If you’re from the U.S., you’re probably familiar with the donut and coffee chain known as Dunkin’. Its bright pink and orange branding can be found decorating more than 9,500 locations in the country — and it isn’t just the U.S. Although based in a suburb of Boston, Massachusetts (and firmly established in the zeitgeist of that city), the company has more than 13,000 shops in 40 countries, serving up their own unique Dunkin’ donut tastes. Notably, though, in addition to a few states without a store, one country just doesn’t run on Dunkin’. Canada doesn’t have a single Dunkin’ shop in all its nearly 4 million square miles of land.
That hasn’t always been true, though; back in the 1990s, Canada had more than 200 Dunkin’ stores in the Quebec Province. But for those who might be thinking that this decline-turned-extinction was just a result of The Great White North’s celebrated love affair with coffee chain Tim Hortons (now 4,000 locations strong), you wouldn’t be entirely wrong. However, that’s only part of the story.
The full coffee chronicle lasts more than a decade, starting with an alleged branding betrayal and ending with a lawsuit settlement of nearly $18 million. By the time the appeals ended and the suit was settled in 2016, there were just four Dunkin’ shops in Canada — only two years later, the company had all but disappeared.
A 13-year lawsuit led to the chain’s last Canadian cup
Tim Hortons is certainly central to the story of Dunkin’s defeat. Established in Ontario in 1964, Tim Hortons exploded in popularity in the late 1990s and early 2000s. This chain also has locations in the U.S., but it was distinctly Canadian — and Dunkin’ couldn’t compete with the cultural connection. Some also claimed that quality, adaptability, and a willingness to change based on consumer desires just weren’t on the company’s strategic menu.
Then, in the midst of Dunkin’s decline, a group of 21 franchisees in Canada filed a lawsuit. In 1996, those franchisees had begun to report to Dunkin’ a lack of support from the company. Their 2003 lawsuit claimed the company had neglected its franchisees in the north, backing out of a promise to invest $40 million and failing to properly market their products in the face of competition (where Tim Hortons joins the narrative). The plaintiffs also alleged that they had been persuaded to join a remodeling program — a program that never actually happened.
It took 13 years for the final gavel, the result of many appeals and disagreements. In 2016, Dunkin’ had to pay the franchisees close to $18 million in damages — comparable to the profits they would have earned from 2000 to 2005 and the pre-decline sale price of their 32 stores, as well as interest and legal fees. By 2018, Dunkin’ finally surrendered the Canadian coffee market to its native son, Tim Hortons.
