Marvin Kaplan is just one man, even if sometimes it seems that he must be in more than one place at a time.
“I like to stay busy,” says the businessman, whose current activities include developing Devonshire Park, a community of million-dollar single-family homes in downtown Sarasota; redeveloping Linger Lodge RV Resort and Restaurant and the former J.P. Igloo site in Manatee County; owning five strip centers in Sarasota County; publishing eight books of prayers written by the late Pope John Paul II; and developing 10 new Dunkin’ Donuts franchise stores along the Gulf Coast.
Hmm, better check the notes. Something seems to be missing from that list.
Oh, of course. Kaplan has applied to Dunkin’ Brands, the parent company of Dunkin’ Donuts, to be among the first franchisees it licenses to bring doughnuts and coffee to China, possibly in time for the 2008 Summer Olympics in Beijing.
The local media jumped on Kaplan’s interest in China somewhat prematurely; several existing U.S. franchisees are competing for Chinese territories, as are potential Chinese franchisees. But make no mistake. Kaplan is considered a strong contender.
“We had a conversation with Marvin and his partners,” says Jon Luther, chairman and chief executive officer of Dunkin’ Brands in Canton, Mass. “They’re serious, very legitimate and very much under consideration to enter China. We’re doing our research now to be sure we enter in the right way with the right partners. We continue to advance his interest. He is a serious contender, has strong partners and is well-financed. And Marvin is making a personal commitment.”
What is it about Marvin Kaplan and doughnuts?
“It’s not me and doughnuts,” he says. “It’s me and coffee. I moved here from New York in 1988. For four years, I couldn’t find a decent cup of coffee anywhere around the area. There were no coffee shops here. I grew up on Dunkin’, so I brought Dunkin’ Donuts here in ‘92. A friend of mine, Martin Lisella, was the operator, and we built four of them.”
But Lisella got divorced and the partners were forced to sell the units off in 1994. He moved away, but Kaplan bought the Dunkin’ franchise rights for Charlotte County and built eight units there. In 2004, he bought back the franchisee rights to Sarasota and most of Manatee County after Dunkin’ Brands closed many units for failed operations. There were at least three different owners in the decade Kaplan was away, none able to get a grip on management challenges.
“It’s a good cash-flow business,” Kaplan says. “When I got into it, it was weaker than it is now. The franchise really came around in 2000 and it accelerated when they brought on Jon Luther.”
Today Kevin Millard is Kaplan’s partner in making the doughnuts; Millard brought in his son-in-law, Shawn Cabral, as operator. Their partnership operates 18 units in Sarasota and Charlotte, and one in Manatee. They have plans for four more in Manatee County and are also expanding into DeSoto and Hardee counties.
Five of the Kaplan/Millard Dunkin’ Donuts have Baskin-Robbins ice cream shops; some are stand-alones, and some are under the same roof with Firehouse Subs. Nine of the 18 units are full stores; the other nine are operated within gas stations. “We’re a good traffic attractor,” says Kaplan. “It’s a win-win.”
Kaplan says the average annual gross for each Dunkin’ Donuts units is $950,000. (Gas stations outlets don’t gross that much, of course.). “Our stand-alone store’s gross average is about $1 mil. Some do a little better, some a little worse,” Kaplan says. “The toughest thing in any business is people. We probably employ 400 to 500 people. The biggest thing is trying to hire and keep the right ones. I’d rather pay a little more to keep the right people than train over and over.”
Kaplan has again attracted local and national media, including an interview with Time magazine in mid-February, for the Dunkin’ Donuts prototype store with the new look and lunch and dinner items he opened on Stickney Point Road in January. “He builds great stores,” Luther says. “He is one of the first franchisees to embrace new ideas, new thoughts. He is a consummate brand builder.”
You have to know the scope of Kaplan’s local doughnut operation to appreciate just how big a leap his desire to open a whole lot more than 18 units in China is.
“Eighteen months ago I started talking to Jon Luther about China,” he says. “They’re already in Taiwan, the Philippines and the Far East. But China is a new frontier for them. I put my hat in the ring to go in there. I said, ‘I want the whole country.’ I have backing by Lazard Ltd. They committed to raise up to $100 million to go in. We have a partner, Teahouse Partners in Shanghai, and they liaison between U.S. companies and strategic partners over there.”
Kaplan assumes that per store sales will be higher in China than here. “The product mix will be different,” he says. “The first few years will be doughnuts, then coffee will be added later.”
And yes, Kaplan has been to China. Once. In 1991, right after Tiananmen Square.
Back then, the Chinese didn’t know what coffee was. “All they drank was green tea,” he says. “But I loved the people and they loved Americans. You could see that they were entrepreneurs. They wanted to get more and have more. I loved that.”
Yum! Brands’ Kentucky Fried Chicken and Pizza Hut were the first American fast-food franchises to make it big in China; McDonald’s, by contrast, has not fared as well. Starbucks has been there for a few years and has been reported to make surprising inroads with coffee culture in the land of green tea.
“It’s a new frontier for me. I love a good challenge,” Kaplan explains. “This is really starting something from the ground up. We’ll have to build our own bakeries, invent supply lines. The first year, I’d probably spend 10 days a month there. After that, we’d have to see. I’m not doing it all myself. Delegation is the thing. I’m not going to be making the doughnuts.”
Not everyone is jumping up and down with glee about the opportunity presented by being the American who brings Dunkin’ Donuts to China, however. “My wife Kathy says I already have enough to do here,” Kaplan admits.
She’s right. It took him three years to amass the land for Devonshire Park, across from Burns Court, the new community in downtown Sarasota where he eventually plans to build 26 single-family homes, beginning with infrastructure and two models that were scheduled to start construction in March.
“We have eight reservations, but the market is such that if you don’t build it, they won’t come,” Kaplan says. “My concept is Old Florida-style houses with porches and tin roofs with all the modern conveniences, including detached one-, two-, and three-car garages with offices or apartments over them. They’re for someone who wants to live downtown and walk to everything, but someone who doesn’t want to live in a condo.”
Kaplan previously developed 54 homes in Bradenton’s Hawks Harbour neighborhood.
He is probably best known for his commercial development—and his commercial development partner of the last 10 years, State Sen. Mike Bennett, R-Bradenton. Together, for example, they bought historic Linger Lodge on the Braden River in 2005. They revitalized the rustic restaurant, added a back deck and expanded the bar. They also operate the surrounding trailer park and want it rezoned to commercial RV. Kaplan and Bennett have amassed 25 acres along the river around the lodge and would like to condo the RV slips there. “We’d like to build a campground across the way and a bridge to it.”
A mutual business partner thought they should meet. “I didn’t need another partner,” Bennett says, “but a few months later we talked and found we were competing on a piece. So we became partners. Rarely do we do anything without the other around here. During the business day, if you see one of us, the other is not far away.”
Kaplan’s word is his bond, according to Bennett, who says it’s almost too good: “If he tells you you’re going to die, you better look for a place to lie down.”
Bennett, who is not involved with Kaplan’s local doughnut business, nonetheless says he will probably participate if the China franchise opportunity comes through. “Why? It sounds like fun,” he says.
The pair also rescued the former J.P. Igloo indoor ice-skating rink from foreclosure in November 2005. “We wanted to get rid of the name. It had a bad stigma,” Kaplan says. Renamed the Ellenton Ice and Sports Complex, Kaplan and Bennett had it up and running again—profitably—by January 2006.
“We have ice hockey teams, tournaments and skating. There is a huge demand for ice. People love it,” Kaplan says.
The new owners intend to make it a family entertainment center, adding a bowling alley, laser tag and a huge game room. They’ve also been in discussions with Manatee County about putting a school on the adjacent property.
In all, Kaplan figures he controls more than $50 million in property. “But it has nothing to do with my net worth,” he says. “If I owned them all free and clear, wouldn’t it be great?”
So Kathy Kaplan was right. Her husband—the father of three grown sons—does have plenty on his plate, even without taking doughnuts to China.
“You haven’t heard the best of it, yet,” Kaplan protests. “Me and a couple friends bought the pope’s private prayers, had them published by Simon & Schuster, and put them to music recorded by Britney Spears, Steven Tyler and Joe Perry of Aerosmith, and James Earl Jones.”
Whoa, whoa. Take a deep breath, Mr. Kaplan. What the hell are you talking about?
“Everywhere that Pope John Paul II went, he wrote a prayer for each different country he visited,” Kaplan says. “These prayers were never before published. It came to me through a lawyer friend in New York. There was a producer who got the deal and we took over when he ran out of money.”
Kaplan and his partners have rights to the pope’s prayers for 20 years. They were scheduled to meet John Paul II in October 2001 to discuss their plans. But when the tragedy of 9/11 shut down international air transportation and reshuffled the world’s priorities, plans were postponed and the moment was lost.
“When you do real estate, or even a Dunkin’ Donuts, you work on certain multiples. It’s stable. This is just a wild card. You either lose all your money or make a thousand times your money. It sounded very interesting,” he says.
It’s unlikely that Kaplan will lose any money on this deal. “We think it’s going to be profitable in the future,” he says. “But I can’t give you a number on that yet.”
To review, the pope wrote enough prayers that it will take seven hardcover books to publish them. Five are already out, most also in multiple languages. A 1,000-page coffee table edition has been designed and will be published when John Paul II is made a saint. In addition to the books and a pop music Spanish CD version of the prayers (the English CD will be released later this year), Kaplan also created a line of greeting cards based on the prayers.
And no, Kaplan isn’t Catholic. He’s Jewish. But he says the pope’s charisma crossed all religions and cultures. “I was in awe of him. Just in awe,” Kaplan says. “His best friends were Jews in Poland who went through the Holocaust. He was just amazing.
“I really got into it because I admired the guy. I believed there was a financial opportunity there. I read a lot about him before this opportunity came up,” he explains. “How many times can you do something you like and make money at it? I didn’t do it for notoriety. I just thought it would be something good.”
All this and Kaplan still maintains business ties—and opportunities—back home in New York, where he first built his empire as a used-car wholesaler in Westchester County. “I still have a lot of ties in New York; I own a lot of real estate there. I go back three or four days a month. People know that I’m a guy who, if he sees a deal he likes, does the deal.”
What lessons did he learn from the used car business that translated into his many successes today?
“Most of it is dealing with people,” Kaplan says. “The only way I can equate it, it’s more like horse trading. You learn to negotiate, how to size up the person you’re with in five minutes. Let’s face it, life is a negotiation. I also learned that the most important thing was that a deal needs to be a win-win for both sides. If you’re hammering someone, it’s only going to happen once. It’s shortsightedness. It has to do with being fair.
“A lot of people don’t see opportunity,” he adds. “I see opportunity. Other people say, ‘It doesn’t make sense.’ I say, ‘It could work if you do it another way.’”