America Runs on Dunkin’, But Dunkin’ Runs on Private Equity

How an iconic company became a lucrative vessel for dealmakers

Illustration: Erik Carter

In the 1980s, Fidelity mutual fund manager Peter Lynch became a personal finance superstar partly by insisting that investing wasn’t all that complicated. He had no taste for even slightly tricky financial instruments like futures and options, preferring “boring companies that do steady business,” as a 1989 interview with the New York Times put it. For example, there was Lynch’s investment in Dunkin’ Donuts stock, which he bought after he “noticed that many people seemed to like its coffee.” That was it; that was the insight.

Back then, Dunkin’ Donuts really did have a clear, linear story: It was a small business founded in the 1950s that grew steadily through franchises, first in the northeast then nationally and internationally. The company went public in 1968; by the late 1980s, it had more than 1,700 locations, and its “Time to Make the Donuts” ad campaign was a fixture. The growth prospects looked good if, well, a little boring.

But since then, the story has been more complicated. This isn’t because the business itself changed in any radical way — it’s still a collection of franchises selling breakfast foods and coffee. What’s changed is that its relationship with investors has become…