Why Is Dunkin Donuts Closing Down In South Africa?

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Poor performance of the existing stores was one of the main reasons cited for Dunkin Donuts to close down in South Africa (SA). The South African franchise owner also said the move is in line with its value-based strategy that aims at improving the group’s capital allocation, which will assist in funding the growth of its Burger King business. 

The company said in a statement.  

“The decision to exit Dunkin’ Donuts and Baskin Robbins was made following sustained losses in these businesses and an unsuccessful process to dispose of these businesses. The decision is in line with the company’s value-based strategy, which aims at improving the group’s capital allocation by channeling capital to high-value potential assets, such as Burger King.”  

The other reason cited was that Grande Parade had been actively pursuing opportunities to exit these businesses in the most effective and efficient way since September 2018. They had engaged with several potential buyers over the second half of 2018 and have decided that voluntary liquidation of both businesses is the best possible option in the absence of any serious offers. 

Grand Parade acquired the rights to represent Dunkin’ Donuts and Baskin Robbins in SA, Namibia, Botswana, Zambia and Mauritius in January 2016. The group initially intended on developing more than 250 Dunkin’ Donuts restaurants and more than 70 Baskin-Robbins shops in the country.  

In its 2018 financial year results, however, Grand Parade said it had rolled out five stores for Dunkin’ Donuts and one store for Baskin-Robbins, bringing total stores to 11 and five, respectively. 

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