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Dunkin' Brands Group Inc (DNKN)
Q2Â 2020 Earnings Call
Jul 30, 2020, 7:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Dunkin' Brands Second Quarter 2020 Earnings Call. [Operator Instructions]
I would now like to introduce your host for today's program, Stacey Caravella, Senior Director of Investor Relations. Please go ahead.
Stacey Caravella -- Sr. Director, Investor Relations
Thank you, Jonathan, and good morning, everyone. Speaking on today's call will be Dunkin' Brands Chief Executive Officer, Dave Hoffmann; President of Dunkin' Americas, Scott Murphy; and Dunkin' Brands Chief Financial Officer, Kate Jaspon. Following prepared remarks, we'll open the call to questions. Today's call is being webcast live and recorded for replay.
Before I turn the call over to Dave, I'd like to remind everyone that the language on forward-looking statements included in our earnings release also applies to our comments made during this call. Our release can be found on our website, investor.dunkinbrands.com, along with any reconciliation of non-GAAP financial measures mentioned on the call with their corresponding GAAP measures.
Now I'll turn the call over to Dave.
Dave Hoffmann -- Chief Executive Officer And President
Thanks, Stacey, and thanks, everyone, for joining us early this morning. I want to take a moment upfront to give a heartfelt thank you to everyone listening in. Many of you still working from home. As we navigate our way through this pandemic, we are viewing our business during COVID-19 in terms of three phases: running, working and recovering. So let me start with running. For 70 years, Dunkin' has been keeping America running. While the COVID-19 pandemic is unlike anything we've experienced before, we knew our takeaway model with additional safety protocols in place would serve us well. We have always been the great coffee fast brand and our continued focus on convenience and accessibility, along with beverage and snacking innovation drove sequential improvement of Dunkin' U.S. same-store sales throughout the quarter. Our franchisees went the extra mile to keep the vast majority of our Dunkin' U.S. restaurants open during the second quarter to help our guests get through the day and to provide a sense of normalcy during these times.
As of today, there are fewer than 70 traditional Dunkin' locations still closed, most of which are in Manhattan or Boston. In addition, there are approximately 300 alternative locations closed that are primarily in transportation hubs or on college campuses. In all, approximately 96% of Dunkin' stores in the U.S. are open and that number is similar for Baskin-Robbins U.S. as well. During the second quarter, sales in our newer markets were a bright spot. When other restaurants were closed, we were open. New guests discovered our innovative everyday value-priced beverages and our low contact service options, including drive-thru, On-the-Go Mobile ordering, curbside or delivery. They now know us much more than just the donut brand.
Together with our franchisees, we did what was right in our restaurants to protect dedicated crew members and loyal customers. And going forward, we know that safety remains a high priority for customers. The protocols we implemented very early on, such as mask for crew members, plexiglass at the serving areas and enhanced sanitation practices are still in place. We believe keeping these health and safety protocols in place will serve us well as the country continues to deal with this pandemic. And Scott will get into this more in his comments. As a part of a desire for a safe experience, customers are increasingly interested in a quick contactless shopping experience. No-touch has truly become the new high-touch and more customers than ever before avail themselves of our digital offerings, including through our Perks loyalty program, On-the-Go Mobile ordering and delivery for faster, low contact service. Our active Perks membership is seeing tremendous growth, both year-over-year and also versus Q1 pre-COVID levels with a higher percentage of members using mobile order ahead than ever before.
Our investment to bring the intellectual property that runs our Dunkin' app in-house is paying off by allowing us to make app changes more quickly than ever before. For example, we launched new curbside capabilities within the app to any franchisee who wanted it and added a more sophisticated curbside ordering flow for consumers, making it simple for guests to safely have their Dunkin' order delivered to their car. We now have more than 1,400 restaurants offering curbside as an option, and these are primarily locations that do not have a drive-thru. A cornerstone of our blueprint for growth, digital technology played a strong role in driving sales this quarter and will increasingly be at the forefront of enabling brands to deliver a great guest experience. So we're doubling down on our digital platform, and last week, announced that we had hired Phil Auerbach to the newly created position of Chief Digital and Strategy Officer. A true transformational leader, Phil will be responsible for fast-tracking our digital platform to deliver a more frictionless, personalized experience for guests, however they choose to use us, through the Perks loyalty program, our mobile app, drive-thru, delivery, in-restaurant and even other channels we haven't even envisioned yet.
The digital engagement team we have assembled under Phil includes global IT, digital marketing, business analytics, consumer insights and our media and partnership teams. In other words, we have combined all the functions needed to fire up our digital transformation and grow our business with technology and advanced analytics at the forefront than ever before. We are excited about the incredible opportunities that await us and are delighted to welcome Phil to the Dunkin' family. Okay. Now to our second phase, working. In conjunction with our franchisees, our great franchisees, we're proud to keep America working. At a time of record high unemployment, Dunkin' franchisees have kept their restaurants open with an emphasis on safety, and their crews employed. As small business owners, our franchisees continue to be an essential, trusted part of the communities where they live and work and a continued source of jobs. Now as more of America opens up, Dunkin' franchisees are seeking to hire up to 25,000 new restaurant employees at Dunkin' locations from front counter to restaurant management. We recently announced a new program that will enable any Dunkin' crew member full or part-time, anywhere in the country to receive a low-cost college education.
We're also proud that we avoided corporate furloughs since the crisis started. Instead, we identified other G&A and capex savings to preserve cash while protecting our workforce. And we're doing things like a gig program that allows employees with roles impacted by COVID to be reallocated to other critical functional areas. Finally, this leads me to our third phase, recovery. Today, our Board of Directors announced that we are reinstating our regular dividend program. We suspended it last quarter out of an abundance of caution and what we believed was the responsible thing to do. But this management team and our Board remain committed to return cash to shareholders. With cash collections resuming in late April and with the vast majority of our restaurants open, we believe this is the appropriate time to reinstate that dividend. We're also taking the opportunity to assess our global real estate portfolio and work with our franchisees to permanently close off-strategy locations. For Dunkin' U.S., this means locations that have low average weekly sales, those that cannot support our beverage innovation or a next-generation remodel or, frankly, there are locations where the traffic patterns have changed and they can't be relocated or add a drive-thru.
For Baskin-Robbins U.S., the closures are a continuation to its raising the bar strategy and working with franchisees to close underperforming locations is Jason's mission. And outside the U.S., certain licensees have and will continue to close smaller, limited menu locations in specific countries. Kate will address corporate liquidity, franchisee financial stability and the expected closures in her comments. We think this is the perfect time to strengthen our global footprint and set ourselves up for stronger growth in the future. While we know the full recovery of the global economy is not imminent, we are encouraged by the upward trend in sales and store reopenings that both of our brands have experienced in the second quarter worldwide. We always say that our number one asset is our relationship with our franchisees.
We knew we had a great franchise system and that has never, never been more evident than during this crisis. Because of our solid relationships, we were able to come together with our Dunkin' and Baskin-Robbins franchisees to make necessary marketing and operations decisions quickly, including measures focused on crew and guest safety. Taking much of the bureaucracy out of our decision-making process and enabling faster to market solutions and innovation, this will continue to serve us well in a post-pandemic world. These are lessons we won't forget when the current health crisis is over.
So with that, I will hand it over to Scott to provide more detail on the Q2 performance for Dunkin' U.S. Scott?
Scott Murphy -- President, Dunkin Americas
Thanks, Dave. During the second quarter, Dunkin' U.S. same-store sales fell 18.7%, but improved sequentially each month. With COVID at its peak, April was down 32%; then May down 17%; and June, only down 9%. We effectively cut our losses in half each of the three months of the quarter. Through the week ended July 25, sales have been down low-single digits, continuing our solid recovery from the pandemic. In fact, with the morning commute largely on hold, I'm quite pleased with the state of the business. A large part of the recovery was due to us sticking to our blueprint for growth strategy, which from day one has been all about allowing guests to get in, get out and get on their way. That strategy is paying off for us today where guests want to grab a beverage and a snack in a safe, low-touch environment. You'll recall that the three main pillars of our blueprint: our menu evolution, digital transformation, and convenience and accessibility. The blueprint has served us well. And if anything, COVID has allowed the strongest parts of our business to rise to the top.
So let me start with the first pillar, menu evolution. The sequential improvement we saw in Q2 resulted in increased average weekly sales gains of more than 50% from the end of the first quarter to the end of the second quarter. Since the onset of the COVID pandemic, changes in guest routines shifted sales from early morning to mid-day, particularly 11:00 a.m. to 2:00 p.m. and our product innovation has addressed that shifting consumer visits to Dunkin'. Espresso sales have been resilient during COVID and new specialty beverages such as matcha lattes performed well, particularly in newer markets. Both have strong appeal to Dunkin' customers coming later in the day and are more difficult to replicate at home. All varieties have great attachment rates and healthy margins for our franchisees. During the final two weeks of the quarter, we launched Dunkin' Refreshers with an initial $2 offer, which drove high trial by new and existing gaps, including a younger, more female demographic. Dunkin' Refreshers have been our most successful new product offering since Cold Brew in 2016, and they also appeal to an afternoon customer looking for a Pick Me-Up.
Dunkin' Refreshers have a high attachment rate of 70% and an average check just under $7 and they also appear largely incremental. A significant portion of our loyalty guests who bought Dunkin' Refreshers have continued purchasing their regular beverages in addition to this new product. The new Dunkin' snacking products also appeal to a mid- day customer. Croissant Stuffers and Snackin' Bacon, which pair perfectly with our iced beverage lineup and carry an attachment rate of greater than 95%. But I want to note that even as we add new items, we are laser-focused on reducing operational complexity in the restaurants, so crew members can focus on our enhanced safety and cleaning protocols. Croissant Stuffers and Dunkin' Refreshers are two great examples of successful products that are simple to make, high-margin and, most importantly, delicious. Looking forward, we'll continue to focus on beverage and food innovation designed to satisfy all day snacking occasions, such as our recently launched ham and cheese and bacon and cheese roll-ups. And lastly on menu evolution. We are continuing our high-volume smart brewer installations and expect to be complete in the first quarter of 2021.
The smart brewers will enable us to expand our variety of drip coffee blends, reduce waste and, most importantly, enhance quality and consistency across the system. Now on to the second pillar, digital transformation. Another bright spot during the quarter was our Perks performance. Perks active enrollment increased nearly 110% year-over-year in Q2. Perks transactions as a percentage of rooftop finished the quarter at just over 20%, a nearly 600 basis point increase versus last year. With more customers preferring low-touch service, we also saw an increase in On-the-Go orders, finishing at 7% of transactions for the system, a 300 basis point increase year-over-year. And in non drive-thru locations, it was 14%. By the end of Q2, curbside ordering represented 2.4% of sales in the approximately 1,400 locations that offered it. Delivery also was on the rise in Q2, led by the expansion of our Uber Eats deal. We now have approximately 4,000 stores live with Uber Eats and 4,700 stores on Grubhub's platform. In total, as of the end of June, Dunkin' offered delivery in more than 5,700 restaurants nationwide. During the second quarter, we leaned in on value through our digital channels as well.
Value offers such as free donut Friday, were highly effective at driving Perks enrollments, reactivation and engagement. They were also profitable programs for our franchisees since a full-priced beverage was required for the donut. In total, digital orders, inclusive of Perks, On-the-Go, delivery and curbside, grew to 18% of sales from 13% a year ago. We've made great progress, and I'm excited to welcome Phil to the team to take us to even new heights. And finally, the last pillar, convenience and accessibility. We continue to look for ways to make the Dunkin' brand more convenient and accessible. Whether that's through these digital technologies, our store footprint or our CPG business outside the restaurants. First, let me start with our store footprint. During Q2, Dunkin' U.S. franchisees opened 42 new units but closed 82 restaurants for a negative net development of 40 restaurants. This includes the closure of 10 of the previously mentioned Speedway self-serve locations. Franchisees also completed 34 remodels during the quarter, bringing our total number of NextGen restaurants to approximately 700. Kate will add more specifics later on, but let me talk for a minute about NextGen.
Our NextGen design with its emphasis on faster, contactless service seems tailor-made for customers during this health crisis. Approximately 90% of new NextGen locations have a drive-thru, compared to approximately 70% of our existing fleet. In fact, the power of the drive-thru was never more evident than during COVID. When we closed dine-in service, our strong base of restaurants with a drive-thru, both NextGen and previous designs, continued to deliver at levels we've never seen before in our system. Drive-thru significantly outpaced non drive-thru through stores, showing mid-single-digit positive comps in the last two weeks of the quarter. It's a great example of our operators capitalizing on their biggest asset. Great coffee fast in a low-touch environment and we've already made several drive-thru enhancements to the fleet with many more to come. We're also tweaking the NextGen design as well, incorporating many COVID learnings and developing a low contact store design that has options such as removable seating, no-touch faucets, larger On-the-Go pickup areas, a walk-up window, and a reconfigured frontline layout to further encourage social distancing for customers in the queue.
Basically, we are not resting, and we'll continue to evolve our operations to meet our changing customer needs. Our strategy to make Dunkin' more accessible also includes bringing our products to customers outside the four walls of the restaurant. And I'm pleased to announce that our total CPG business surpassed $1 billion in retail sales in Q2 on a rolling 52 weeks. We entered into this business 13 years ago with bagged coffee and have steadily grown it through new product offerings and initiatives, including adding 150 individual SKUs to our CPG lineup over that period. Packaged coffee and K-cups continue to lead our CPG business with more than $750 million in total retail sales and had one of the strongest quarters ever during the height of COVID. It's hard to believe it's almost August, but I want to publicly thank our franchisees for their tireless efforts during these past several months.
Ensuring the safety of our crew and our customers remain our top priority. And it's not easy. It takes deliberate focus every single day, and that's what our franchisees are doing across the country as we help America open back up. So in closing, we are strong, our franchisees are strong, and our model is strong. During the quarter, we doubled down on the core fundamentals of our blueprint for growth and saw a nice sequential recovery to the business. Together with our franchisees and supplier partners, we'll continue to stay focused on delivering great coffee fast, safely, reliably and with Dunkin' pride.
Now I'll turn it back to Dave to cover Baskin U.S. and international.
Dave Hoffmann -- Chief Executive Officer And President
All right. Thanks, Scott. Moving to Baskin. Baskin-Robbins U.S. showed impressive sequential improvement in Q2 with a negative 6% same-store sales performance for the quarter and posted positive comp store sales for the final two months of the quarter. With stay-at-home advisories widespread during the quarter, guests increasingly sought out the convenience of Baskin-Robbins delivery and online cakes, quarts and novelties. We quickly launched at-home, do-it-yourself Sundae Kits and DIY Polar Pizza Kit as well. Delivery sales were up more than 250% and online sales of cakes, quarts and novelties were up more than 150% versus the prior period. Delivery sales peaked at more than 500% growth year-over-year in late April. Delivery is now available in 93% of Baskin-Robbins U.S. shops and represented greater than 5% of sales mix in those locations in the second quarter. Online sales were further driven by at-home celebrations for Mother's day and Father's Day, and there is nothing better for these family celebrations than a Baskin-Robbins ice cream cake and a do-it-yourself Sundae kit.
As with Dunkin', digital technology is driving the Baskin-Robbins business, and we expect that trend to only continue which is why digital is a critical part of our Baskin-Robbins raising the bar strategy. And now to International. We're in Q2, and it will be a common theme, similar to previous quarters, delivery continued to drive growth. This quarter, delivery sales for Baskin-Robbins and Dunkin' International nearly tripled compared to last year, driven by innovations like social media ordering, order ahead and curbside pickup. Baskin-Robbins Korea, a real standout during the crisis had mid-single-digit same-store sales with delivery and mobile coupon offers engaging customers in the market. Cake sales also had an impressive performance in Q2 across International. Similar to what we experienced in the U.S., people were staying home to celebrate holidays and Baskin-Robbins ice cream cakes made these at-home celebrations more festive.
In Saudi Arabia, cake sales doubled from 10% pre-pandemic to 20% during the pandemic. And similar to the work we are performing with our domestic franchisees, international licensees are also assessing their real estate portfolio, and we continue to work with these licensees to upgrade the asset base by closing low sales volume stores and off-strategy locations to strengthen the system for future growth. Strategic Baskin-Robbins store closures in Japan, Russia and India primarily drove the negative Q2 net development results.
And now I'll turn it over to Kate to cover our financials. Kate?
Kate Jaspon -- Chief Financial Officer
Thanks, Dave. As Dave mentioned earlier, we're pleased that our Board of Directors reinstated our regular dividend program and authorized and declared a quarterly dividend of $0.4025 per share for the third quarter. During the second quarter, we also repaid all of the $116 million that we had borrowed under our variable funding notes. The reinstatement of our dividend and the repayment of the borrowing under the VFN reflects the overall financial health of Dunkin' brands and our commitment to shareholders. Given the strength and stability of our franchise model, our franchisees ongoing business recovery and our ability to leverage G&A, we remain confident in our ability to maintain appropriate liquidity through the current crisis even if a second wave is to occur. I'm going to start with the franchisee business health. We believe, based on conversations with franchisees and their attendance on our various webinars, that a majority of our U.S. franchisees applied for and many received assistance under the CARES Act.
Overall, we still anticipate the average franchisee operating cash flow by the end of fiscal 2020 to approximate 80% of where we expected it to be at the beginning of the year. As mentioned last quarter, this 80% reflects a representative estimate for a traditional Dunkin' stand-alone restaurant that received government assistance. We are seeing pockets of strong recovery. Obviously, the impact, our franchisees are experiencing, has not been spread equally. But as we discussed earlier, our newer markets, such as parts of the Midwest, Southwest and West, are recovering much faster as they have significantly more drive-thrus and are experiencing strong beverage sales. Our urban markets, like Manhattan and Boston, are both still challenged, as offices and businesses remain closed. Sport facilities, transportation hubs and college campuses remain closed as well. Many locations in these downtown and other markets also don't offer the convenience of a drive-thru. We continue to closely monitor the performance of the most impacted urban and other markets and remain in regular contact with our franchisees about the economic conditions of their networks in these areas.
We have seen slight sales and traffic and improvements on a week-to-week basis in many of these markets, although sales in most downtown business areas have been slow to return close to pre-COVID levels. We continue to evaluate financial assistance opportunities for select networks and continue to advocate on behalf of this heavily impacted primarily urban franchisee population. Our goal remains to reinforce the financial stability of our franchisee networks in these markets so that they are well positioned when traffic returns closer in line with previous levels. We're always looking for ways to improve our business from corporate to the franchisees. As Dave mentioned earlier, we decided to take this time to work with our franchisees to assess our real estate portfolio and set the Dunkin' U.S. system up for continued strong profitable future growth. Baskin U.S. was already working on a similar portfolio rationalization through its raising the bar strategy. For Dunkin' U.S., we said earlier this year, we expected to close 450 Speedway self-serve kiosk locations during fiscal 2020, representing less than 0.5% of our systemwide sales.
With the temporary closures that we had during the COVID crisis, we took the opportunity to accelerate our discussions with our franchisees on whether they were off-strategy locations that are either relocatable or should permanently close. At this time, including the 450 Speedway closures, we believe there could be approximately 800 low volume locations, primarily alternative points of distribution that may permanently close. If all 800 of these locations were to close, they would represent 8% of the Dunkin' U.S. total restaurant footprint, but only around 2% of systemwide sales, inclusive of the Speedway closings. Most of these locations are also unprofitable for the franchisees, with EBITDA margins well below the average for traditional Dunkin' U.S. restaurants and the average weekly sales for the group is approximately 1/4 of the average weekly sales of our system. I want to emphasize these two points. These locations are well below average for both sales and profitability. And more importantly, for many of these franchisees, closing these restaurants will enable them to do greater reinvestment into the brand, whether through next-generation remodels, building new restaurants, and relocating restaurants to higher traffic areas or to where they can add a drive-thru.
We expect most of the closings will take place this year. We believe these closures position us and our franchisees for on-strategy, more profitable future growth. And as Dave mentioned earlier, many of our international franchisees and licensees are also now doing the same assessment. We anticipate that we could see an additional 350 restaurants close internationally by the end of 2020. Similar to the closures in the U.S., these are low volume sales locations, which are unprofitable for our franchisees and licensees. Now to our second quarter financial results. Revenues for the second quarter decreased $72 million or 20% compared to the prior year period due primarily to decreases in royalty income and advertising fees driven by a decline in systemwide sales, primarily for the Dunkin' U.S. segment. Royalty income in Q2 also reflects a reduction of revenue of approximately $8 million related to corporate financial relief provided to franchisees most significantly impacted by the pandemic, many of them in the hardest hit urban areas that I previously spoke about.
Also contributing to decrease in revenues was a $3 million impact from rent waivers provided to our franchisees and a decline in variable rent income due to a decline in systemwide sales as well as a decrease in sales of ice cream and other products. I spoke about the rent waivers on our first quarter call. We waived rental payments for up to one-month and allowed franchisees to defer rental payments for two months on the approximately 900 properties for which we are the landlords. Operating income and adjusted operating income for the second quarter decreased $41 million, or 33.5%, and $40.6 million, or 31.9%, respectively, compared to the prior year period, primarily as a result of the decrease in royalty income and a decrease in rental margin, which includes approximately $2 million of unfavorable impact from rent waivers provided to our franchisees, net of waivers we received from landlords. These impacts were offset by a decrease in G&A expenses, including a decrease in incentive compensation, meeting and travel expenses and reduced nonessential spending in the current year period as a result of the COVID-19 pandemic.
Net income and adjusted net income for the second quarter decreased by $23.2 million, or 38.9%, and $32.3 million, or 44.6%, respectively, compared to the prior year period, primarily as a result of the decreases in operating income and adjusted operating income as well as a decrease in interest income earned on our cash balances, offset by a decrease in income tax expense. The decrease in income tax expense was driven primarily by the decrease in income in the current year period, offset by excess tax benefits of $1.5 million in the prior year period compared to an immaterial amount recognized in the current year period. Also offsetting the decrease in operating income, was a $13.1 million loss on debt extinguishment recorded in the prior year period in conjunction with last year's refinancing transaction. Diluted earnings per share and diluted adjusted earnings per share for the second quarter decreased by 38% to $0.44 and 43% to $0.49, respectively, compared to the prior year period as a result of the decreases in net income and adjusted net income.
Excluding the impact of recognized excess tax benefits, both diluted earnings per share and diluted adjusted earnings per share would have been lower by approximately $0.02 for the second quarter of fiscal year 2019. Recognized excess tax benefits had no per share impact on diluted earnings per share and diluted adjusted earnings per share for the second quarter of fiscal year 2020. Excluding cash reserved for gift cards and advertising funds of $193 million, we ended the second quarter with $291 million in unrestricted cash held domestically and $32 million held in accounts outside of the United States. As required under our debt agreements, our restricted cash reserve of $95 million includes approximately three months of debt service amounts, including principal and interest. We continue to manage our liquidity very closely by controlling our operating and capital expenditures, and we continue to control all nonessential spending. By making smart tactical decisions around reducing or delaying certain expenses, we have been able to significantly reduce our outlay of cash while also managing the business for the long-term and ensuring we best position ourselves for the future.
The beauty of our model is our ability to leverage our G&A. Our average monthly G&A and capex cash spend prior to the pandemic was approximately $20 million to $25 million. We continue to estimate that our revised average monthly G&A and capex cash spend will be approximately $15 million to $20 million until the business normalizes. Again, that is outgoing funds for G&A and capital expenditures only. Moving to our leverage. We ended the second quarter with a debt to adjusted EBITDA ratio of 5.3:1. Based on where our leverage finished for Q1, we were not required to make our Q2 2020 principal payment of approximately $8 million. We do anticipate making our normally scheduled Q3 2020 principal payment. We also have $117 million in available capacity under our variable funding notes.
As I noted on our Q1 call, the primary financial covenant under our securitization is a debt service coverage ratio, which is calculated at the end of each quarter on a trailing 12-month basis. The first covenant trigger, a 50% cash strapping event would occur only if our debt service coverage ratio fell below the 1.75 times. We finished the second quarter of fiscal 2020 with a debt service coverage ratio of 3.21 times. In closing, I would like to reiterate the quarter-to-date domestic sales information that was included in our press release this morning. Dunkin' U.S. comparable store sales have been improving week-over-week during Q3. As of the week ended July 25, quarter-to-date comparable store sales were down low single digits for open stores. And similar to Dunkin', Baskin-Robbins U.S. comparable store sales quarter-to-date through week ended July 25, were also down low single digits for open stores.
And now I will turn the call over to the operator for Q&A.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from the line of John Ivankoe from JPMorgan. Your question, please.
John Ivankoe -- JPMorgan -- Analyst
Thank you so much. One of the big, I guess, debates or maybe disagreements that are kind of happening across the industry is the effectiveness or even need of kind of resuming television advertising or even having excess television advertising and the effectiveness of that in the context, obviously, of COVID, protests and the elections, is very, very challenging from a market or really the breakthrough. So can you comment on that specifically for the Dunkin' brand kind of how you see the next six to 12 months in terms of overall impressions, both traditional and digital? And if we can kind of comment on the need to really rehit or rethink some value messaging at the brand to get people back into the stores, be above and beyond what would have normally been the case for 2020?
Dave Hoffmann -- Chief Executive Officer And President
Yes. Thanks, John, good to hear from you. Look, I would say the first thing from a data point, our brand affinity scores are at an all-time high and I'm really proud of what the team has done. On social, as you said, and that's going to continue to be a big channel for us and while we're doubling down on that with the new digital engagement team. But look, I think too early to tell on TV, we still think it has a big role for us going forward. And look, we've got a really good partnership with our DD One media team over there at Publicis that we're working with. And so between our team, we're always constantly evaluating that. I think you'd see us probably go a little quieter in Q3. I don't think I'm tipping any hand here that the return during election year isn't that great in that October period. So you can probably see us go a little bit darker, but that's more because of the cost of the wait and getting bumped rather than TV not being effective. It's just, I think, smart media management by our team. Thanks, John.
John Ivankoe -- JPMorgan -- Analyst
And if I'm still on, anything on the value side that maybe you plan on accelerating over the next six to 12 months?
Scott Murphy -- President, Dunkin Americas
John, it's Scott. The only thing I'd add to that on the value side is, we've seen really good success with Refreshers with that $2 price point that I talked about. So that's a great example where value for trial and getting a new guest and getting them into our restaurants, trying those products, so I think you might see more of that type of activity from us.
John Ivankoe -- JPMorgan -- Analyst
Thank you.
Operator
Our next question comes from the line of David Palmer from Evercore ISI. Your question please.
David Palmer -- Evercore ISI -- Analyst
Thanks. Congrats on the improvements so far. A question on the NextGen program. How has the crisis changed the timetable for those remodels? How many do you expect in 2020 versus what you had expected pre-COVID? And if it's somewhat slower, is that largely going to be made up for in 2021? Is your multiyear target the same there? And I have a quick follow-up.
Scott Murphy -- President, Dunkin Americas
Sure, David. It's Scott. I'll take NextGen. So we're very happy with NextGen as a concept, like I talked about in my comments. Many of the features of NextGen are perfect for COVID and we're even enhancing. As you might imagine, during the quarter, franchisees slowed a little bit on their remodels, just with a lot of uncertainty out there. And so we've seen that and probably will see that for another quarter or so. I will say things are starting to pick up as franchisees are understanding the resilience of the Dunkin' model, especially with drive-thru. So I think we're optimistic, but we're still working collaboratively with the franchisees and trying to make smart decisions. As Kate mentioned, with the strategic closures, that should help the profitability of some of their networks too and free up some cash to make remodels a bigger part of the future.
David Palmer -- Evercore ISI -- Analyst
And on those closures, I mean, did you how did those how did that precipitate? Was it the COVID itself causing reevaluation? Or have you changed your standards at all with regard to the thresholds that you'll allow closures for your franchisees?
Dave Hoffmann -- Chief Executive Officer And President
Yes, David. Look, I'd say it this way, as you know, because you've followed us for a long time. Since this management team took over, we have been focused on quality over quantity and repositioning the brand to be beverage led. These locations weren't part of that future and the crisis allowed us to accelerate the closures and strengthen the portfolio. It was as simple as that. They were unprofitable often for the franchisees, and they've had minimal impact on sales. So we just felt like it was the right management move in collaboration with our franchisees.
David Palmer -- Evercore ISI -- Analyst
Make sense. Thanks very much.
Dave Hoffmann -- Chief Executive Officer And President
Thanks.
Operator
Our next question comes from the line of Eric Gonzalez from KeyBanc. Your question, please.
Eric Gonzalez -- KeyBanc -- Analyst
Hey. Thanks for question. Just curious, can you talk about how your geographic footprint might be a positive or negative in terms of the stores reopening or even workers returning to everyday routines. Clearly, there's been a resurgence in the infection rate in the southern part of the country, including Florida, which I think maybe your third largest state in terms of penetration. So if you could talk about the performance in those markets relative to up north or perhaps comment on the trajectory of recovery in the South versus the North would be helpful?
Dave Hoffmann -- Chief Executive Officer And President
Yes. Look, I the way I would phrase this is, we have done increasingly well in our noncore West emerging markets. And I was just looking for the number here. It's positive in those markets and it's low teens. And so very pleased with the performance there, very pleased. And what's been really surprising, I think, sitting back here watching this is, look, it's hard to we're very well-known in the core markets, as you know, and we're known as a beverage brand. But out West, we were very much known as a bakery and a donut brand. And so when we were the only operation open and people were looking for their beverage, and they discovered us.
And so they came to us and they discovered our beverage lineup. And that and when I said in my remarks that, look, I love donuts and I'm I love when we really get on our donut mojo, but look, we are leaning into beverages in a big way. And so I think our consumers out West and in these noncore markets has really discovered that when we say we're great coffee fast, we're great coffee fast, and they have come to reappraise us. And so we really like how our franchisees have stepped up and how the consumers responded to our brand and so it's a really good bright spot for us during a difficult period.
Eric Gonzalez -- KeyBanc -- Analyst
And then just on the just real quick, if I could sneak this one in. I understand the shift in habits away from that morning commuter daypart. I was just wondering if you have any evidence to suggest how much of the later in the day traffic, you might be able to sustain as normal habits resume?
Dave Hoffmann -- Chief Executive Officer And President
Yes. So we're not giving total guidance on that, but you can imagine that we've we've lost sales from that important six to nine period, but we've gained sales from that 10 to two. I think what really stands out for us is that we can adapt and operate very well outside the commute. And you're seeing that. And so if you step back and you've heard me talk about the plan that we've been driving, the blueprint for growth for a number of years, it's built around menu evolution, digital transformation, convenience and accessibility. On the menu side, our espresso investments continue to pay big dividends. During this crisis, matcha has been a big hit for us. The Dunkin' Refreshers right now have been a big hit. You couple that with snacking, beyond sausage wake-up wrap, we were first probably one of the first big brands in the market with that, and that wake-up wrap has done really well during this, our roll-ups, our Croissant Stuffers, all really good attachments that speak to that second daypart.
And then just throwing in our Stephanie Meltzer-Paul's in the room here, but throwing in our digital transformation and our full suite of digital assets that we have unlocked. And there have been many from curbside to multi-tender to reduced ordering steps to delivery in 4,000 to 5,000 locations. So the combination of those two with a brand that was already fast. 90% of our transactions pre-pandemic were some form of takeaway. We've been able to give the consumer access to our to the brand on their terms safely. And I think that under the umbrella of the blueprint for growth, and we're tweaking a few things, but that's really paid off for us.
Eric Gonzalez -- KeyBanc -- Analyst
Okay. Thanks.
Operator
Our next question comes from the line of John Glass from Morgan Stanley. Your question, please.
John Glass -- Morgan Stanley -- Analyst
Hi. Thanks very much. First, can you just comment on your assessment of the store portfolio and the closures? Starbucks has looked at their urban market and said, we just need fewer stores and maybe smaller stores. Was that part of this assessment? Or how you think about your urban footprint now going forward? Is that same kind of rationalization potential in the future? Do you think what you've done now is sort of conclusive and you don't need to address those urban markets?
Dave Hoffmann -- Chief Executive Officer And President
Yes. John, yes, good to hear from you as well. Look, we before the pandemic, like I said, 90% of our transactions were some form of takeaway. So we were the brand that was get in and get on your way, and that has paid dividends very well during this pandemic. And so look, these closures were low volume-driven, off-strategy, like some of the gas convenience with Speedway, as you know, and that was a mutual decision by both brands. So it was really more around that quality over quantity, more around some things were just not right for our future as we were leaning into beverages and so it was and not profitable for the franchisees. So it was a combination of those versus we are doing a dramatic rethink of us remaining in urban. There's a great place for us in urban, and we're seeing as the economy opens up, we'll continue to do well in those markets right now. So this is in terms of a good scrubbing of the portfolio and being opportunistic during this time period, we felt like this was the right move, and we felt like you guys would respond positively to it as well.
John Glass -- Morgan Stanley -- Analyst
Yes. And just as a follow-up, how much of the comp recovery has been checked. It sounds like the later day, it's maybe different beverages, maybe something you wouldn't have ordered in the morning, there's the higher food attachments, so how much of the improvement's really been check driven? Or is this really just people get actually higher frequency coming back to the brand and traffic?
Dave Hoffmann -- Chief Executive Officer And President
A big piece of it has been check-driven, and we see it in the number of items. But think about it, John, and think about your behavior as well. Like when you're going out, you're ordering for probably three or four people in the household, and where if they were commuting, they were coming in a single. So right now, we're really looking hard at that traffic number as well, but we're pleased with the attachments. We're pleased how the consumers are responding to our offerings that are great in the morning, but are really great in that afternoon daypart as well and the snacking items that are being attached. So we like how we're positioned right now with our menu that's covering two different dayparts. And so that's how I think we're well positioned as we go into the fall here as well.
John Glass -- Morgan Stanley -- Analyst
Okay. Nice job. Thank you.
Operator
Our next question comes from the line of Sharon Zackfia from William Blair. Your question, please.
Sharon Zackfia -- William Blair -- Analyst
Hi. Good morning. I know you mentioned that consumers in the West are discovering the brand in a different way for Dunkin'. But I'm also curious during this unique time, if you think your customer funnel is just overall widening and if so, if there's any kind of demographic or region where you think new to Dunkin' is just outsized. And anything any other color on that, I think, would be very helpful?
Scott Murphy -- President, Dunkin Americas
Sharon, it's Scott. I think you're exactly right. I think during this pandemic, when we've essentially stayed open throughout this whole thing, given our drive-thru and our ability to operate through the crisis. So I think we're getting a lot of new consumers that we've never seen before. And what we're trying to do with our portfolio of products, like Dave mentioned, is show the world that we've got other products. So when people were coming in that hadn't been to Dunkin' in a while, and they're seeing we've got great espresso, we've got matcha, we've got these refreshers for maybe a value-conscious consumer or that younger female demographic, absolutely, the funnel is getting bigger for us. And then our challenge as a system is how do we retain them as other people start to open back up. And I think given our repeat purchase that we're seeing on a lot of these products, we've been able to retain them and we're very excited about that.
Sharon Zackfia -- William Blair -- Analyst
Do you have any concrete metrics you could share on kind of what the new to Dunkin' or lapsed user rate has been recently versus where it was pre-pandemic?
Scott Murphy -- President, Dunkin Americas
Probably nothing that we'd share today. We are using our digital details that we have from our Perks and loyalty program to look at that, but nothing to share today, Sharon.
Sharon Zackfia -- William Blair -- Analyst
Okay. Thank you.
Operator
Our next question comes from the line of Jeffrey Bernstein from Barclays. Your question, please.
Jeffrey Bernstein -- Barclays -- Analyst
Great. Thank you very much. Just a question as I think about the broader category of coffee and breakfast. It seems like the independents have historically dominated the category in terms of units. But with that as a backdrop, I guess, two-part question. One, are you expecting significant industry closures, which would allow you to gain market share and perhaps accelerate unit growth with better real estate, so any color on that? And then two, many think of your franchisees as independents running just a handful of restaurants each. Just wondering why you think they're better positioned than maybe true independents or I mean maybe they're similar, which would explain the uptick in closure plans. So just anything you're doing to help those struggling beyond the rent waiver, as you mentioned, will be great?
Scott Murphy -- President, Dunkin Americas
Jeffrey, it's Scott. I think a couple of things I'd say to that. One, I do think there's going to be some industry closures, especially from the independents. We've all seen and read a lot about that in the news. And I think the advantage our franchisees have, yes, there are local business owners in the community average seven stores per network, but they're connected to a bigger brand, right? So they've got the advantage of that national advertising. They've got the support and infrastructure of an office here with all the safety protocols. And being part of that bigger system, I think, gives them a lot of the advantages whether that be supply chain access to products, whether that be negotiating better pricing or some of the leverage we've had with landlords and other activities out there to help the P&L. So I believe our Dunkin' franchisees are uniquely positioned to have the best of sort of the small business aspect as well as the best of being part of one of the largest coffee companies in the world.
Dave Hoffmann -- Chief Executive Officer And President
Yes, Jeff, and if I could just add to that as well. Look, if you just take a step back and say, our brand is a high frequency, low touch, affordable ticket. For 70 years, we positioned ourselves as the get in, get out, get on your way brand, and that's playing well right now. And we were one of the first brands that flexed into enhanced safety measures and the consumer is responding. So we really like what's going on in terms of if you call it culling of the herd during all of this, yes, we are starting to see closures, and we are starting to see pain points out there. And you would expect that there's going to be opportunities for our franchisees to either relo a site to take advantage of sites, new store openings, etc.. But too early to give you a sense of how much that's going to impact us, but we are starting to see that out there in the marketplace.
Jeffrey Bernstein -- Barclays -- Analyst
Thank you.
Operator
Our next question comes from the line of David Tarantino from Baird. Your question, please.
David Tarantino -- Baird -- Analyst
Thanks. I have a question that's very related to the last one. And I guess, it's about growth in the U.S. and Dave or whoever wants to take this one, can you comment on how franchisees are positioning for growth heading into next year? It seems like the environment could be good. And just wondering if when we get past all the potential closures here, are we going to see a return to growth as early as next year? Or is that getting pushed further out?
Scott Murphy -- President, Dunkin Americas
David, it's Scott. I think that's certainly our hope. We've had a lot of conversations with our franchisees. Last quarter and probably this quarter too is still about reading the tea leaves and letting things settle, but I would expect franchisees to deliver on exactly what we've talked to them about, which is sort of a double-barreled approach, which is the scrubbing of the asset base, like Dave mentioned, and really preparing that for more efficient, profitable growth, like Kate mentioned. So cleaning up the portfolio, getting the networks more profitable and then looking for those relos, those remodels because I think what we saw during Q2, stores with a drive-thru four times better than a non drive-thru store. So the desire is out there from our franchisees to get to better positioned assets that would involve the digital and speed assets to make sure they can perform.
Kate Jaspon -- Chief Financial Officer
And David, this is Kate. Just wanted to add one more thing. Unlike the 2008-2009 recessionary period, our franchisees are not having difficulty accessing capital. So lenders are willing to lend, particularly to our system for both remodels and new store openings, so that's an encouraging sign.
Dave Hoffmann -- Chief Executive Officer And President
And David, sorry for the 3-way jump on here. But I recall, if you remember in the memory banks, one of the first questions you asked when I arrived at Dunkin' was about California and the West. And look, I this pandemic has been awful and I wouldn't wish this on anyone. But if there was a bright spot to come out of this, it would be our performance out there in those markets and I can't stress that enough. Positive low teens on same-store sales during the quarter. And our California franchisees, our Texas franchisees, all of them out west and these emerging markets are really enthused. The enthusiasm is at an all-time high and I just know that's going to translate into growth as well.
David Tarantino -- Baird -- Analyst
Great. Thank you very much.
Operator
Our next question comes from the line of Dennis Geiger from UBS. Your question, please.
Dennis Geiger -- UBS -- Analyst
Great. Thank you. Could you just talk a bit more about operations throughput, I guess, speed of service in the current environment. Just curious, any key metrics on that front relative to the last year or kind of relative to when they started in March and April. I guess trying to get just get a sense for how big of an unlock speed has been to the impressive sales recovery that you've seen and where you guys think you can go from there as it relates to throughput and the impact on sales?
Scott Murphy -- President, Dunkin Americas
Dennis, it's Scott. Great question. We've actually seen an improvement throughout the quarter on speed. At the beginning of the quarter, we actually slowed a little bit given the chaos and everything that was happening. But what franchisees were able to figure out is, how to better deploy folks on the frontline. And by frontline, I mean the drive-thru as well. So in a lot of cases, when we closed dine-in, a lot of restaurants actually redeployed people exclusively on the drive-thru and we figured out how to operate more quickly through the drive-thru with throughput. And it happened with without a lot of rocket science. It happened with a lot of sort of brute force and grit. So whether that was lawn signs sort of handmade preview boards, product stage and the drive-thru windows, we did things to make the operation more efficient, and then we leveraged our digital tools.
So On-the-Go ordering through the app, traditionally, when you place that order through the drive-thru, we didn't start making the product until you arrived at the speaker post and we made a strategic technical change early on in COVID, so that those orders fired automatically, and it gave the crew more time to make those products, so they were ready, and we've really speeded up the drive-thru toward the second half of that transaction. So very happy with the throughput. Although I'll say we're never satisfied, and we're continuing to look at additional enhancements for the drive-thru moving forward. Even things like line-busting tablets were necessary, the digital drive-thru through menu boards, a high-definition headset, all sorts of elements, including some upselling technology on the screens as well.
Dennis Geiger -- UBS -- Analyst
Great. Thanks, Scott.
Operator
Our next question comes from the line of Matthew DiFrisco from Guggenheim. Your question, please.
Matthew DiFrisco -- Guggenheim -- Analyst
Thank you. Can you give us an update on the NextGen stores? Just what you're seeing as far as, I think, the 700, how they'd compare in AUV or potentially the investment to the relative lift? And then just wanted a little bit of a bookkeeping thing here for our modeling purposes. The Boston and New York stores that represent 4% of your footprint that are temporarily closed, can you put that into terms of percent of system sales, please?
Scott Murphy -- President, Dunkin Americas
So I'll answer the first one. So NextGen, it's a little bit difficult during the quarter for NextGen comparisons only because a lot of the NextGen's were in sort of these core markets like Boston or like New York. So it's a little hard to do that comparison. But I will tell you the NextGen's are performing just as well now as they were before, which means the economics on that return are still better than the traditional designs with the franchisees, so we feel good about the model. But we are continuing to tweak it. I talked about the low contact option that we're looking at. We're also looking at a couple of other NextGen design tweaks that maybe are more exterior-focused, more drive-thru-focused initially to basically double down on the things we saw that worked during the pandemic. And then, Kate, do you want to answer the second question?
Kate Jaspon -- Chief Financial Officer
Yes. I mean, obviously, we have never broken down specific [Technical Issues] regional or DMA areas. Boston and New York, obviously, being two of our largest DMAs. What I will say without giving direct guide or an answer to that is, even though urban stores are down, specifically in Manhattan and the downtown Boston area, we have we do believe that many of those sales have shifted from urban to suburban in those markets. And so as you can tell by our total comp performance, the Massachusetts and New York and surrounding markets are still seeing we don't believe we've completely lost that transaction. So I understand where you're trying to go with that, but don't want to give specific percentages on the downtown DMA.
Matthew DiFrisco -- Guggenheim -- Analyst
Okay. But 4% of a footprint, is that something that we should think about as far as just the lost opportunity as they remain closed and wait for them to reopen?
Kate Jaspon -- Chief Financial Officer
No. I wouldn't think of it that way. Several of the stores in Manhattan and Boston are consolidated locations, so you may have a store. If you think about on a block, maybe we have four stores in the Boston area on a block, maybe we're down to two as opposed to four, and maybe the hours are reduced in the afternoon. But and go ahead, Scott.
Scott Murphy -- President, Dunkin Americas
No, I was just going to say, and you got to remember, of that 4%, a lot of that are, what we call, alternative points of distribution, which are relatively low volume stores. So probably 70 traditional locations that if you think about that impact on the total fleet is not significant.
Dave Hoffmann -- Chief Executive Officer And President
Matt, if I can jump in here and give you the way that I would also think about this, and I think all of you should put this into the model a little bit. With a dramatically reduced commute, limited hours, closed lobbies in our two largest markets being New York City and Boston continuing to emerge slowly and we're hitting negative low-single digits month-to-date in July. I think that speaks to the resiliency of our franchisees, our employees and what a great brand we have. So that's how I think about it. When you look at all those other pieces, and how we've been able to navigate beyond just being a commuter brand and how we've been nimble on making great decisions and our franchisees have been in the communities, doing the right things and serving them, this is where our franchise system really stands up, 100% franchise system really stands up, because you've got real leaders in those many markets today.
Matthew DiFrisco -- Guggenheim -- Analyst
Indeed. Thanks.
Operator
Our next question comes from the line of Francfort, Gregory from Bank of America. Your question, please.
Francfort Gregory -- Bank of America -- Analyst
That's what I get, I guess, for giving my last name first. But the just one question I had was, it seems like I think at the beginning of pandemic, there was a lot of concern on the breakfast category and you guys seemed to be outperforming pretty well. And I'm curious where you think the share is coming from? Is this convenience stores where people might not want to I don't know if they don't want to touch kind of the milk canisters. Or do you think this is coming from some of the sit down breakfast category players? I'm just curious where you might be taking share from even if the category is under pressure?
Scott Murphy -- President, Dunkin Americas
Yes. I think first off, I think the thing that helped us the most was our accessibility and that we stayed open, right? So even at the peak of COVID, it was a small percentage of the total asset base that was closed for a short amount of time. So we were an option in many markets. The second was how people could use us, right? So through the drive-thru, through paying with their phone, On-the-Go order ahead or curbside or delivery. So we gave them all those options that, frankly, a convenience store doesn't have or some of the other chains, that close whole scale markets weren't available. So I think that's where we probably took share from. And like I said before, the timing was perfect because as we pivoted and put these new sort of modern products out there, whether they were the snacking options or the refreshers or the matcha, they were exactly what the consumer wanted, and it's been a nice match.
Francfort Gregory -- Bank of America -- Analyst
Thank you.
Operator
Our next question comes from the line of Lauren Silberman from Credit Suisse. Your question, place.
Lauren Silberman -- Credit Suisse -- Analyst
Thanks. Kate, you highlighted you still expect franchisee cash flow by the end of the year to be about 80% relative to the beginning of the year. I would have thought maybe top line recovery would have been faster than initially expected. So are there any other factors to consider there and what comp is embedded in that last outlook? And then any kind of thoughts or commentary on where franchisee margins are trending, given recent changes, whether that be limited hours or limited operations to the drive-thru?
Kate Jaspon -- Chief Financial Officer
Yes. Thanks, Lauren. So we're not going to guide on the comp for this year, just given the fact that we what's happening in the current state and we don't know what's going to happen with the pandemic. But when we did the initial estimate, we had put in assumptions for the traditional stores, what we were seeing in our drive-thru stores as well as what we were seeing for government aid that had come through. And as we moved through the second quarter and into the third quarter, we are seeing slightly improved and better sales performance than we thought, but franchisees are also extending their operating hours. And as Scott and Dave have mentioned, bringing new innovation [Technical Issues] we had factored in those things that if sales have lifted that we would start to invest back in more into the business. So we still continue to believe that 80% is the right number, assuming that our assumptions don't change because of the pandemic.
Lauren Silberman -- Credit Suisse -- Analyst
And what percentage of your stores currently have lobbies open? And how are you thinking about that reopening?
Scott Murphy -- President, Dunkin Americas
Yes. So we two things I'd say. We've got about 1,000 stores that have what we call dine-in available right now. We've paused for a little bit as we've seen cases increase across the country, but we continue to make the right decision in each of the communities. And I would just say, when we open the dining rooms for dine-in remember, they're still open for On-the-Go, for takeout, for ordering at the front counter and takeaway, but the sitdown dine-in option doesn't make a giant difference with a drive-thru store. It turns out consumers are still preferring to go through that drive-thru. And frankly, per your earlier question, the profitability for franchisees, if they can focus just on that drive-thru lane may actually be the same or better. So that's how we're looking at it right now. We'll pause for a little bit as we watch the case lift in COVID across the country, but about 1,000 right now have the dining rooms open for dine-in.
Lauren Silberman -- Credit Suisse -- Analyst
Thanks so much.
Operator
Our final question for today comes from the line of Chris Carril from RBC Capital Markets. Your question, please.
Chris Carril -- RBC Capital Markets -- Analyst
Hi. Thanks and good morning. So with the reinstatement of the dividend and the repayment of the borrowings under the variable funding note, how do you think about capital allocation priorities today? And would you anticipate potentially resuming share repurchases this year, just given your strong liquidity position?
Kate Jaspon -- Chief Financial Officer
Chris, this is Kate. So obviously, our strategy and our capital policy on returning cash to shareholders hasn't changed. We certainly are in discussions with our Board on how best to use our cash. I think at this point, it's safe to say, given the uncertainty of how long the pandemic will last and potential needs of cash in the future, we are not currently in the market repurchasing stock and don't anticipate to right now. I can't give any future answer on what we will do. But I will also say that we mentioned as a majority of our franchisees did borrow funds under the CARES Act with the government. And although we did not borrow, had we borrowed, we would be prohibited from repurchasing stock. So it's just something that we keep in mind as a good business practice and a responsible citizen as we consider those decisions with our Board.
Chris Carril -- RBC Capital Markets -- Analyst
Great. Thank you.
Kate Jaspon -- Chief Financial Officer
Thank you.
Operator
And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dave Hoffmann, Chief Executive Officer, for any further remarks.
Dave Hoffmann -- Chief Executive Officer And President
Yes. Thanks, everyone, for, again, joining very early here. Look, just in closing, I think Q2 just speaks to the customer has responded to how we conducted ourselves during this crisis. And us being our franchisees and the brand, choosing people over profits. As you've heard me say before, doing the right thing in the communities we serve and smartly adjusting to what we believe are the two biggest forces that the customers are asking for: make me feel safe and give me access to your brand on my terms. So we're going to continue to be guided by doing the right thing in the communities we serve, and we think that's going to deliver the right thing for the business as well. So thank you, everyone. Have a great day. Talk to you soon. Bye-bye.
Operator
[Operator Closing Remarks]
Duration: 69 minutes
Call participants:
Stacey Caravella -- Sr. Director, Investor Relations
Dave Hoffmann -- Chief Executive Officer And President
Scott Murphy -- President, Dunkin Americas
Kate Jaspon -- Chief Financial Officer
John Ivankoe -- JPMorgan -- Analyst
David Palmer -- Evercore ISI -- Analyst
Eric Gonzalez -- KeyBanc -- Analyst
John Glass -- Morgan Stanley -- Analyst
Sharon Zackfia -- William Blair -- Analyst
Jeffrey Bernstein -- Barclays -- Analyst
David Tarantino -- Baird -- Analyst
Dennis Geiger -- UBS -- Analyst
Matthew DiFrisco -- Guggenheim -- Analyst
Francfort Gregory -- Bank of America -- Analyst
Lauren Silberman -- Credit Suisse -- Analyst
Chris Carril -- RBC Capital Markets -- Analyst
