Look for lots more Dunkin' Donuts shops to pop up soon in the Buffalo area.
Kainos Partners LLC, a Long Island-based franchisee of Dunkin' Donuts, has bought the rights to develop 40 of the doughnut and coffee shops in the Buffalo market. To support those stores, which are expected to open over a five- to seven-year period, the company is buying a former Stroehmann Bakeries building in Cheektowaga.
Kainos plans' will increase the competition in a market already served by chains such as Tim Hortons, Krispy Kreme and Dickie's Donuts. Kainos also names Starbucks and McDonald's as business rivals.
Steven Galloway, Kainos' president and chief operating officer, said the presence of so much competition only validates it as a good market to be in.
"We're looking forward to a successful and active participation in the Buffalo market for many years to come," Galloway said.
Kainos has under contract a former Stroehmann facility at 3650 Broadway. The company plans to use the site to make and distribute "made fresh daily" doughnuts and baked goods to Dunkin' Donuts stores in the Buffalo market, including those run by other franchisees. It will also house administrative offices and a store.
The sale price for the Cheektowaga property has not been disclosed. Stroehmann has consolidated its operations into a new site in the Village of Lancaster, and left the Cheektowaga site about two months ago, said Peter Jaremka of J.R. Militello Realty, who marketed the property.
Kainos has applied to the Erie County Industrial Development Agency for incentives to help cover the cost of renovating the Broadway site.
Kainos will open stores in Erie and Chautauqua counties, though not in parts of Erie County where other franchisees have locations, Galloway said. Dunkin' Donuts has 14 stores in the Buffalo area, run by four different franchisees, and existing franchisees also have expansion plans.
"From a company perspective, Buffalo is an untapped market," said Jane Amico, field marketing manager for Dunkin' Donuts in upstate New York and Albany. "We have great franchisees who have done a great job of building the brand there."
Arthur Judelsohn of NAI Pyramid Brokerage Co., a retail specialist, is working with Kainos. One of its first stores will be in CrossPoint Square, in CrossPoint Business Park in Amherst.
Some Dunkin' Donuts stores have Baskin-Robbins stores under the same roof, a concept that Galloway said Kainos will use in some locations.
While Dunkin' Donuts has a relatively small presence in the Buffalo area, the chain is prevalent elsewhere. Its parent company says there are more than 6,500 Dunkin' Donuts shops in 29 countries, with about two-thirds of them in the United States.
The upcoming growth will also create a stronger local connection for a chain whose leader has Buffalo ties. Jon Luther, the chief executive officer of parent company Dunkin' Brands, is a Buffalo native and former Delaware North executive.
"Buffalo really resides in his heart," Amico said.