Doughnut giant to bring 32 new shops

The nation’s dominant doughnut-shop chain will build 32 new locations in Southwest Ohio over the next several years and generate as many as 480 jobs.

Dunkin’ Donuts, which has captured more than half of the doughnut-shop market share nationwide, announced Wednesday that it has signed a store-development agreement with Cincinnati-based franchise group Gilligan Oil Company for 13 new restaurants in the greater Dayton and Springfield areas, with the first opening planned for 2014.

Pat Gilligan, chief executive of Gilligan Oil Company, already has opened seven Dunkin’ Donuts locations in the Cincinnati area and has started construction on five more, including one in the West Chester area. Gilligan’s agreement with the company calls for the opening of 19 new restaurants in the Cincinnati area, including one in the Monroe area just off Interstate 75, he said.

The Dayton-area agreement calls for 13 Dunkin’ Donut stores to be built in the next nine years in an area that includes Montgomery, Clark, Miami, Preble and Darke counties.

“But we want to get a fast start,” Gilligan said in an interview Wednesday. He anticipates opening four to five stores in the Dayton area over the next 18 months, then opening “one or two a year” until reaching 13. “We’re excited about the market” in the Dayton area, Gilligan said.

Most of the Dayton-area restaurants will be free-standing locations that will include a drive-through window, Gilligan said. Each store will employ 12 to 15 people, he said.

The investment in each store — including land cost, construction and equipment — will likely exceed $1 million, Gilligan said. No locations have been selected yet, he said. “We’re out looking in all the areas as we speak, but we have not secured anything,” the franchise owner said.

Gilligan Oil Company LLC was founded in 1993, and operates gas station-convenience stores, fast-food restaurants and car washes in Southwest Ohio, its owner said. The company also provides fuel to 50 independent gas stations. Gilligan Oil employs 750.

Dunkin’ Donuts has more than 7,000 stores in North America, and it is no stranger to the Dayton-area market. The chain’s sole Dayton-area shop, owned by another franchisee not connected with Gilligan’s company, is at 7777 Springboro Pike (Ohio 741) in Miami Twp. just north of the Dayton Mall.

The area had three or four other Dunkin’ Donut locations over the years, but those stores “came to the end of their leases” and closed, Grant Benson, Dunkin’ Donuts’ vice president of franchising and market planning, told the Dayton Daily News in March 2011.

At that time, the Canton, Mass.-based company hosted a franchise seminar in downtown Dayton and announced it was offering incentives for those wishing to open locations in the Dayton area.

The outlook for the doughnut-shop industry is encouraging. The industry grew at a 2.5 percent average annual rate from 2007 to 2012, and that growth is projected to accelerate to 3.8 percent a year on average through 2017, according to Los Angeles-based IBISWorld, an independent industry research firm. The industry generated an estimated $11.6 billion in revenue nationwide in 2012.

A June 2012 IBISWorld report on the doughnut-shop industry predicted the number of shops to grow to 20,653 by 2017, with most of that growth “dominated by industry giant Dunkin’ Brands,” the parent company of Dunkin’ Donuts. Historically a doughnut and hot coffee chain, Dunkin’ Donuts has expanded its offerings in recent years to include frozen and iced beverages as well as other breakfast and lunch items.

The Dayton area is served by a multitude of independent doughnut shops and by chains such as Tim Horton’s. Krispy Kreme, the industry’s second-largest competitor with a market share of 4.6 percent, has one Dayton-area location in Kettering.

Lisa Tucker — co-owner of Bill’s Donut Shop in Centerville, which was just named one of the Top 50 doughnut shops in the nation by Saveur magazine — said she does not anticipate Dunkin’ Donuts’ entry into the Dayton market will harm her shop, which was founded by her parents in 1960. “I don’t anticipate anything will change for us,” Tucker said.

Mike Peters, president of Springfield-based Schuler’s Bakery, said competition will likely benefit his company as well as his competitor’s by boosting the visibility and popularity of their baked goods. Schuler’s operates three Springfield shops and one in London, and is preparing to open its fifth location in Urbana.

“There’s a market for Dunkin’, and there’s a market for us, to share in this county,” Peters said.

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