Kate Jaspone, who grew up in Boston, is proud to have left KPMG to join the finance team at Dunkin' Donuts. “It was an honor to work for a brand I grew up with,” she says. “It's about creating something that people love and [Dunkin’ Donuts] Providing a way for people to get ahead and achieve the American Dream has been an honor, as many of our franchisees are immigrants from other countries.”
Jaspon, who serves as CFO of Inspire Brands, which acquired Dunkin' Brands in December 2020, was in charge of steering the finance department during the tumultuous period of the COVID-19 pandemic at Dunkin' Brands, which was a publicly traded company that had gone public in 2011 after being owned by a consortium of private equity firms for the previous six years.
Dunkin' Donuts weathered the financial crisis while Jaspon was assistant comptroller. “When times are tough, Dunkin' Donuts often accelerates,” Jaspon told Jack McCullough, president and founder of the CFO Leadership Council, in a keynote address at the CFO Leadership Conference on Wednesday. “Breakfast is the last thing people give up when they're trying to save money. Coffee and breakfast are like rituals.”
The COVID-19 pandemic was unusual and has upended restaurant franchising to a great extent, but Dunkin' Donuts' response to the crisis has essentially been “a textbook on how a company should act in the face of an unprecedented threat,” McCullough said.
In early 2020, as the pandemic spread in Asia, Jaspon, who was appointed CFO three years ago, returned from a franchise conference in Peru. He had been on a scuba diving trip with his family and had just disembarked when he received an email informing him that the U.S. had shut down the restaurant industry and he had to return home immediately. When he landed in Boston on the last flight from the Caribbean, he was greeted by airport officials in protective gear. Jaspon takes over the story.
Correct pitch
“[Dunkin’] We were focused on the Northeast and New York and Boston, the two hardest hit cities in the US. But we were 100% franchised, so we had a lot of panicked small business owners who were taking on a lot of debt to run their businesses and employed a lot of people who lived off their paychecks. What did we do?
“We are a public company and we were expected to pay dividends, but our stock price plummeted. I don't know if I should take responsibility for this, but I secured the plexiglass, [to put up dividers]And then, because everything hadn't yet been shut down, we flew to Washington and lobbied the government that America runs on Dunkin' Donuts. [a marketing message Dunkin’ developed in 2006]To keep hospitals and people working, we need to provide coffee and other things.
“During that time, we convinced a couple of our franchisees to reopen their manufacturing sites, not in consumer-facing locations, and to go to hospitals with trucks. We were delivering boxes of donuts, coffee, everything. We delivered to police, elected officials, wherever we could. And we sent letters: 'We can do this. We can do it safely. We can reopen restaurants. People need food. You're keeping your grocery stores open.' We partnered with a lot of our peers in the restaurant industry who had drive-thrus. The government said they could reopen the drive-thrus and walk-in lobbies. Eventually, we got permission to install plexiglass. All of this was a turning point for Dunkin' Donuts, because Starbucks, Peet's Coffee, and all the businesses on the West Coast were closed. And they made the pitch that they couldn't put their employees at risk. We made the pitch: 'America runs on Dunkin' Donuts.'”
“Bloody cash”
Of course, the finance department was nervous. Jaspon spent a lot of time calling every lending institution, every landlord, and every supplier that franchisees used. “We took a completely different stance than a lot of our peers and said to our franchisees, 'We're with you.'” Jaspon and her team asked lending institutions to defer franchisees' principal and interest payments and vowed to stay loyal to those banks. Jaspon was on the phone with franchisees every morning and afternoon, advising owners how to navigate the state's pandemic shutdown rules, including a ban on employees having contact with truck drivers who brought in deliveries.
Dunkin' also told its franchisees they don't have to pay the company, but that they can pay when business picks up. Dunkin' hasn't laid off any employees at its headquarters and is continuing to pay rent. The only thing it has done is stop paying dividends, something other restaurant companies haven't done, Jaspone said.
“We were running out of cash,” she says. “It was really difficult. I honestly remember not being able to sleep because I was worried that a 75-year-old company was going bankrupt and I was going to become CFO.”
Dunkin' Brands' stock price fell to just under $40 per share on March 20, but fully recovered by September. Inspire Brands was initially rejected by Dunkin', but on October 30, 2020, it signed an agreement to acquire Dunkin' for $106.50 per share in cash. Including the assumption of Dunkin's debt, the total consideration would be approximately $11.3 billion. Inspire Brands' portfolio includes restaurant chains Arby's, Buffalo Wild Wings, Sonic Drive-In, and Jimmy John's.
Jaspon became financial head of the Dunkin' Donuts and Baskin-Robbins businesses in December 2020, before becoming CFO of all Inspire Brands in July 2021.
The COVID-19 experience has united Dunkin' Donuts' executive team in ways Jaspon never imagined. What held the team together when the Inspire acquisition came about was “the belief that we could get through anything,” she said.
