Acquiring Your Competitor
Lincoln Watase, the CEO and President of Yum Yum Donut Shops, shares his story with Yum Yum donuts and reveals how his business managed to enjoy success by acquiring the Winchell's Donuts chain.
The acquisition of the Winchell's Donuts chain by Yum Yum Donuts was a major step for the company. It more than doubled the number of stores and put us in new areas like the Midwest and the South East. Fortunately, the founder of Yum Yum Donuts, Phil Holland, and his partner, Frank Watase, modeled Yum Yum after the Winchell's chain. We had the huge advantage of being somewhat familiar with the Winchell's operation prior to our acquisition. The majority of Winchell's stores are located here in Southern California, which is also where Yum Yum is located. We knew our distribution company and our manufacturing company would be able to enjoy additional profits from day one. The final consideration after doing our business plan and projections was that we believed we were in a strong position to service the debt that we were taking on to finance the acquisition.