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Cramer: Could technology transform Dunkin' Brands?

(Click for video linked to a searchable transcript of this Mad Money segment)

This company's treats are delicious but the stock has been a little hard to swallow, lately.

"I've liked Dunkin' for a long time," said Jim Cramer. But over the past three months, owning the company's stock has been anything but enjoyable.

But after talking with Nigel Travis, the chairman and CEO of Dunkin' Brands, Cramer thinks there's still a lot to chew on.

Jim Cramer on Mad Money.
Adam Jeffery | CNBC
Jim Cramer on Mad Money.

Comments from the CEO suggest the company's technology may be about to set Dunkin' apart from its rivals. "I'm big on new technology, and I really think there's a big opportunity there," he said. "The big buzz phrase is 'beacons,' and we're investigating it."

Beacons are low-cost transmitters that communicate with mobile devices using Bluetooth signals; they enable retailers and others to send highly targeted mobile messages.

Travis went on to say he's looking at all kinds of new ways to either eliminate lines or keep them as short as possible. Beacons may help do that.

But technology isn't the only thing that intrigued Cramer. The "Mad Money" host also cited the company's business model as a point of strength. "They have a 100 percent franchised model, which makes it much cheaper for the company to grow while also insulating them from raw cost inflation."

And growth for this company has been very steady.

"Last year they grew their store count by 5 percent, and this year they're looking at another 5 percent-plus increase," Cramer said.

In addition, Cramer likes the yield. "Dunkin' pays you a solid dividend that yields 2.1 percent."

Also, Cramer says Dunkin' is a classic regional to national to international growth story.

"Although the company has 18,250 points of distribution across 55 countries, in the United States they're mostly concentrated in the eastern half of the country, and the international expansion is still in its early innings," Cramer said.

All told, with the stock down 10 percent over a three-month period, if you have a long-term time horizon, Cramer thinks the Dunkin' story is a good story. Therefore, the pullback may be an opportunity.

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"I think much of the weakness was due to weather; more than half of Dunkin's U.S. business is located in the colder Northeast corridor that struggled with a wicked winter. Now, though, it's warm and I think Dunkin's numbers could warm up, too. I've been behind Dunkin' since it first came public. And I'm sticking with it."

On a related note, Friday June 6 is Global Donut Day and in celebration Dunkin' will be offering visitors a free donut with the purchase of a beverage.

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