William Rosenberg, 86; Dunkin' Donuts Founder Pioneered Franchising Businesses

TIMES STAFF WRITER

William Rosenberg, the tireless entrepreneur who founded Dunkin' Donuts and set it on its path to become what is now the world's largest coffee and baked goods chain, founded the International Franchise Assn. when "franchise" was a derogatory word and also became New England's largest breeder of standardbred horses, has died. He was 86.

Rosenberg, who had survived cancer of the lung, blood and skin and many years of diabetes, died Friday of bladder cancer at his home in Mashpee, Mass., on Cape Cod.

He turned day-to-day operations of Dunkin' Donuts over to his son Robert in 1963, and the company was sold to British food conglomerate Allied Domecq in 1990. But Rosenberg, "consultant for life," remained active in management and on the board until the sale and passionately supported his brainchild until his death.

By 2000, when Dunkin' Donuts celebrated its 50th anniversary and opened its 5,000th outlet in a chain spanning the U.S. and 37 other countries, Rosenberg was curtailing his own intake of its baked products because of weight problems and diabetes. But he continued to have a cup of the chain's fresh coffee every morning, and he served the doughnuts in his home, joking that, when nobody was looking, he could inhale two dozen.

A self-effacing eighth-grade dropout who always said he was "too dumb to make things complicated," Rosenberg had an innate knack for making money. Whatever made the customer buy was acceptable, and he never insisted on personal credit for the ideas that worked.

When he wrote his autobiography (with the help of Jessica Brilliant Keener) in 2001, he wanted to title it "Worth the Trip." But when his publisher decided "Time to Make the Donuts" would attract more attention, Rosenberg agreed, saying, typically, "Call it whatever you want if it will sell more copies."

Rosenberg didn't even coin "Dunkin' Donuts," which became a household name, wreaked havoc with elementary school spelling tests and now serves more than 1.6 billion doughnuts a year. When he started the business in a single shop in Quincy, Mass., in 1948, he called it the Open Kettle. Two years later, sure a better name could sell more doughnuts and coffee, he put his executives in a room with a tape recorder and told them to brainstorm. He later credited his architect with the trademark "Dunkin' Donuts."

Even when Rosenberg decided to raise standardbred horses on his Wilrose Farm in New Hampshire, he candidly admitted he knew nothing about horses. But he did know enough to hire horse-breeding experts and to learn from them.

"I once coined a phrase: 'A person does not build a business; a person builds an organization. An organization builds a business,' " Rosenberg said last year when he received the Nation's Restaurant News Innovator Award. In 2000, he was named by Nation's Restaurant News as one of 100 people who "changed retailing and food service in the 20th century."

Another homily Rosenberg espoused was, "The boss is the customer." It was a lesson he said he learned early, delivering groceries from his father's store and then, after the store was lost in the Depression, dropping out of school to work.

Young Rosenberg shined shoes, shoveled snow and, at 14, became a full-time telegram delivery boy for Western Union. He earned $22 a week plus tips and learned quickly that the better he served the customer, the bigger tip he got.

Rosenberg would invent ways to please customers to make more money--holding onto the back of a truck to make his delivery bike go faster or carting a block of ice to a racetrack on a hot summer day and selling ice chips at 10 cents each.

At 17, he went to work for Simco, an ice cream vending company, where he remained more than a decade, rising from delivery boy to supervisor of production, shipping, cold storage and manufacturing and managing 40 to 100 trucks.

With a wife and children to support, he aided the World War II effort by working as an electrician at Bethlehem Steel, where he became the first Jewish union representative, and by buying war bonds. He used the $1,500 bond proceeds and $3,500 borrowed from relatives to start a catering company, Industrial Luncheon Services, with a single truck. Unable to buy more trucks after the war, he bought 10 taxicabs and created his own catering vehicles, with sides that rose to reveal stainless steel shelves stocked with sandwiches and snacks--a prototype for today's mobile catering vans. Rosenberg built a multi-state fleet of 200 trucks that served major industrial companies. Soon, he added in-plant cafeterias and a vending operation.

But the ever-watchful Rosenberg noticed that 40% of his revenue came from just two products--coffee and pastries. So on Memorial Day of 1948, he began the Open Kettle, selling doughnuts for a nickel and a cup of coffee for a dime.

As the company grew under its improved name in the early 1950s, the innovative Rosenberg followed the example of Howard Johnson and decided to franchise. Now ubiquitous, franchising was so disreputable in those years that it was borderline illegal in some states, and no company mentioning "franchise" could be advertised in the Wall Street Journal or the New York Times.

Rosenberg, who launched his empire a couple of years ahead of Colonel Sanders and McDonald's, believed in franchising and decided to make the practice respectable. In 1959, at a Start Your Own Business convention, he invited 16 friends to lunch and founded the International Franchise Assn. to uphold standards.

"I can't think of anything that fosters and nurtures innovation better than the overwhelmingly successful concept of franchising," Rosenberg said when he accepted the Innovator Award last year. "Franchising supports the great American dream of allowing multitudes to own and succeed in their own businesses."

In 1971, after he was diagnosed with lung cancer, Rosenberg decided to step back somewhat from Dunkin' Donuts and devote time to his Wilrose Farm. By decade's end, he had become the largest standardbred breeder in New England and was inducted into the New England Hall of Fame of the Standardbred Industry.

He had also contracted a cancer of the blood, so in 1980, he donated the farm to the University of New Hampshire for use in teaching franchising and entrepreneurship.

Rosenberg next threw himself into philanthropy, supporting hospitals in Boston and elsewhere, seeking cures for cancer and diabetes.

Two years ago, despite two hip replacements, the dapper, bow-tied octogenarian continued to walk three or four miles a day and advise businessmen on the value of determination, persistence, a positive attitude and passion for the customer as the formula for success.

He is survived by his wife, two sons, one daughter and one stepdaughter.

As for those Dunkin' Donuts that, by his edict, must be replaced with fresh ones if not sold within five hours? Asked a few months ago whether he still liked them, Rosenberg said with a twinkle, "Is the Pope Polish?"

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