Keeping it Fresh

New restaurants, according to Smith, will feature softer brown colors, granite tabletops, softer seating, fireplaces and outdoor seating -- all the better for hanging out and using free Wi-Fi.

On the menu side, Dunkin' Donuts is eliminating trans fat and offering flatbread sandwiches, chicken biscuits, yogurt cups and fruit cups.

Also, Smith notes, Dunkin' Donuts is expanding -- with plans to open as many as 40 new stores in Atlanta over the next five years and 9,000 new shops nationally by 2015.

Seems to me there is a lesson in this grand scheme. Dunkin' Donuts had been around for two decades before Starbucks opened its first store in Seattle, and Dunkin' Donuts began franchising three decades ahead of Starbucks.

Despite this, Starbucks sprang onto the national scene like a hot new movie star, and customers couldn't get enough of its mocha lattes. Soon, everybody was doing the Starbucks drive-through.

But the older, less-hip Dunkin' Donuts held on, modernized, added espresso, cappucino and lattes to its menu and today is the world’s largest retailer of coffee by the cup.

Lesson: Don't be intimidated by flashy competition. Make your store shine with new products and innovations, and customers will find you.