Inspire Brands CFO Recounts How Dunkin’ Survived Covid

Kate Jaspon Jack McCullough CFLC spring 2024
Alex Gagne Photography
“I honestly remember not sleeping and thinking I was going to be the CFO of a 75-year-old company that went bankrupt," said Kate Jaspon at the CFO Leadership Conference.

Raised in Boston, Kate Jaspon was proud to join the Dunkin’ finance team after leaving KPMG. “It was a privilege to work for a brand I grew up with,” she says. “Combining something people love [Dunkin’ Donuts] with a way for people to get ahead and live the American Dream—many of our franchisees are immigrants from other countries—was an honor.” 

Jaspon, now CFO of Inspire Brands, which bought Dunkin’ Brands in December 2020, was at the helm of finance when Dunkin’ went through a tumultuous period: the Covid-19 pandemic. At the time, Dunkin’ was a publicly held company, having listed in 2011 after being owned by a consortium of private equity firms for the previous six years. 

Dunkin’ had cruised through the financial crisis when Jaspon was assistant controller. “A lot of times when the economy is tough, Dunkin’ accelerates,” she told Jack McCullough, president and founder of the CFO Leadership Council, in a keynote session on Wednesday at the CFO Leadership Conference. “Breakfast is the last occasion people give up when trying to conserve money—coffee and breakfast are ritualistic.” 

The Covid pandemic was different, almost upending the restaurant franchise. But Dunkin’s response to the crisis was practically “a template for how a company should behave during an unprecedented threat,” said McCullough. 

With the pandemic brewing in Asia in early 2020, Jaspon, named CFO three years earlier, returned from a franchisee conference in Peru. Jaspon went on a family scuba-diving trip and, after stepping off a boat, got the text that the United States was shutting down the restaurant industry, and she needed to return home immediately. When she landed in Boston on the last flight back from the Caribbean, she was greeted by airport workers in hazmat suits. Jaspon picks up the thread: 

The Right Pitch

“[Dunkin’] was heavily focused in the Northeast and New York and Boston, the two most impacted cities in the United States. But we were also 100 percent franchised. So we had all these panicked small business owners who had levered themselves heavily to run their businesses and employed many people who live daily on their salary. What were we going to do?

“We were also a publicly traded company expected to pay dividends, and our share price plummeted quickly. We decided, I don’t know if you want me to take credit for this or not, that we were going to secure Plexiglas and we were going [to put up dividers]. And we flew to D.C because they hadn’t yet shut everything down, to lobby the government that America Runs on Dunkin’ [a marketing message Dunkin’ developed in 2006]. If you want to have hospitals and everybody working, we need to get them coffee and everything.

“In the meantime, we convinced several franchisees to open their manufacturing locations, not those exposed to the consumer, to go to the hospitals with trucks. We were just dropping boxes of donuts, coffee and everything out there. We delivered to law enforcement, elected officials and anywhere we could. And we sent letters: ‘We can do this. We can do this safely. We can open our restaurants…. People need to eat; you’re letting grocery stores stay open.’ We partnered with many peers in the restaurant industry that had drive-throughs…. The government said we could open our drive-throughs and make our lobbies walk up. Eventually, we got them to let us have Plexiglas. All that was a pivoting point for Dunkin because Starbucks, Pete’s Coffee and all those companies on the West Coast shut down. And they pitched it as they would not let their employees be put at risk. We pitched it as ‘America runs on Dunkin.’” 

‘Bleeding Cash’ 

The finance department was on edge, of course. Jaspon spent a lot of time calling every lender that franchisees used, every landlord and all of their suppliers. “We took a very different position than many of our peers and said, ‘We’re in this with you’ to franchisees. Jaspon and her team asked lenders to push off principal and interest payments for franchisees, pledging to stay loyal to those banks. On phone calls with franchisees every morning and afternoon, Jaspon advised owners on how to navigate state pandemic shutdown rules, like the prohibition that employees couldn’t come in contact with truck drivers bringing in deliveries.

Dunkin’ also told franchisees that they didn’t have to pay the company and could do so when the business recovered. At corporate, Dunkin’ also didn’t let go of any of its employees and was still paying its rent. The only thing it did was stop paying its dividend, which no other restaurant company did, said Jaspon. 

“We were bleeding cash,” she said. “It was crazy, and I honestly remember not sleeping and thinking I was going to be the CFO of a 75-year-old company that went bankrupt.” 

The share price of Dunkin’ Brands dropped to just below $40 a share on March 20 but fully recovered by September. Although Inspire Brands was initially rebuffed by Dunkin’, it secured an agreement to acquire Dunkin’ on October 30, 2020, for $106.50 per share in cash, or about $11.3 billion when you include the assumption of Dunkin’s’ debt.  The Inspire Brands portfolio includes restaurant chains Arby’s, Buffalo Wild Wings, SONIC Drive-In and Jimmy John’s.

Jaspon became finance chief of the Dunkin’ and Baskin Robbins businesses in December 2020 and then CFO of all of Inspire Brands in July 2021. 

The Covid experience brought Dunkin’s’ leadership team together in a way Jaspon could never have imagined. What kept the team together when the Inspire acquisition came along was “that we could survive anything,” she said. 

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