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Int’l Multifoods Selling Mister Donut Franchising To Dunkin’ Donuts

January 15, 1990 GMT

MINNEAPOLIS (AP) _ International Multifoods Corp. announced Monday that it had agreed to sell its Mister Donut franchising operations in the United States and Canada to rival Dunkin’ Donuts Inc.

The deal, which is subject to regulatory approval, if completed would combine the franchised doughnut shop chains that are the two biggest in North America on the basis of sales.

Dunkin’ Donuts, which was acquired late last year by Britain’s Allied-Lyons PLC, has some 1,600 franchised shops in North America, while No. 2 Mister Donut has 558 U.S. and Canadian franchises.


International Multifoods said Mister Donut’s 475-store U.S. operation would be sold to Dunkin’ Donuts and the 83-store Canadian operation will be sold to Allied-Lyons Canada Limited, of Toronto.

The transaction is scheduled to close by the end of February. Terms under the definitive agreement announced Monday were not disclosed.

″Over the past several years, we have concentrated our development in food service on food processing and specialty distribution,″ said Tony Luiso, chairman, president and chief executive officer of International Multifoods.

″Though the Mister Donut system is strong and the business is profitable, franchising is not part of our long-term strategic direction,″ Luiso said.

Mister Donut had franchisee sales of about $156 million for its U.S. and Canadian businesses in fiscal 1989.

In the nine months ended July 29, Dunkin’ Donuts reported total earnings of $7.62 million on revenue of $89.7 million down from a profit of $9.86 million on revenue of $82.4 million in the same period a year earlier.

International Multifoods plans to continue serving both Mister Donut and Dunkin’ Donuts’ franchisees as a supplier of bakery ingredients.

Multifoods, with fiscal 1989 sales of $1.9 billion, is a diversified food company with major operations in the United States, Canada and Venezuela.

Allied-Lyons, a diversified food and beverage conglomerate, acquired Dunkin’ Donuts late last year for $325 million. The deal ended the chain’s seven-month battle to thwart a hostile bid led by Unicorp Canada Corp. and partner Cara Operations.

Richard Hart, a spokesman for Dunkin’ Donuts, said he does not expect the government to raise antitrust objections to the Mister Donut deal. He said there is a ″huge, huge, huge″ number of competitors selling donuts, including bakeries, grocery stores and individually owned donut shops.

Hart said the shops initially will retain their separate identities, but the company will test the idea of converting Mister Donut shops to Dunkin’ Donuts shops.