>> ok. any issues we should think about? >> the refresh was one of the most inclusive projects we have ever run. >> are you stretching this beyond your core brand? >> this is really the center of our global innovation. you would be an idiot not to put this on the menu. >> that is how powerful this brand is.

>> i'm jeffrey hayzlett. i'm on a journey inside one of the biggest brands in america. i have been a ceo, a cmo and boardroom cowboy. now i'm visiting the executives in charge of the most powerful companies in the world to see how they tackle the challenges. of the "c-suite." are you ready, guys? ok. we're taking a look at dunkin donuts. $9 billion. that is a company that gets my attention. they have a 60% market share in donuts. they are killing it. there are still a lot of questions. how will it be more than a doughnut shop and a place in which you stop to get a quick cup of coffee? they are updating their look. this new fresh casual.

they are adding electric logins and usb ports. it is kind of the break from the blue-collar. will this new look accomplish what it is supposed to? bring in millennials? they're going back to california after they failed twice. they have been rejected twice. what is going to make the difference this time? i will speak with the ceo and his new management. how are they affecting the change within the company and their franchise network? these guys are changing it all the way around. you have to ask, is it going to work? the dunkin donuts i grew up with had no frills. i'm ready to see if this new refresh can attract new customers to the brand. how are you doing? >> good morning. welcome to dunkin donuts and baskin-robbins. >> how are you?

>> walk us through this new store. >> what we have done is create an environment that is welcoming. >> when you look at dunkin donuts of old, i would think of the glazed and the boston cream and jelly donuts. now i'm getting smokehouse bacon, one of my favorites, by the way. these other specialty sandwiches like tuna salad and chicken salad. are you stretching this beyond what would be your core brand? >> i do not think so. your point is very well taken. we have reduced the menu on one side. always a challenge because certain people always want to keep certain products. the reason we have sandwiches, it goes well without beverages. it is a margin nearly as high as our beverages. we are thinking about franchise economics.

>> you are clearly starting to target some of the other folks. when you look at this experience, it looks like maybe one of those companies from seattle -- starbucks. [laughter] but with different colors. it has got an average joe feel, but is that who you are targeting when you look at this? >> we're not targeting anyone. we are targeting our guests. and really, that phrase, "friends don't let friends drink starbucks" -- that has been around 12 or 15 years. we created the design that the guests wanted. it is starbucks, panera -- you see it everywhere. everyone is following the guest's direction. >> this is a big change. it is a heavy investment for the franchisees. it is a little bit of a departure. trying to capture more of the

market share. who came up with the idea? how did you bring it forward? >> one of the things we sought is to be forward-looking. where do consumers want to be in the future? it is not easy when you have over 17,700 stores. owned by other people. you said you have owned franchisees. there are pluses and minuses. one of the more difficult things is to get people on your side. they all look for leadership. we are constantly thinking about where the consumer will be. >> i know a decision like a refresh can only come from the "c-suite." it's time to sit in with nigel, the executive chief, to see how the leadership runs the company. i'm going to ask you by raise of hands, how many have been here for more than 10 years? more than five years? how many have been here less

than five years? i think that is interesting. >> we feel that we are relatively senior and we have all melded together. i feel extremely happy with this table. >> how is the discussion about the refresh of the store and the decisions made in this room? how did you do that? >> the refresh is one of the most inclusive projects we have ever run. this group got regular updates but perhaps even more important is that the team is reaching out to everybody and making it inclusive as opposed to exclusive. >> interestingly enough, international investors know this is a western expansion store.

>> do you think that will be the key to your success? >> absolutely. >> i have been in many companies and they are much more scripted. are you guys not scripted? this seems to be more of a genial, let's get together and have coffee. more people have this prep, or the powerpoint doesn't patient. >> it is only part of the process. these meetings to focus on the kinds of issues you are hearing now. there is a disciplined rhythm to the business. this aspect is more dealing with current issues and keeping everybody up to date. >> prior to my time they used to have a monthly meeting. this business moves too fast to do it monthly.

>> communication is power. it is not for me to keep it to myself. it is for us to share. >> we have got the best team on the market in the franchise. >> we are the number one retailer in new york. >> that is how powerful this brand is. ♪ >> decisions like a refresh

take place in the "c-suite." but it is incumbent on the ceo to sell it to the people footing the bill, the franchise meeting. we are about to walk into a crowded meeting. what does that mean? >> this is the dunkin brands council meeting.

there are about 24 franchisees that have been elected by their regions. they are elected by all of the franchisees. they meet just about every quarter. we are the number one retailer in new york. if you look at the competitors, or semi-competitors -- subway is the next closest, 120 stores behind. >> how strong is the voice of the franchise in a bigger group like this? >> we like to say we own all of the rooftops. 99% of all of the stores you see are owned by franchises. we are definitely a partner at the table. our opinion and contribution really counts. it is a true partnership. like all partnerships, you do not agree all the time, but when you walk out of the room, you know the game plan. >> it basically this is where we consult with him. it is an important avenue for franchisees to feed things to

us. >> we come right out them as a team. we come at them about unit economics, image, pace that something that is being introduced, not introduced, something going on underground, it is all open season when it comes to our conversation. the ultimate goal is to have a successful brand. it is pretty much a foxhole type mentality. >> so the last time we had a bet, that you would wear a hockey jersey for whoever won and the blackhawks won. [applause] >> thank you. the relationships here are outstanding. >> does it look good? >> an important part of management is to be authentic. i try to be authentic. and very straightforward.

it is all about driving comparable store sales. the profitability for you guys as well as us. if this works, we have bigger store expansions. which is moving steadily west towards california. >> we think we have got the best team on the market in the franchise we had the best team of franchisees. being a good franchisor is key. whether it is dunkin brands or somewhere else, if you are not on your game, you will never accomplish what you want. >> come on in. have a seat. >> you are the money man. you are the man who controls a lot of the flow that comes in and out of a company. >> yes. >> what about the new store makeover? that is a huge investment store by store. and it is by the franchisees. >> when you sign the agreement, you agree to do remodeling in 10 years. start planning it out.

it is less about $250,000 this year, although that is the way the cash comes out of their bank account, but it is really $25,000 a year. >> one of the things i have been noticing is that you're doing your expansion. you look at the numbers. 85% of your numbers are in the northeast. you're moving back into california and you guys failed there. >> the good news is we know why we failed. the bad news is it was all our own doing. we did not support the franchisees. we do not have a operational mindset. they opened restaurants, and we left them to do their own thing. it has really changed. it is a operations-focused operation now. part of that was our own doing. i think california loves dunkin brands.

21% responded that they get their morning coffee at dunkin and we have zero stores in los angeles. that is how powerful the brand is. >> the biggest thing for a franchise deliver things consistently, have everyone do things the same. they have got to have great training and have a great system to be able to deliver quality products and service. we are going to see how these people teach folks to be consistent day in and day out. hello. >> good morning. how are you? >> doing great. how are you? >> my name is suzanne. great to meet you. >> is this what you would call doughnut u? >> so to speak. there is a lot to learn about making donuts. >> i would think you would have employees learn this. it is hands-on, in the store. in this case, you have franchisees. >> we have franchisees, the owners, managers.

we rely on them to take the training and to train the crewmembers. >> let's pretend i am a business owners. show me what i have got to do. i feel official. i feel like your old mascot, fred the baker. i will be jeff the doughnut maker. show me how to do it. >> you've got it. >> our standard is to make sure we serve the serve the best, most delicious coffee every single time. >> there we go. >> a little bit more. pour to the line. your guest is paying for a cup of coffee that is full. >> that is fair. that is good. >> the carafe of coffee lasts for 18 minutes. it loses its flavor once it is exposed to air. after 18 minutes, if that coffee is not utilized, we throw it out. you want to give it a go? >> 1, 2, 3.

>> would you like to try that again? >> i have disappointed you. i would like to try it again. >> we stress our heritage. we are a very old brand. we want to make sure people feel passionate about our baked goods and doughnuts and coffee. we want them to come out excited and proud to be a franchisee of dunkin brands. >> we are here for people's success by doing it consistently and follow the process. it is that delicious cup of coffee every single time. >> that goes with the business, if you follow that the procedures, you'll be successful in the business. >> absolutely. >> what is the biggest takeaway you want to see from a graduate to take away from this experience? >> how they can translate that into their stores they are building and have it be a sustainable approach going forward.

>> you do things in very set ways. you get very good and repeat that. i am wondering if you are doing that with your management team. >> we are a process-oriented organization. to the extent we can introduce protestant to things like coaching each other, talking about performance goals, that really helps us a lot. >> welcome to behind the locked doors of the dunkin brands test kitchens. >> oh, man. you would be an idiot not to put this on the menu. ♪ >> there's a lot of change

going on at dunkin. they're going out west. he has a key to the dunkin secret. what is the core essence of the company? >> it is more than just a tagline. our goal is to get you running in the morning and help keep you running all day long. that really guides everything we do. product innovation is the key driver of our business. two years ago, we came up with heart-shaped doughnuts for valentine's day and that became a permanent item. food is interesting. global trends, national trends, regional trends. >> something in boston may not necessarily work in san francisco. >> we serve chicken biscuits in the east. what we are learning is that

there is appeal for chicken biscuit breakfast sandwiches beyond the southeast. the culinary team has developed fabulous biscuits, great chicken. we are starting there to explore where we can sell it outside. >> why wouldn't you focus on going after competitors? >> while it is important to understand competition, it is more important to be focused on the consumers. we're doing it more development of latin-inspired products. we have the cuban flatbread that is off to a great start. >> it'll go crazy every once in a while. >> exactly. dunkin is an authentic brand, but also a very fun brand. >> good to see the heart of the operation. this is it, right? >> this is it. welcome to behind the locked doors of the dunkin brands test kitchen. this is really the center of our global innovation. we have new products going out

two years, some of the things folks will see are in the stores today, but they are also working on things literally two years out and not just in the u.s., but all around the world. >> when i look at this place, it looks like a real lab. we're looking at innovation right here. in terms of the product set and how we have it laid out. >> this is a combination of an r&d lab and replicating a store. >> you have chefs here. >> we have chefs. that is part of it but we also have we also have the food scientists and operations folks. we have people who have operated their own restaurants, who have worked for big food companies, and who have published cookbooks. the combination of chefs, food scientists, and operations people generates real synergy. i want you to meet jeff miller. >> how are you? >> i'm the director of r&d for dunkin brands. i have the dream job of working in what most people think of as willy wonka and the chocolate factory. >> what do you do here?

>> eat. [laughter] it's part of the job, i know. >> take me through the next stage of this. >> absolutely. we are going to go over to the savory station. we are going to take it up a notch and show you how we put our own twist on it. michael will take you through that great steak prep. we have had success with our steak breakfast sandwich. >> dunkin is all about grab and go. all of the products you are going to see taste delicious, but are portable. >> oh, man. you would be an idiot not to put that on the menu. ask a fat guy, a big guy, what works and this works. [laughter] >> i will pass that along. >> we want the people in our restaurants to say, wow. >> we are thinking about everything -- profitability and

operations in the restaurants, all those things into consideration. >> the innovation. does it tickle up or trickle down from the c-suite? >> the culinary team is a great source of ideas. our marketing people are researching consumer trends and our franchisees are giving us ideas. it is a 360 degree process. >> while our name is dunkin brands, but coffee is a core of our business. as fall comes, we have a range of pumpkin-based products. we are going to let you taste a few unique items. jeff. >> what you will have here is a pumpkin white chocolate latte. everybody does pumpkin so what are we going to do that is different? we added white chocolate. >> and do you see a bump in sales when you start offering these during the season? >> absolutely. what is interesting about pumpkin is we have guest to anticipate it. we have moved pumpkin products

into the stores a little earlier. >> i have a big suggestion for you -- bacon flavored coffee. >> we might have to give you a job here. that is right up our alley. bacon flavored everything. >> here is what i have learned in my time at dunkin. everyone knows dunkin' brands. this new forward thinking executive team is rejuvenating the brand without losing its essential identity, a redesigned store, new menu items, carefully measured franchise expansion is exposing the brand to growing demographic populations, and a millennial culture addicted to wi-fi. ceo nigel travis and his team are taking the brand out west to california, a place where it has failed twice before. it is a bold move, but it takes guts to survive in the "c- suite." ♪

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg l.p., its affiliates or its employees. >> the following is a paid advertisement for omega xl. ♪ >> my name is larry king. a few years ago, i had to have open-heart surgery, and when i recovered, i established the larry king cardiac foundation to help people like me avoid heart problems with proper foods, medication, and have a healthy lifestyle.