How Dunkin' Donuts and Baskin-Robbins Hit the Sweet Spot

(MoneyWatch)  While other big chains have sputtered in the downturn, privately held Dunkin' Brands has quietly added more than 500 Dunkin' Donuts and Baskin-Robbins stores in the past year.

Here's why these chains are still in the sweet spot:

• Simple, classic concepts. These are beloved brands that have managed to just keep doing what made them great. Fresh doughnuts. Thirty-one flavors of ice cream. Who can resist? The concepts haven't been "updated" until they're unrecognizable, a la KFC and its attempts at selling grilled chicken.
• Geographic opportunity. These brands are expanding because they're simply not mature yet. Dunkin' is still primarily in the eastern half of the U.S. Unlike many chains that are at the point of self-cannibalizing sales when they open new units, for Dunkin' there's still 65 percent of the country to conquer.
• Affordable treats. When times are hard, dropping a dollar or three on dessert can really cheer you up. People might talk about needing to cut out pricey daily lattes from Starbucks (SBUX) if they're watching the budget, but cutting out the occasional ice cream cone? Ain't gonna happen.
• Blue-collar positioning. There's nothing upscale or snobby about either of these brands. They're for everybody, and that's a good demographic when the economy tanks.
• Lack of major competitors. Tim Horton's (THI) is trying, as is Krispy Kreme (KKD), but they're not in Dunkin's ballpark in the U.S. Many have tried to be the ice cream store chain B-R is -- Ben & Jerry's, Carvel, Cold Stone Creamery -- but nobody has B-R's 6,000-store reach.
• Flexible programs for franchise owners. QSR Magazine reports Dunkin's policy is to encourage franchise development even if owners can only afford one small store. They'll let them open a kiosk, a store in a gas station -- whatever works.
• Sane expansion program. Where many franchised companies get in trouble by putting up stores wherever a franchise owner is willing to open one, Dunkin' is opening new stores where it makes sense, slowly expanding westward one state at a time.
• Savvy co-branding. A lot of brands that team up to run dual-brand stores just don't work. But a combined Dunkin' and B-R store is a great combo -- both brands are about treats, and one's big in the morning, the other at night. So a dual store can stay hopping all day long.

Photo via Flickr psd
Related:

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• The Big Winner in Burger King's Coffee Deal: Starbucks
• Tim Horton's Aggressive U.S. Expansion: Fueled by Cheap Real Estate