Dunkin’ Has Filed for Bankruptcy in Amsterdam. Here’s What Happened

Dunkin’ may be one of the most popular coffee shops in the United States, but it failed to capture the European market. The coffee giant’s Dutch branch has filed for bankruptcy, despite previous reports that it would be expanding its presence. Let’s take a look at what happened.

Dunkin’ Filed for Bankruptcy in Amsterdam

According to the European website RetailDetail, a “wealthy hotel chain” was due to invest in the European branch of Dunkin’ this year. However, as of Friday, Oct. 11, the coffee and doughnut chain filed for bankruptcy in the Dutch courts. The branch had already closed 20 shops in the country before the filing.

Inspire Brands, an American company, is the owner of the Dunkin’ brand. The Van der Valk group acquired a majority stake in the Dutch arm of the doughnut and coffee business less than a year ago with the intention of connecting with youth, whom they referred to as “the hotel guests of the future,” thus the move is somewhat surprising. At the time, Van van Valk mentioned the goal of nearly doubling the number of Dutch Dunkin’ shops from 76 to 130.

However, not everything went according to plan. A receiver was named and is currently meeting with management to determine the best course of action. The staff was given little notice, and the stores are continuing to operate as usual.

According to the Dutch newspaper De Telegraaf, the trustee warned against customers placing orders online, as he could not guarantee that the orders would be delivered amid the bankruptcy filing. Derk van Geel, the court-appointed trustee, also said that he would be answering any questions the Dunkin’ employees had.

The Doughnut Giant Remains Popular in the States

Despite its struggles abroad, the coffee chain remains incredibly popular in the United States.

Last month, the largest franchisee in the New York City region was sold. Beach Point Capital Management LP has provided money to Metro Franchising, one of the largest Dunkin’ franchisees in the system with 105 outlets in the New York metro area. Stuart Cohen, the CEO and co-founder of the company, and Paul Waltzer, the president and co-founder, will continue to be shareholders in Beach Point. The previous sponsor of Metro Franchising was Quilvest Capital Partners.

“The partnership with Beach Point represents a new chapter for Metro Franchising, and we are confident that with their support, we will be able to accelerate our growth locally and in new markets,” said Stuart Cohen, CEO of Metro Franchising, in a statement accompanying the press release announcement. “Beach Point’s deep understanding of our business and the franchising landscape is exactly what we need to further our expansion goals.”

Some experts believe that this private equity investment in a major Dunkin’ franchisee is part of a larger trend. According to Rob Lauer, a franchise partner at Haynes Boone, Americans can expect to see more private equity put into brands like Dunkin’ to keep struggling businesses afloat.

“There are more restaurant brands operating today than ever before, and there seems to be an endless supply of new brands trying to gain a foothold in an extremely competitive market,” Lauer said to RetailWire. “Not all will succeed, and that provides private equity lots of opportunities to swoop in, especially if they have more available cash due to rate decreases.”

He continued: “We are also at a stage in PE involvement with the restaurant industry generally that many new(er) restaurant founders went into this business with dreams of cashing out to private equity sooner rather than later, and so I think there are many more brands open to PE than ever before (whereas in the past I know some old school founders were philosophically opposed to private equity involvement in ‘their’ brand).”