William Rosenberg

Nation's Restaurant News, Feb, 1996 by Robin Lee Allen

William Rosenberg, founder of Dunkin' Donuts, enjoys watching the ranks of once-forbidden franchisees in the International Franchise Association grow.

Allowed membership only three years ago, not only has the group mushroomed the IFA's size from 1,000 to more than 28,000, but it also has begun to fulfill Rosenberg's idea of what the association, which he also founded, should be.

"When I drew up the bylaws originally, the membership was franchisors, franchisees and suppliers to the industry," he explained. "But the franchisors were fearful that if the franchisees were allowed, they would be outnumbered."

While the franchisors were correct, they under estimated the clarity of Rosenberg's crystal ball when he forecast that the franchisees' exclusion would create far more problems than would their inclusion.

By the early 1990s franchisors were fighting a huge volume of franchisee-rights legislation at both the state and federal level. Some cases they lost.

"All of the problems I foresaw started," Rosenberg said, "but I thought it would take 10 years, and it took 35.

"It's impossible to be a successful franchisor with unsuccessful franchisees," he continued. "Why the hell are we on different sides of the fence when we're in the same boat?... The dummies that run franchise companies are learning that it's better to be on the same side."

Rosenberg knows. An early entrant in the franchising industry, he opened a doughnut shop in 1946 that today has 3,500 outlets worldwide -- the majority franchised -- and annual sales nearing $1.5 billion. Pleasing his customers -- both franchisees and patrons -- has always been his credo.

Former franchise lawyer Steven R. Siegel became a Dunkin' Donuts franchisee eight years ago for that very reason.

"Dunkin' clearly represented to me the best in how it made the system work between the franchisor and franchisee," explained Siegel, a principal of Watermark Donut Co., which operates 35 shops in the Boston and Hartford, Conn., areas. "It was built by Bill Rosenberg on the theory that both groups had to communicate and work together to build a successful system."

Rosenberg's foresight is well known to those who know him.

"He's visionary," stated his son, Robert M. Rosenberg, now president and chief executive of Allied Domecq Retailing U.S.A., which includes responsibility for the Randolph, Mass.-based Dunkin' Donuts chain.

"He has the ability to see broad patterns and see opportunities," he explained. "He can see things other people haven't been able to see."

Rosenberg proved his innate business savvy long before he recognized the profitability of caffeine, breakfast foods and multiunits -- which he still did far ahead of most others.

A native of Cherry Valley, Mass., the Depression forced him to leave school in the eighth grade to take a position with Western Union. His father had lost his job at a local market, making Rosenberg the sole supporter for his parent and three siblings. Although he had held previous jobs, like delivering rolls, it was delivering messages that fomented his ambition and drove home some important lessons for later.

"I became the highest-commissioned kid at Western Union," he remembered. "I learned that I could get more tips if i was nice to the customer, pedaled hard and worked hard."

At 17, he took a job driving an ice-cream truck and turned around a previously failed route. Within four years he was managing the ice-cream business in Connecticut. A few years later, after proving his ability to place ice-cream vending machines, he was brought back to Boston as the national sales manager of the company's vending division.

Although Rosenberg proudly aligns himself with other hospitality successes who dropped out of school, like Willard Marriott, Howard Johnson and Dave Thomas of Wendy's, his lack of formal education has made him a huge proponent of education. He has endowed chairs at both Harvard University and the University of New Hampshire, and he encouraged his son to attend both Cornell University and Harvard to prepare him for the task of running Dunkin' Donuts.

"He's very paradoxical," Robert Rosenberg noted. "I suspect he has mixed feelings. But he's clearly acted in a way that [shows] he understands the importance of education but doesn't want to diminish the entrepreneurial spirit. He sees it as a complimentary team, and we were fortunate enough in our history to benefit from both."

Shortly after William Rosenberg returned to Boston, World War II was heating up. A father of two whose two brothers were in the army, be was urged to put his talents to better use.

"The draft board said, `Get into something essential,' " he recalled. "So I got into union shipbuilding. ... I was essential, so I kept getting deferments. I got 11 deferments.

His brother, Donald, was not so fortunate. A lieutenant in the U.S. Army, he did not return from the war. To honor his memory, Rosenberg fulfilled their plan to go into business together. How ever, he did it alone.

After considering many options, he struck up a partnership with an industrial catering firm in Bridgeport, Conn. Although he grew the business considerably, ethical disagreements with his partners forced him to leave with less than his fair share of profits.