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updated 9/8/2011 12:42:01 PM ET 2011-09-08T16:42:01

Dunkin' Donuts is going west.

The coffee-and-doughnut chain, an institution in the Northeastern U.S., said Thursday that it's seeking franchisees for largely untapped parts of Colorado, Texas, Nebraska, Oklahoma and New Mexico.

To entice would-be franchisees, the company will offer reduced royalty fees and extra money for local advertising. It aims to open new shops in Denver and Colorado Springs, Colo.; Houston and Waco, Texas; Lincoln and Omaha, Neb.; Oklahoma City and Tulsa, Okla.; and Santa Fe and Albuquerque, N.M., starting in early 2013.

Dunkin's parent company, Dunkin' Brands Group Inc., went public in July, saying it wanted to pay down debt so it could expand outside New England to other parts of the country and abroad. There's roughly one Dunkin' Donuts in the Northeast for every 9,700 residents, compared with one for every 1.2 million people in the West.

The Canton, Mass., company, eager to compete with the ubiquitous Starbucks Corp. and McDonald's Corp., announced plans this summer to expand into San Antonio, Texas; Cedar Rapids, Iowa; and Little Rock, Ark.

It has some inherent advantages. Its specialties of breakfast and snacks are among the few areas of the restaurant industry expected to see notable growth over the next decade. But the company is, like its peers, balancing its need to cover higher costs for coffee beans against the danger that charging more will drive customers away. Coffee is trading around $2.85 per pound, up from about $1.90 a year ago.

On Thursday, Dunkin' Brands shares fell 55 cents, or 2 percent, to $26.28 by midday.

The company has drawn immense investor interest before and since its shares soared 47 percent to $27.85 on their first day of trading, July 27.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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