America’s favorite donut shop is returning to Canada after a nearly decade-long absence.
A Montreal-based restaurant operator has signed a master franchising agreement to open hundreds of Dunkin’ stores north of the border, according to CBC.
Toronto and Montreal will be the first cities to see stores, according to Foodtastic, the franchise operator. The first store is slated to open in six months.
“It’s a younger, cooler brand,” Foodtastic CEO Peter Mammas told CBC. “And I think it’s something that’s missing in the landscape.”
Dunkin’ left Canada in 2018 after a legal dispute with its last remaining franchisees.
The company’s return to the Great White North will put it in direct competition with beloved donut chain Tim Horton’s, which has more than 4,000 stores in Canada.
“You’ve got one player, Tim Horton’s that has about 60 to 70 percent of the market in Canada,” University of Toronto Professor of Marketing David Soberman said in an interview with Globe and Mail. “They’re a real giant and that means that you’re going to be in for tough competition if you decide to come into this market.”
Dunkin’s success will depend on how it handles its role as an American company entering a decidedly Canadian market.
The company will likely hurt its reputation if it tries to make itself seem more Canadian than Tim Horton’s, Soberman pointed out.
“I think people see Tim Horton’s as being a fundamentally Canadian brand, inextricably linked with sporting activities like hockey and curling,” he said. “Dunkin’ Donuts is really seen as either an American brand or people aren’t really sure what it is.”
Dunkin’s second go-around in Canada may be more successful than its first foray, retail analyst Bruce Winder told CTV.
“They’ve done more research, they’re going to slowly nurture the brand in Canada and try to find a unique flavor and menu for Canadians,” Winder said.
Cultural and competitive nuances aside, Canada represents a massive coffee market for the iconic American brand.
“We have more coffee shops per capita than any other country and something like four or five times the number that they have in the United States,” Soberman said. “That definitely makes it attractive for a new entrant.”
Dunkin’s move into the Canadian market comes amid sobering projections about the country’s evolving restaurant industry. Some 11,000 restaurants are expected to close in by the end of 2027, Canadian retail news outlet Retail Insider reported in January.
