Will Dunkin' Profit From Free Doughnuts on Friday?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

It's National Doughnut Day on Friday, and Dunkin' Brands (NASDAQ: DNKN  ) wants to tempt the inner Homer Simpson in us all with a free sugary treat.

The parent company of the 10,500-unit Dunkin' Donuts chain is offering guests a free doughnut with the purchase of any beverage.

This is a smart move on many different levels. For starters, this isn't like the annual Free Cone Day at Ben & Jerry's. There's a required purchase to get that free treat, and Dunkin' Brands is hoping that customers will pair up the freebie with one of its signature coffee drinks.

Dunkin' Donuts has cultivated a healthy following for its brewed bean water. The ambience of the bright doughnut shops may never match the barista hub of Starbucks (NASDAQ: SBUX  ) , but it's not a coincidence that both chains rely on their caffeinated blasts of joe to woo morning traffic. Both chains are also so well known for their coffees that both brands are marketed as Keurig K-Cup options.

Dunkin' Brands may not be as tony as Starbucks, but there's a reason Starbucks recently began opening Seattle's Best Coffee shops in strip mall parking lots to eat into the cheaper beverages being poured out by Dunkin' Donuts and McDonald's (NYSE: MCD  ) .

This move by Dunkin' also is a shot at Mickey D's, reminding morning commuters that coffee and a doughnut makes a reasonable breakfast choice.

If a doughnut alone doesn't sound like a substantial rival to the Egg McMuffin, how about the new doughnut bacon sandwich that Dunkin' is introducing this week? If bacon and egg served inside a sliced glazed doughnut sounds outlandish, the same thing probably could've been said when McDonald's introduced the McGriddle.

Running the free-doughnut-with-a-beverage-purchase promotion at the same time that it's introducing a head-turning sandwich is genius. Dunkin' will naturally get plenty of free publicity for the new sandwich as it becomes late-night-show joke fodder, but there's no harm in hammering it home in person when folks stop by on Friday to take advantage of the sweet holiday that supposedly dates all the way back to 1938.

Doughnuts are big business in 2013. Did you catch Krispy Kreme (NYSE: KKD  ) shares soaring 31% last week? Krispy Kreme posted blowout quarterly results, and it's come through with 18 straight quarters of positive comps. Krispy Kreme is better known for its doughnuts than its java, but that's also perhaps why it's offering its customers a free doughnut on Friday without them having to pony up for an additional purchase.

Dunkin' Brands has the right idea as Krispy Kreme attracts the freeloaders.

What about the McCafe master?
McDonald’s turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald's future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 06, 2013, at 10:53 AM, cmom3 wrote:

    I LOVE how people who will head to KK are freeloaders.... what about the people who have no DD nearby or that KK is closer? OR!!!!SHOCKER someone who will not buy a coffee even for a free donut because...THEY DONT LIKE DD COFFEE!!!!

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2473497, ~/Articles/ArticleHandler.aspx, 9/24/2016 5:09:36 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 19 hours ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
DNKN $50.11 Up +0.71 +1.44%
Dunkin' Brands Gro… CAPS Rating: ***
KKD $0.00 Down +0.00 +0.00%
Krispy Kreme Dough… CAPS Rating: **
MCD $117.17 Down -0.19 -0.16%
McDonald's CAPS Rating: ***
SBUX $54.43 Up +0.04 +0.07%
Starbucks CAPS Rating: ****