This Day in Jewish History

1916: Dunkin' Donuts' Founder Is Born

William Rosenberg established the Open Kettle doughnut shop in Quincy, Massachusetts, which later became the famous franchise.

Bloomberg

June 10, 1916, was the birthday of William Rosenberg, the Boston-born entrepreneur who established the Open Kettle doughnut shop in Quincy, Massachusetts, in 1948, which two years later changed its name to Dunkin’ Donuts. Nearly 100 years after his birth, at the end of 2011, there were more than 10,000 outlets of the chain, one of the pioneers in name-brand franchising, in 32 countries.

Bill Rosenberg was one of four children born to Nathan Rosenberg, a grocery owner, and the former Phoebe Swart, both Jewish immigrants from Eastern Europe, and was raised in Boston’s working-class Dorchester section. Growing up during the Great Depression, he found himself leaving school after 8th grade to work. A variety of different jobs led to his driving a route for the Jack and Jill Ice Cream Company, where he steadily advanced, until he became national sales manager at age 21.

During World War II, Rosenberg worked at a Boston shipyard, where he both learned the skills of an electrician and became a union leader. There he observed how the men who operated lunch-carts did brisk business selling food and beverages during coffee and lunch breaks, and he began thinking of how to upgrade and make more profitable the business by introducing modern accounting methods and equipment. Rosenberg bought a number of used service trucks from the local phone company and converted them into motorized food stands, with stainless steel facades and a window on one side that flipped up to form an awning, from under which food could be dispensed.    

Rosenberg’s company, the Industrial Luncheon Services Company, flourished, and his model for a mobile canteen is still the standard today in the United States. As he expanded, he began to buy the companies that supplied him with food, so that he controlled every stage of the process of production and sales.

After observing that his most profitable items were doughnuts and coffee, Rosenberg, who by 1948 had 200 drivers working for him, decided to open his first shop, which he initially called the Open Kettle.

Doughnuts had been brought to the New World by both the Dutch and the Pilgrims, according to food writer Gil Marks, but it was a Jewish immigrant, Adolph Levitt, who introduced the first automated doughnut-making machine, a development that helped turn the round, fried cake with the hole in the middle into America’s most popular pastry.

Although doughnut shops traditionally offered five different types of doughnuts – plain, powdered, glazed, chocolate-frosted and jelly-filled – Rosenberg decided to go with 52 different varieties. (Munchkins, the ball-shaped cakes supposedly made from doughnut holes, were introduced only in 1970, after being cooked up for the company by a Boston advertising firm.)

By the time he had opened his sixth Dunkin’ Donuts, as the shops were now called, in 1955, Rosenberg decided that future expansion should be according to the franchise model, whereby the parent company sells a license to operate the business in a particular location to an individual owner. Five years later, he founded the International Franchise Association, a trade organization that helped to modernize and make more honest the existing business model.

Rosenberg’s early mentor at Jack and Jill had been an accountant named Harry Winokur. Winokur not only became Rosenberg’s investor at Dunkin’, but also his brother-in-law. But Winokur disagreed with Rosenberg’s plan to sell franchises, and decided he wanted out, selling his shares to his brother-in-law. He also started his own doughnut firm, Mister Donut, which became America’s second-largest doughnut chain. Later, both companies were purchased by larger conglomerates, and Mister Donut’s franchisees in the U.S. (Winokur changed his mind about the business model) were given the option of becoming Dunkin’ outlets. Nearly all of them did, so that today, the name Mister Donuts exists only in Japan. Bill Rosenberg and Harry Winokur’s sister divorced in 1978.

A Dunkin’ franchise opened in Israel in 1996, with its flagship chain at Rabin Square, in Tel Aviv. After initially promising indicators, however, the local branches all shut down, and by 2001, the brand had locally disappeared.

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Today, Dunkin’ Brands, the parent company of the chain, is owned by a consortium of private-equity firms – Bain Capital, the Carlyle Group and Thomas H. Lee. International sales were $6 billion in 2010. The company also includes ownership of the Baskin-Robbins ice cream chain.

Rosenberg retired from the doughnut business in 1988, and devoted himself fulltime to his avocation, breeding horses for harness racing. He also was involved in philanthropy, setting up a program in business franchising at the University of New Hampshire (where his horse-breeding farm was situated) and in medicine at the Dana Farber Cancer Center, in Boston.

He died on September 22, 2002, at age 86, at his home, in Mashpee, Massachusetts.