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    Couche-Tard Acquires Franchise Rights to Dunkin' Donuts

    Canadian-based chain will manage 104 doughnut shops in Quebec.

    LAVAL, Quebec -- All 104 Dunkin' Donuts outlets in Quebec have been rolled into the management of convenience-store operator Alimentation Couche-Tard Inc. through an agreement with British-based conglomerate Allied Domecq PLC, the companies announced yesterday.

    Couche-Tard acquired the master franchise for the chain with promises to double the number of outlets over the next five years.

    Couche-Tard has restaurant experience but faces a big challenge with a growing doughnut war in Quebec and many unhappy Dunkin' Donuts franchise owners who have sued Allied for lack of support. But Couche-Tard chief executive Alain Bouchard said yesterday he intends to win back the number-one position Dunkin' Donuts lost to Tim Hortons in recent years.

    Quebec has 104 Dunkin' Donuts outlets, of which Couche-Tard was the largest operator with 10. They are managed under franchise to Allied Domecq Quick Service Restaurants.

    Bouchard, who built Couche-Tard into a major convenience-store player with 2,427 units across Canada and the Midwestern United States, said his company paid only a small amount for the exclusive arrangement with Allied Domecq.

    He said the main part of the agreement was his commitment to build 100 more Dunkin' Donuts outlets within five years and 225 within 10 years.

    "We intend to invest our creativity and our experience in rebuilding the brand," he said at a news conference. "The Quebec market potential is enormous," even though Tim Hortons has opened 250 outlets in Quebec and Krispy Kreme has arrived in Quebec with big expansion plans.

    "I'm confident we can get back the leadership from Tim Hortons," Bouchard said.

    Couche-Tard already operates 165 restaurants across Canada and in the United States under banners including Dunkin' Donuts, Subway and A&W, some incorporated into the company's convenience stores.

    Under yesterday's agreement, Couche-Tard will be responsible for implementing all aspects of Dunkin' Donuts in Quebec, including the choice of new sites, new-product introductions, training staff and sub-franchisees and all marketing and advertising initiatives.

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