DEVENS -- When the family business is making doughnuts, a career in food service is a logical step.

Steve Catalano went from being, "the butcher, the baker and the candlestick maker" at his dad's Mister Donut shop in Woburn to owning 39 stores, with more than 500 employees, in the Dunkin' Donuts franchise.

Catalano and Chris Sargent, the chief operating officer and a principal partner in the Catalano Companies, talked about owning a franchise business at the Nashoba Valley Chamber of Commerce breakfast on March 8.

The company has been with Dunkin' as it grew from a regional franchise to one with stores around the world.

The Catalano Companies, headquartered in Harvard, own 39 of those stores; 20 in Massachusetts and 19 in the Nashville, Tennessee, area.

Catalano has grown with the brand. The Woburn store became a Dunkin' in the 1990s, after Dunkin' bought the Mister Donut chain.

"Sales doubled," Catalano said. "It was a great relationship."

A short time later, he bought two locations in Groton and one in Townsend after seeing a classified ad. Just last week, Catalano opened their most recent store in Tennessee.

The newest owner of the brand has poured money into Dunkin' Donuts, Catalano said. "The power of the brand is the advertising."

With that increased support, "it's changed dramatically," he said. The company is trying to find the balance between the top and bottom line.

"If we sell a banana, they get a cut," Catalano said.


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In turn, local franchisees get a cut of the profits on retail sales at other stores of the Dunkin' branded products like coffee and bottled beverages.

Dunkin' franchisees have lots of say in their business, he said. They can choose their location, size and own the real estate.

That can become important later in life, Catalano said. If the business is sold, the land owner can still collect rent.

With a franchise, "there's a lot of hidden cost," he told the business group during the question period.

If a business is looking to join a franchise they should understand what they are getting into. Talk to other franchisees. Read the agreements and learn who is responsible for the different areas of the business.

Dunkin' franchisees can source their own products and take advantage of corporate buying. They lock in on coffee prices a year in advance, something that a smaller business might not be able to do, Catalano said.

When a new product is released, it runs in test markets. If it is a success, the company will come up with a package for the equipment individual stores will need, he said.

His company is part of a co-op kitchen in Devens that makes doughnuts for 109 stores. Moving the baking business out of the individual stores has increased profits and made the product more consistent, Catalano said.

They are in the process of building their own bakery in the Nashville area.

The Catalano Company also owns Dolce Catering, which provides food for the sets of movies and commercials.

Dolce Catering was started after Catalano met the owner of New England Studios at a chamber event. The four-sound stage film studio in Devens opened in late 2013.

"Pretty soon we found ourselves in California spec'ing catering trucks," Sargent said. Overseeing the catering company is part of what he does for Catalano Companies.

An employee's name was included in the credits for "Manchester by the Sea," which won Oscars for best actor and best original screenplay.

Catalano Companies relies on very, very dedicated team members to get the job done, Sargent said. "You can't be everything."