Why is Dunkin Brands (DNKN) Crashing?

Over the next 15 months, 100 franchisee-owned Dunkin’ Donuts locations will be closing.

The closures represent just a fraction of the company’s locations, which number about 3,100 in 30 countries and the United States.

Shares of Dunkin’ Brands (DNKN -10.2%) are sharply lower after the company issues guidance at its Investor Day event.

A few of the Dunkin Donut franchisees might have expanded too fast and that became apparent with the news that a few of them plan to close about one hundred of Dunkin’ Donuts stores in the US.

Shares of Dunkin’ Brands fell more than 12 percent Thursday after the company said it expects sales to slow from the previous quarter at its doughnut shops.

Dunkin’ Donuts’ stock plunged Thursday after the company reported lower-than-expected sales growth along with a traffic decline in the third quarter ended September 30. Analysts, on average, were anticipating 2015 revenue growth at the high end of that range, with earnings of $1.92 per share. It also reiterated plans to open new stores in California.

Despite all the technology and experiments that get investors buying other brands and the rosy view of the future, the numbers reflect a distinct slowdown for the chain of more than 19,095 stores worldwide.

The analyst forecasts that long-term franchise growth for the restaurant company will stand at around 5-6%; this is believed to be a key driver for free cash flow and valuation.

Wall Street Analysts have given a mean estimate of $ 0.59 earnings per share to Dunkin Brands Group Incorporated. However, it’s good to note that in the recent quarter, the company revealed a sales increase of up to 1.1 percent. The company said it expects to expand mobile ordering nationwide in 2016.

He stressed that Dunkin’ was taking steps to improve its menu offerings in order to boost sales.

Taco Bell announced in July that it would partner with DoorDash to test delivery at 200 outlets in their Dallas, Los Angeles, Orange County, Calif., and San Francisco Bay area markets.