the incentive to take action and make future plans for their as-sets. “by creating trusts for the benefit of their spouse and children, they can lock in their money and allow apprecia-tion going forward,” he says. “they can have their cake and eat it, too.”
or their donut, as the case may be.
DDIFO SPONSOR ADVERTORIAL
R.F. Technologies, Inc. (RFT) provides Dunkin’ Donuts franchisees with complete drive-thru communication systems as well as digital surveillance solutions, music and
TV and digital menu boards. Two new products, the Protec-tive DuraGuard™ headset skin and the UniListen listen-only device, are now available.The company is committed to supporting its customers’ needs and offers 24-hour free technical support. RFT Creative Director Michelle Greenwood says the company is proud of the praise it receives. “Franchisees are amazed to see a headset back from repair in just three days. They also love dialing one number for customer service and hearing a real person on the other end of the phone. Most of all, they enjoy the significant price savings we offer.” DDIFO members are eligible for RFT’s affordable no-con-tract Unlimited Repair monthly maintenance program. Multi-store owners can enroll in the multi-store savings program and receive up to 20% savings on parts. Enrollment in both programs is free. For more information, contact National Sales Manager Mark Sullivan at marks@rftechno.com or 874-495-7400, or visit www.rftechno.com.
DDIFO SPONSOR ADVERTORIAL
The law firm of Paris Ackerman & Schmierer defends fran-chisees in litigation filed by Dunkin’ Brands; provides legal counsel on succession planning, asset protection and estate planning; and has handled tens of millions of dollars of acqui-sitions and sales of Dunkin’ networks.
“We are intimately familiar with the franchise agreement and have a firm grasp on a number of the legal and operational issues that Dunkin’ Donuts franchisees face. Our positioning and experience with the Brand allows us to provide unparal-leled legal services in an efficient and cost-effective manner,” said founding partner David S. Paris.
Among its current undertakings, the firm is handling 1031 asset exchanges, where franchise owners selling their net-works can defer paying taxes on their gains.
Paris Ackerman & Schmierer offers free consultations and discounted rates to DDIFO members, and is beginning a program where, in certain situations, it will rebate a portion of clients’ legal fees to be applied toward DDIFO memberships.
For more information, contact David Paris atDavid@paslawfirm.comor(973)228-6667, orvisitwww.paslawfirm.com
16 INDEpENDENt JoE • FEbRuARy 2013Bares continued on next page
*All programs and offers are subject to �nal credit approval by Direct Capital®. Applications must be processed through LendEdge by 12/2013. Processing fee of $125/location is �nanced with 90 daydeferred payment optionavailable for $25/fee per month. Finance options are available for remodel projects and new store projects under a separate �nance program. Please contact Direct Capital® for
eligibility and program terms. Dunkin’ Brands® trademarks and logos are registered trademarks of Dunkin’ Brands® and used with permission.
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FEbRuARy 2013 • INDEpENDENt JoE 17
Bryce Bares is returning to his home state of Nebraska and he’s bringing Dunkin’ Donuts with him.
“Several DDIFo members have told me that there’s never been a better time to be with the brand, and I believe them. Dunkin’ has been running television ads in my territory and building brand recognition even before I signed on,” bares
said.
His first store is under construction in papillion, a burgeoning suburb of 20,000 - and growing -
about 20 minutes southwest by car of omaha.
but he’s set a goal of opening nine restaurants in the next five years. His territory includes part of omaha, its southern suburbs, Lincoln (the state capital), and several rural com-munities along Interstate 80. Encouragement from friends and family, as well as several DDIFo members, has played a large role in his decision to put his experience as a prac-ticing attorney to the entrepreneurial challenge of running a franchise operation.
“there’s a lot of buzz in Nebraska about Dunkin’s re-entry into the market,” he said.
bares attended the Multi-unit Franchising Conference last year and met former DDIFo Executive Director Jim Coen who introduced him to a number of experienced franchi-sees. Coen recommended bares join DDIFo and attend last
by Betsy Lawson
There’s a lot of buzz in Nebraska about Dunkin’s re-entry into the market
Bryce Bares with his wife, Sara, and their two children. The Nebraska native is opening his first Dunkin’ Donuts shop in
the Omaha suburb Papillion. Below, walkers take advantage of one
of Papillion’s many nature trails
Bares says he has felt welcomed into the Dunkin’ franchisee community, and
that DDIFO has given him the opportunity to connect with
others in the business.
New Franchisee Prepares to Open Nebraska’s First Dunkin’
Bares continued on page 19
18 INDEpENDENt JoE • FEbRuARy 2013
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Limited time offer. Not available in all areas. Limited to Starter Internet and Business Class Voice service and service to a single outlet. Minimum 2 year contract required. Early termination fee applies. Custom installation charges may apply. Equipment, installation, taxes, franchise fees, the Regulatory Recovery Fee and other applicable charges (e.g., per-call or international charges) extra. May not be combined with other offers. Equipment required ($5/month). Internet: Actual speeds vary and are not guaranteed. Voice: $24.95 activation fee (per line, up to 4 lines) fee applies. Service (including 911/ emergency services) may not function after an extended power outage. Call clarity claim based upon August 2010 call clarity analysis by Tektronix. Call for restrictions and complete details. Comcast © 2012. All rights reserved.
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Bares continued on page 20
Cover Photos: Bryce Bares, photographed at Chicago Midway airport, is moving back to his roots to open his first Dunkin’ Donuts. Bares meets with restaurant manager Jeff Albertson.
Mayor David Black (left)encourages business owners to be active members of the community.
September’s National Conference at Mohe-gan Sun. bares says he felt welcomed into the Dunkin’ franchisee community, and that DDIFo gave him the op-portunity to connect with others in the business. He believes it will be an invaluable resource as he begins the process of launching his first shop.
things are already in motion. the site is under construction and slated to open later this spring. bares will attend Dunkin’ brands university in February/March and then make the move from Chicago back to Nebraska. He’ll prepare the way for his wife, Sara, and two small sons to follow in June. “Sara is a physician who will be joining the faculty at university of Nebraska Medical Center in omaha,” bares said, but unlike him, she’s a native New yorker.
omaha and its sur-rounding suburbs have been growing in recent years de-spite the recession, in part because of offutt Air Force base and that many multinational cor-porations set up regional headquar-ters in omaha. they include berk-shire Hathaway, ConAgra Foods, and tD Ameritrade. boston-based Fidelity Investments is building a $200 million data center in papillion that is sched-uled to come online in 2014.
Having so many transplants in the area is good for business because Dunkin’ is a known - and welcome - brand for many. And bares is no exception. He developed what he
calls a “healthy addiction” to Dunkin’ coffee while an undergrad at Amherst College in western Massachusetts and then as a law student at boston College.
After earning his J.D. in 2004, he moved to Columbus, ohio, to work as an attorney. He provided counsel on various facets of labor and em-ployment law to businesses of all sizes, including several Fortune 500 companies and QSR chains. He then advanced to the role of corporate counsel serving as business advisor
The Papillion Days Parade is a local
tradition dating back to 1947. The annual
June event is sponsored by the Papillion Community
Foundation.
Bares continued from page 17
to a small software start-up, provid-ing legal opinions of various industry issues. Columbus is a well-developed Dunkin’ market.
but bares had the entrepreneurial spirit. He moved to Chicago (another Dunkin’ stronghold) in 2006 and opened his own law firm, where he advised individuals and businesses in corporate formation, compliance, and employment law. He got noticed by city officials and was hired three
years later as assistant corporation coun-sel for the City of Chicago’s Department of Law within its Finance and Economic Development Division.
“Working for municipal government and watching the planning and development process from the inside has helped me work with local governments in Nebraska. It taught me to reach out to municipalities early, and to show them how a develop-ment will benefit the community.
“While a new Dunkin’ Donuts may not mean much to Chicago in terms of eco-nomic impact, it means a lot to most of the communities in Nebraska. So far, we’ve been welcomed with open arms,” bares said.
Going HomeNebraska has enjoyed a relatively low unemployment rate of around 3.7%, compared with other parts of the country, such as Chicago which hovers closer to 10%. Finding and retaining employees is one of bares top concerns.
but his location in papillion is a good one. there are nine colleges or universities
within a 20-minute drive as well as a high school in close proximity. All are excellent sources for workers looking for part-time hours. So, too, are military spouses who are
looking for supplemen-tal income when they first relocate to offutt Air Force base. Each branch of the uS mili-
tary is represented among the approximately 10,000 mili-tary and federal employees assigned there. His store will be located in an endcap on a new four-bay strip center across the street from a major commercial development that will include a number of national chains.
In terms of the current competition, bares believes his store will offer a better product and a better price point. Starbucks is in Nebraska. but so, too, is Scooter’s Coffee & yogurt that opened its first store in bares’ hometown of bellevue, which borders papillion. offering drive-through service for coffee and smoothies, the franchise has expanded to more than 90 stores in seven states with the goal of exceeding the 100-store mark in the near future.
Having a brand with national name recognition, however, is a huge advantage, bares said. It’s an advantage both from a hiring standpoint as well as welcoming in new cus-tomers who grew accustomed to Dunkin’ products where they used to live.
And then there are the old-timers from Nebraska who remember when Dunkin’ had presence there many years back.
“Even those who have never tried Dunkin’ Donuts know the brand. they are excited to try it. For those who tried the product back when Dunkin’ was in omaha, it will be almost an entirely new experience with the expanded menu offerings and the refinement of operations over the last 20 years.”
Having a brand with national name recognition is a huge advantage.
Papillion, 2 miles southwest of Omaha, is growing rapidly thanks to the region’s diverse economic base. Nine colleges and universities are located within 20 miles of here.
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Bares continued on next page 20 INDEpENDENt JoE • FEbRuARy 2013
Bares continued from page 19
FEbRuARy 2013 • INDEpENDENt JoE 21
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bares’ parents still live in his home-town of bellevue. “I still have many, many long-time friends in the area,” bares said. “this is a community where reputation matters. Everyone knows each other.”
He imagines former teachers, team-mates, and neighbors coming up to the counter. bares said everyone has been very welcoming and enthusias-tic about Dunkin’ coming and there has been a lot of cooperation from the town’s business and civic leaders.
David black is the city’s mayor, though his full-time day job is at a local bank.
“I want Dunkin’ in papillion,” black said, adding that he remembers the brand from when he was a kid. “If you’re coming into Nebraska, I want you coming through papillion.”
And he means it. When Atlanta-based Chick-fil-A was looking to enter the Nebraska market, it chose papillion.
Bares continued from page 20
Within three weeks of being open, that franchise owner was an integrat-ed member of the community, black said.
“We have a healthy business culture … [and] a high level of cooperation, trust, and support of residents for businesses here,” black said. but the expectation goes both ways, he said. business owners are expected to
give back by going into the schools, helping with the food pantry, and overall “being a part of the commu-nity.”
It’s a tight-knit community, black said, but welcoming to newcomers. “busi-ness owners are part of the communi-ty and they are valued. bryce is going to be part of that.”
bares said he’s looking forward to it. “In Nebraska, both business and personal success are tied heavily to community involvement. papillion is an amazing community, and we can’t wait to give back in whatever we way we can.”
Mayor David Black said Papillion is a tight-knit community, but welcoming to newcomers.
22 INDEpENDENt JoE • FEbRuARy 2013
InsuranceParis-Kirwan Insurance1040 university Avenue, Rochester, Ny 14607John Mulcahy • johnm@paris-kirwan.com585-473-8000 • www.paris-kirwan.com
RMS Insurance Brokerage, LLC575 Jericho tpke, Suite 102, Jericho, Ny 11753Donna Mis • dmis@rmsinsurance.com516-742-8585 • www.rmsrestaurants.com
Sinclair Insurance Group - Risk Management4 tower Drive, Wallingford, Ct 06492Matt ottaviano • mottaviano@sinclair-insurance.com203-284-3235 • www.srfm.com
Starkweather & Shepley Insurance Brokerage, Inc.60 Catamore boulevard, East providence, RI 02914Sabrina San Martino • ssanmartino@starshep.com800-854-4625 ext. 1121 • www.starkweathershepley.com
Wells Fargo Insurance Services2502 North Rocky point Drive, #400, tampa, FL 33607Mark Stokes • mark.stokes1@wellsfargo.com813-636-5301 • wfis.wellsfargo.com
LegalLisa & Sousa Attorneys at Law5 benefit Street, providence, RI 02904Carl Lisa, Sr. • clisa@lisasousa.com401-274-0600 • www.lisasousa.com
Paris Ackerman & Schmierer LLP101 Eisenhower parkway, Roseland, NJ 07068David paris • david@paslawfirm.com • 973-228-6667www.paslawfirm.com “A Member of Franchise Pros”
Vernis & Bowling of Palm Beach, P.A.884 uS Highway one, North palm beach, FL 33408tammy bouker • tbouker@national-law.com561-775-9822 • 561-775-9822 • www.national-law.com
Zarco, Einhorn, Salkowski & Brito, PA100 SE 2nd Street, 27th Floor, Miami, FL 33131Robert Zarco, Esq. • rzarco@zarcolaw.comRobert Salkowski, Esq. • rsalkowski@zarcolaw.com305-374-5418 • www.zarcolaw.com
Operations 3M Companybldg. 223-2N-20 St. paul, MN 55144Jim Sinclair • jwsinclair@mmm.com650-736-3836 • www.3m.com/xt-1
3 Wire Group, Inc.101 broadway Street West, osseo, MN 55369Derek Knapp • derek.knapp@3wire.com518-563-3200 • www.3wire.com
Access to Money ATM, Inc./Cardtronics 628 Route 10 - Suite 8, Whippany, NJ 07981Doug Falcone • dougf@accesstomoney.com973-599-0600 • www.accesstomoney.com
Belshaw Adamatic Bakery Group814 44th Street NW, Suite 103, Auburn, WA 98001Fran Kauth • fran_kauth@belshaw.com 206-718-3573 • www.belshaw-adamatic.com
Sponsors continued from page 14 Bunn-O-Matic Corporation 1400 Stevenson Drive, Springfield, IL 62703todd Rouse • todd.Rouse@bunn.com800-637-8606 • www.bunn.com
Cashmaster Cash Solutions2108 trving blvd., Dallas, tX 75207Jayson Dunston • jdunston@cashmaster-us.com214-747-1982 ext. 2 • www.cashmaster-us.com
Delphi/Fast Track 2+2 Drive-Thru Timer3500 West Moore Avenue, Suite M, Santa Ana, CA 92704Mike pierce • mike@phaseresearch.com714-850-1320 • www.fasttracktimer.com
DTT Surveillance1755 North Main Street, Los Angeles, CA 90031Mira Diza • mdiza@dttusa.com800-933-8388 • www.dttusa.co
Ecolab8300 Capital Drive, Greensboro, NC 27409Arliene bird • arliene.bird@ecolab.comwww.ecolab.com/businesses/
eCube5 Cold Hill Road, building 20, Mendham, NJ 07945Cardie Saunders • cardie.saunders@getecube.com888-99-ECubE • www.getecube.com
Grainger100 Grainger parkway Lake Forest, IL 60045Valerie Jenkins • valerie.jenkins@grainger.com503-887-6775 • grainger.com
Directory of SponsorsPlease Visit The DDIFO Sponsor Directory online at: www.DDIFO.org
FEbRuARy 2013 • INDEpENDENt JoE 23
Hi-Tech Sound53 brigham Street, unit 8, Marlborough, MA 01752Gary Hanna • gary@hitechsound.com508-624-7479 • www.hitechsound.com
HME Drive-Thru Headsets14110 Stowe Drive, poway, CA 92064brady Campbell • bcampbell@hme.com 858-535-6034 • www.hme.com
HS Brands International500 Myles Standish boulevard, taunton, MA 02780Michael Mershimer • mike@mershimer.com800-723-1150 • www.hsbrands.com
Jarrett Services ATM, Inc. 1315 Stelton Road, piscataway, NJ 08832Eric Johnston • ej@jarrettforcash.com732-572-0706 • www.jarrettforcash.com
LED Source402 Knights Run Avenue, Suite 150, tampa, FL 33602 Haitham Charles • hcharles010@ledsource.com813-279-2099 • www.ledsource.com
Macdonald Restaurant Repair Service, Inc.po box 61, 83 pond Street, Norfolk, MA 02056Mark & Debi Macdonald • debi@macdonaldcompany.com508-384-9361 • www.macdonaldcompany.com
Mint-X Corporation2048 199th Street, College point, Ny 11356Amie yee • ayee@mint-x.com877-646-8224 • www.mint-x.com
Muzak3318 Lakemont boulevard, Fort Mill, SC 29708Joanna barrett • joanna_barrett@muzak.com803-396-1656 • www.muzak.com
New England Drive-Thru Communications12 Wildwood Road, Auburn, NH 03032Angela bechard • angela@nedrivethru.com888-966-6337 • www.nedrivethru.com
New England Repair Service - a div. of New England Coffee Co.100 Charles Street, Malden, MA 02148Jerry brown • jerry.brown@necoffeeco.com781-873-1536 • www.nerepairservice.com
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– Matthew Tenore, Dunkin’ Donuts® Brockton, MA
Dun
kin’
Don
uts®
is a
regi
ster
ed tr
adem
ark
of D
unki
n’ B
rand
s Gro
up, I
nc.
“Our late-night business has grown from 0.4% to 4% of sales. It’s a HUGE increase.”
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24 INDEpENDENt JoE • FEbRuARy 2013
DDIFO SPONSOR ADVERTORIAL
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hub and spoke facility.” the challenge right now is to find the right mix of product and ways to make deliveries more efficient while getting product to stores within their time frame, he said.
Mellifont points out that some vendors have not started delivering products directly to phoenix so those products
Phoenix continued from page 6
have to be shuttled from Mokina. With the assistance of Regina troglia, Dunkin’s district manager for phoenix restaurants, and her managers, deliv-eries are checked and any shortages are immediately communicated to besnyi and his team so product can get to the restaurants.
“It’s getting better slowly.”
bruce insists that in time, with growth and expansion, the process will im-prove.
“We’re in this for the long haul, pun intended,” bruce said.
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FEbRuARy 2013 • INDEpENDENt JoE 25
A copy of a 1852 painting of Muncy Valley hangs over the mantle. This was the first time in 160 years that the local historical society allowed someone to make a copy.
Mosaic continued from page 9
together before, and were featured in Muncy’s juried art show in the fall of 2011. In fact, they have done mosaics for other buildings, finding them a good art choice for restau-rants especially because the tiles are easy to clean. Mosaics are made up of hundreds or thousands of tiles, ranging in size from about an inch to five inches, each one painstakingly painted and coated with clear glaze, one tiny piece of the picture at a time. Creating art this way takes time; the piece for the Muncy shop took four months.
bower wanted the artwork to weave in the history of the area, comple-menting his other pieces, and so the artists focused on a canal scene. Long before the railroad went through this area, canals were the preferred method for hauling goods long distances. the central theme of this mural is a canal boat being pulled by donkeys, but the overall mural is so much more.
“It has lots of flowers and animals of all kinds, in vibrant colors,” bower said. “It’s meant to be historical but engaging; something you could look at for hours,” perfect for enticing people in to linger over coffee, with a whimsical quality that makes it appealing for kids as well as adults.
Blazing a Trail but bower wasn’t done connecting with the commu-nity. His construction was overtaking the area his shop shared with a local gas station; to entice people to keep frequenting the station, bower offered to supply the cof-fee. Even better, he tied it into a local fundraising project headed by the historical society, the same one that pro-vided him with all the great artwork for his store.
the town needed money for a nature trail and boat dock they were building down by the river. Since the new mural would be a depiction of this area when it was still a canal, it was a perfect tie-in to let people know, while they were buying gas and getting their free coffee, that they could donate to the renovation of the same area. bower and the gas distributor would then match those donations up to $10,000.
Much to everyone’s surprise, people donated $10,000, which bower and the gas distributor matched, for a total donation to the town of $20,000. the town itself then came up with another $16,000, and that new amount - $36,000 - doubled in value as a result of a govern-
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Mosaic continued on page 26
26 INDEpENDENt JoE • FEbRuARy 2013
index Independent Joe
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Joyal Capital Management, LLC
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The WiFi Company
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Mosaic continued from page 25
THE EXPERTS OTHER EXPERTS TURN TO
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ment match. bower says the $72,000 collected for the project really came about because they were giving away free coffee.
this is what bower loves: connecting with the people and the customers. to that end he provides fresh donuts all day and all night. His store sales at 3 pm and 6 pm are completely different, and better, than many other stores.
“I know I’m not going to make as much money,” he said, “but overall I will have higher sales.”
that’s evident by the reaction from customers, all of whom have been positive about the shop. by connect-ing with the town, and the historical society, as they were building, bower and his crew created a place that people were excited to see open.
New Owner; Same Visionbefore he completely finished con-struction, bower decided to sell: it was time for him to retire. but it wasn’t in him to sell to just anyone; he wanted someone who was as committed to community as he was. And after going through countless people who wanted to buy, he found his perfect match in Jerry Forger. Forger took over the shop and fin-ished the work bower had started.
Forger is no stranger to Dunkin’ Do-nuts, owning seventeen stores before this one. He loved what bower was doing with this store, in part because it’s similar to things he’s done in his other locations. their philosophies are strikingly similar, so much so that they finish each other’s sentences. And he echoes bower’s sentiment that it’s the connection to community that makes stores like this one so successful.
“the reality is, we all go through ups and downs in society,” said Forger. by being the level, steady guy in the community, “we may not get big ups and downs, but we’ll be part of the fabric of the community.
“We’re stewards for the community.”
2 Independent Joe • February 2013
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February 2013 • Issue 18 We Communicate, We Educate, We Advocate!
Pennsylvania Shop Has A Legacy of Connecting Its Community by Stefanie Cloutier
Franchisee Bryce Bares Brings
Dunkin’ to Nebraska by Betsy Lawson
This Isn’t Bill Rosenberg’s Dunkin’ Donuts Anymore... by Adam Goldman
Tax Changes for 2013 – What it Means for You by Stefanie Cloutier
National DCP’s Phoenix Facilityto Drive Western Expansion by Cheré Coen
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