Dunkin' Donuts CEO slams $15 minimum wage

[Warren Stupidity]

Dunkin’ Brand CEO Nigel Travis isn’t happy with New York’s recommendation that fast food workers make a minimum wage of over $15 per hour.

In an interview with CNN, Travis expressed his concern over the news and discussed the implications for the industry. “It’s going to affect small businesses and franchises,” he said. “I don’t want to sound threatening about that,” noting that Dunkin’ Donuts DNKN 0.13% would unlikely lay off employees because of the increase. He did, however, say that it could affect the company from hiring workers in the future.

http://fortune.com/2015/07/24/dunkin-donuts-ceo-slams-15-minimum-wage/

Travis makes 10M a year, or approximately 4800 per hour.

[6chars]

1. Let them eat holes

what would it do to the price of donuts if they paid $15?

[AlbertCat]

42. deep fried sugar dough and water infused with coffee beans.

The supplies can't be that much.

[marym625]

2. Fuck him

Their franchise fees are ridiculously high. They are worried about the small frachisers? Cut the fees a few bucks and no worries.

[Fred Sanders]

24. Cut the fees? Might as well cut off his head, or any corporate head, before that.

[marym625]

33. I'm good with that

[antigop]

3. well, look at the partners in Dunkin' brands

http://www.carlyle.com/investor-relations/case-studies/dunkin-brands-group-inc

[The_Commonist]

28. Or as I've been saying for years now...

"Dunkin' Donuts is owned by a consortium which includes The Carlyle Group, the company that brought us George W. Bush, 9/11 and the Iraq War, as well as Bain Capital, Mitt Romney's company.

Enjoy your coffee!!!"

[They_Live]

37. Thanks for the link

I knew there was a reason I was avoiding "beats" headphones etc., besides the over-inflated price tag. I'm surprised at dr dre doing business with them, but I guess they financed the company.

[brush]

4. My first reaction to the selfish CEO was to stop patronizing the DD outlet closest . . .

to me then I though about the workers there who were always nice to me.

So in a quandary as to what action to take.

[JimDandy]

5. The same Dunkin' Donuts that was sued by one of their store managers

for wage abuse. He was paid a salary instead of hourly wages and ended up making way less then their lowest wage worker because of all the hours he was required to work. Most of his work was doing exactly what the wage workers did in the store.

Dunkin Donuts' comnent about that case was along the lines of: Our managers worked hard to get to a management position. To just be called a "manager" is a source of pride to them.

That company is tone deaf.

[TexasBushwhacker]

31. And that's why overtime rules have to change

Right now a person can make a salary of a whopping $24K a year, be declared "salaried" and not get paid overtime. Obama wants to raise the limit to $50K.

[Adrahil]

6. "it could affect the company from hiring workers in the future"

Bullshit.

They will hire as many as they need to keep selling their stuff, and they will make a profit.

Lying, scaremongering piece of shit.

Having said that, I STILL think a minimum wage keyed to local cost of living is better than a flat minimum wage across the country.

[Populist_Prole]

9. +1

Time and time again, predictions of calamity by "job creators" never came to pass every other time the minimum wage went up in the past.

As long as there is a demand for whatever they make/sell, they'll need employees to facilitate it.

[Hydra]

11. Sure, as long as $15 is the bare minimum

My state is quite happy to keep us at the federally mandated $7.25.

[Adrahil]

30. I'm not sure of the right number....

But it needs to be an actual living wage!

[nadinbrzezinski]

51. It depends who you read

but goes from 17 to 20 to meet the 1968 min wage.

[Adrahil]

56. Around here....

$17/hr is decent money. More than a living wage, even. I'd think where I live, a $12 min wage might be fine. But NYC? Prolly really need $25/hr there.

[nadinbrzezinski]

57. San Diego, which is the 4th most expensive city

the Center for Policy Initiatives calculated the low pay at 17, but as they said, theirs is low, it could be at high as 22.

The discussion has, as they have explained patiently, many variables... including transport. Available public transportation that is reliable tends to lower the basement, while needing a car raises. it. San Diego has some reliable transportation now, why they went for that basement. The outlying areas are higher ironically since they are a tad cheaper, but transit is almost non existent.

[Adrahil]

59. I travel to San Diego frequently for work...

That is an expensive place to live! Obviously min wage needs to be pretty high there for a living wage.

[nadinbrzezinski]

60. And we are having a fight to get it done

11,50 and the chamber is complaining. THE HORROR.

It is not unheard that people work 2 and 3 jobs

[Recursion]

61. $15 is higher than Mississippi's *median* wage

Unless the rich states want to poor a whole lot more money into Mississippi than they already do, it's going to be hard for a lot of places there to pay that.

[olddots]

7. companies based on convenience suck

they suck the life put of economic democracy .Hopefully some solutions will evolve because the systems of commerce so far have become so big that they have to fail .

Humans are going to lazy themselves to death ...oops time for my nap .

[Bonhomme Richard]

8. "Travis said that fast food workers should make something along the lines of $12, according to CNN."

Asshole.
There...he admits that $12.00/hr would be fair. He also has the power to put that into effect immediately. He does't have to wait for the government to make him.
The simple truth is that he knows he is screwing the employees and doesn't give a shit. He sleeps very well at night.

[KentuckyWoman]

10. Nigel Travis is correct

A higher wage for workers means a smidgen less billions for Bain Capital, Carlyle Group and Thomas Lee - the primary stockholders of Dunkin Donuts.

Do you really think the Romney Family or the Bush family will give up one thin dime of their hoard so some "lazy moocher" scrubbing the floors at Dunkin Donuts can afford to buy a loaf of bread AND put gas in the car the same week?

I think not.

http://www.sec.gov/Archives/edgar/data/1357204/000119312512161610/d310398ddef14a.htm

[tenderfoot]

12. A lot of people that make much less than $15 are slamming it too.

Last edited Sat Jul 25, 2015, 01:32 PM - Edit history (1)

Low wage billionaires.

[Lint Head]

13. So Nigel, CEO of a major corporation, is concerned about

small business? I think he's more concerned that it may impact his plans to come up with ways to shape sugar into new edible products. That could have a devastating impact on the lovers of rotten teeth.

[TheCowsCameHome]

14. Yeah, let workers rely on tip cups.

Begging is more honorable, isn't it?



Screw you, DD

[onecaliberal]

15. Like Dunkin Fucking donuts is a small business

This asshat should lose everything he has.

[madville]

20. The franchisees that own one or a few Dunkin' Donuts locations are small businesses

Dunkin Donuts doesn't own most of the locations.

[onecaliberal]

23. If you can't afford to pay more than a starvation

Wage, you shouldn't be in business. I don't give a rip what the excuses are. It's not right.

[madville]

32. It comes down to what customers will pay

They can easily get the wage to $15 an hour by simply raising prices 10-15% assuming their labor costs are currently about 30% of gross revenue.

[AlbertCat]

44. by simply raising prices 10-15%

And if the company is not lazy, they can find some other place to cut expenses and keep prices the same.

You know at DD there is some unneeded or "better deal" expense somewhere.


And then of course there's...what if the prices everywhere else go up but theirs stays the same....

[Tom_Foolery]

16. He probably thinks he earns every penny of that 10 million. n/t

[City Lights]

17. Greedy people suck. nt

[RichGirl]

18. Dunkin' Donuts is so 1990's...

It's Krispie Kreme now...or better yet...Duck Donuts. They don't have a display case cuz each donut is made when you ask for it. AND...they will put real bacon on donuts.

[tularetom]

19. I'm going to make some assumptions here so bear with me

What we're talking about is essentially a doubling of personnel costs to each franchise holder. But what does that actually mean? Here's where the assumptions come in.

Say the store is open 16 hours a day and staffed with 4 workers for 8 of those hours and 3 for the remaining 8. So you have a total of 56 worker-hours per day (4x8 + 3x8). Now the daily labor costs at the existing $7.50 per hour would be 56x$7.50 or $420. If the workers hourly wage is doubled to $15 per hour the daily labor costs would double to 56x$15 or $840.

Now, according to this link:

http://www.qsrmagazine.com/reports/top-50-sorted-average-sales-unit

The average annual sales figure for a Dunkin Donuts outlet is $839k per year. Assuming the store is open 365 days, that comes out to a gross of $2300 per day.

Two more assumption. Lets say that $2300 per day results from the sale of 1000 items (doesn't matter if they are cups of coffee, donuts, or whatever) then the average cost would be $2.30 per item. Now lets say that the owners daily profit is 20% of gross or $460 per day. If he had to absorb 100% of the added labor costs from his profit, his share would decrease from $460 less $420 or all the way down to 40 bucks a day. Not hardly worth it for him.

But what would happen if he raised the price of each item 10% (from $2.30 to $2.53). Assuming an inelastic market, his daily gross would now be $2530 and his profit would be $270 per day ($40+$230). If he raised prices 18% his daily gross would be $2714 and his profit would be ($414 per day ($40 + $414). Bingo! The break even point for him would be an 18% increase in the price of his items.

Now I've made a lot of assumptions here but the bottom line is, it doesn't appear to me that doubling labor costs for one of these franchise food operations would be a deal breaker. The franchisee in my example is only netting $167k per year in profit so he doesn't have a lot of leeway to absorb a 100% increase in labor costs. but it wouldn't take a ridiculous increase in prices to do so.

[jeff47]

38. Yep, one of the assumptions is they aren't selling more items

due to more people having money to spend.

[taught_me_patience]

55. a decent back of the napkin

however, I guarantee that raising prices 18% will result in lower sales volume. Also, business pays fica, ss, and workers comp based on wages, so you need to add approx 15% to the wage to get the total employment cost.

Finally, your estimate of shifts is way too low. I'd guess that they have 5 on in the morning and 4 on in the afternoon to obtain the sales volume they are doing. Also, you need people to come in early to prepare to open and stay after to clean up before the close. I own a coffee shop and I can tell you that having three on in the morning and two in the afternoon is EXTREMELY busy to accomplish 1,500 in sales.

Coffee, bakeries, and donut shops will get hit the hardest of all shops with the minimum wage increase because labor is a very high percentage of the total gross (coffee takes time to brew and one person can only make so much in an hour). Coffee is also extremely price sensitive. I've had customers walk out because they didn't want to pay 2.50 for a cup and they were going to starbuck, where it's 2.00 cup. The most efficient coffee shop I've ever talk to had labor a 25% of gross. Most, including mine, has labor at 35 or even 40% of gross sales. That's why you see so many independent coffee shops fail. I'd guess that there is a 90% failure rate within 5 years.

The $15/hr here in Los Angeles will completely and totally annahilate my business. I really don't know what I'm going to do. I'll probably sell long before it really hits, or just go out of business. Any shop that want to survive will have to serve lower quality at higher prices... not exactly great for the consumer.

[lancer78]

62. probably not

Since everyone will have to raise their prices to pay $15 an hour. That man WILL have to pay that $2.50 a cup as I am sure starbucks down the street will have to pay $15 an hour just like you .

[barbtries]

21. fucking greedmeisters

ruining everything.

[madville]

22. A 10-15% increase in prices would easily cover the higher wage

Since most profitable restaurants operate with labor costs at around 30% of revenue, increases wages 50-100% should only result in prices to the customers rising around 10-15%.

[L0oniX]

25. If I could net 1mil a year where I live I'd be totally good with paying $25 an hour.

I would ask WTF is wrong with these CEO's but I really don't care about the well being of greedy sociopaths.

[KentuckyWoman]

43. I net far less.

I own a small business in Kentucky. Pulled what little retirement savings out I had in 2012 and fired it up. I'm up to 12 employees not counting me. I put in about 70 hrs a week total but am not all that often actually in the office. I clear about $54000 a year - about the same as I pay the lady who manages the day to day in the office. The lowest paid is a part timer than gets $18 an hr.

Everyone gets something in 401K. The cost of medical and disability is insane for a business this small. We discussed as a group at the start and found individual purchases through Kynect was a better deal.

We don't have enough people for the disability insurance people to want to bother with us. We've had one major illness in the bunch thus far and were able to continue to pay her for the 4 months she was out sick.

I didn't start this business to get rich. I started this business because the other businesses in the area who offer this type of service are abusive to their employees. I got sick of being treated poorly and seeing those below me treated even worse by the owners.

We deal with a lot of very affluent people. The higher the income the more they think of us as peons. I've had to fire some clients who can't at least be respectful during the business transactions.

[C Moon]

26. Another reason for not buying the worst tasting coffee I've ever had in my life. nt

[TheSarcastinator]

27. As if this assclown gives a damn about "small businesses"

Thanks, buddy: your concern has been noted. No go jump in your private jet and issue another news release complaining about the minimum wage.

[Initech]

29. He might as well have said "let them eat cake".

[jeff47]

39. No, let them eat doughnuts.

That he will happily provide for a fee.

[Fearless]

34. Fearmongering, nothing else

Has an equitable minimum wage hurt any other country anywhere in the world?

Nope.

Actually it helps the economy because more money moves around instead of being trapped in wealthy coffers.

[Beartracks]

47. ^^ This. ^^ An economy needs money to be circulating, not stuck in the Caymans. n/t

[ljm2002]

35. Screw you, Nigel...

...you are the problem.

I once had occasion to deal with an executive at Dunkin' Donuts, at a coffee festival. He arrived on a corporate Lear jet. As we were sharing a table and socializing, he remarked how unrealistic the Hawaiian coffee workers were. Why, he said, they expected to have TVs and automobiles!

I told him, well yes of course they do, they live in the USA where these are pretty minimal amenities for any member of the overall society. He tried not to sneer, but responded that coffee workers in other countries lived much more poorly, sometimes barefoot, and often without electricity.

He said that like it was a good thing.

It gave me an up close and personal glimpse into the mindset of the corporate executives in that particular industry.

They would be only too happy to have 3rd world conditions here for the majority of us. As long as they've got their Lear jets and Armani suits and Rolex watches and retreats in the Hamptons, they're good and screw the rest of us and especially, screw the hardest workers -- in the case of this executive, screw those who actually harvest the crop upon which his exalted position depends.

Fools. They don't even see the pitchforks being readied. It reminds me of an old joke: "You've heard of people who don't know nothin'? Man, this guy didn't even suspect nothin'!" That's how foolish these people are, thinking they are kings of the world, thinking they are oh, so much smarter than everyone else, thinking that fellow human beings are just resources to be sucked dry.

[Lifelong Protester]

36. "Slam" him and don't go to DD

I agree with whomever it was in this thread that they are torn between 'swearing off' DD and in the process, 'dissing' the workers. I'm torn too, but I only see DD when we travel, so saying 'adios' to DD won't be hard.

[valerief]

40. Another entitled asshole. nt

[lark]

41. Exactly~

He wants his workers to be in poverty so he can make more $$ than he or his kids could ever spend. Don't raise wages, leave NY, it's him that will be hurt the most. I rarely go there anyway, and after this won't ever go back, same as Chic Filet and Poppa Johns.
Donut Shop is 10x better anyway and it's a family owned business here in Jax. so on the rare occasions when I buy donuts, it will always be at that shop.

[Rosco T.]

45. Screw You Jackass, I like Krispy Kream better .... n/m

[Beartracks]

46. Why do CEOs think a $15 min wage takes money OUT of the economy?

Think of all the future potential customers who would have disposable money to spend on donuts.

=======================

[Spitfire of ATJ]

48. The house that donuts built....

http://www.dailymail.co.uk/news/article-3173691/Dunkin-CEO-Nigel-Travis-says-15-hour-minimum-wage-absolutely-outrageous-lives-mansion-makes-10million-year.html

[Not Sure]

49. I would boycott Dunkin Donuts but...

I already hate everything they sell so I would never go there anyway. Their products are shit.

I can get far better coffee and doughnuts just a couple blocks away at a family owned and operated shop.

But because he deserves it: fuck this loser scumbag* CEO. May he choke on the shit he sells.

*This is how I portray the ridiculously excessively rich to my children: empty, pathetic, jealous, greedy losers who can't handle sharing and who deserve only sympathy, not respect or adulation.

[pansypoo53219]

50. we need a CEO tax for these OVERPAID profit pigs. SHARE. KILL AYN RAND.

[MADem]

52. They're everywhere in my area, and I avoid them like the plague.

They won't get a dime from me.

[PatrickforO]

53. Maybe Travis should voluntarily cut his salary to $250,000 per year.

Because that is plenty for ANY CEO to earn, period.

As to raising minimum, no one really says it, but I heard a good idea. It is true that many young people work part time while in high school, but the median age for fast food employees has risen to 29 years old. What this means is that adults are trying to work and make ends meet, and kids have the lowest labor force participation rate ever.

So...

Why not have minimum be $15/hr when you get to be 21 years old.

For 18 through 24, it could by $12.50

For those 17 and under it could be what it is now.

As to what Travis said, it is true that it will affect small businesses, particularly restaurants, and franchises. To solve this problem, companies should revise the franchise agreements to allow for a high wage, because the way most franchise agreements are now is after you buy all the stuff, open the store and make your regular franchise payment, you can only afford to pay people minimum. If the franchise payment was lowered, then franchisees would be able to afford more. Of course, that would affect....corporate profits (gasp).

For very small companies, they will simply have to wait until they are making more money to hire people so they can pay the $15/hr.

[daredtowork]

54. If people get laid off from crappy jobs

Move them into good jobs. Where our government is failing us is moving people into GOOD jobs, even if they have to direct hire people to do it. And if they have nothing for us to do in a job, then it's time to state that we can do other things with our lives right now and grant us a mincome and right to housing so we won't be out on the street.

The Dunkin Donuts guy is arguing for the Divine Right of Capitalist to make out like bandits. What about the right of individuals to live their own lives with purpose instead?

[kelliekat44]

58. Will stop buying from them. Not a problem since their products are bad for your health. nt