One of America’s favorite quick-service brands, the Dunkin’ franchise has gone through significant changes in recent years. Starting in 2018, it was renamed from Dunkin’ Donuts to simply Dunkin’, reflecting both how people refer to the company and a change in focus. With coffee already its most profitable product, and coffee shops a huge part of American food and leisure, the company is shifting to a more beverage-led brand.
Then, in October 2020, Dunkin’ Brands, which owned both the Dunkin’ and the Baskins-Robbins chains, was purchased by Inspire Brands. The deal was worth an estimated $11.3 billion in total, taking into account the company’s debts. Inspire also owns Arby’s, Buffalo Wild Wings, Sonic Drive-In, Jimmy John’s, Rusty Taco, and Mister Donut, making it a huge player in the world of franchised restaurants.
How much is a Dunkin’ Donuts franchise?
Dunkin’ includes a variety of restaurant options, covering shopping centers, gas and convenience restaurants, and special distribution opportunities. The costs to set up a restaurant depend on a range of factors, including which type of outlet it is. The most popular are the freestanding restaurants.
The costs to establish a freestanding restaurant range from $526,900 to $1,787,700 (Item 7, FDD 2021). This includes the initial franchise fee, fixtures and equipment, uniforms, initial inventory, insurance, and most of the other costs incurred in setting up a new restaurant. It does not include the cost of real estate.
How much is the Dunkin’ Donuts franchise fee?
The initial fee to franchise a Dunkin’ restaurant ranges from $40,000 to $90,000, depending on the geographical area where the restaurant will be established (Item 5, FDD 2021). The most expensive include areas such as New York City, serving large customer bases with strong disposable income.
Once a restaurant is set up, there are two main ongoing fees: a continuing franchise fee priced at 5.9% of gross sales and a continuing advertising fee of 5% of gross sales (Item 6, FDD 2021). Both of these are payable weekly, based on sales reporting.
How much does a Dunkin’ Donuts franchise make?
Profits for a Dunkin’ franchise depend upon sales, which are influenced by a range of factors. Looking at the most common format, the freestanding single-brand restaurant with drive-thru, average sales in 2020 were $1,336,281 (Item 19, FDD 2021). To work out how much a franchisee earns, you need to deduct all the store’s expenses from this figure, including rent, cost of goods, labor, fees, etc.
Comparing metrics with other restaurants in the same category can give you a rough estimate of what the profits might be, and of whether this is likely to be one of the more profitable franchises in your area. Franchise Chatter subscribers have access to a range of tools for such comparisons, as well as a detailed review to give you more context and information.
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According to one source, the average Dunkin’ franchise owner will make around $124,000 per year. This fits with other reports that put the restaurant’s net profits in the 8-12% range. However, the figure is provided with little evidence, making it doubly important to do your own research and establish how well this estimate fits the possibilities in your area.
How do you franchise a Dunkin’ Donuts?
Getting hold of a Dunkin’ franchise starts with an online application, during which you will need to submit a resume tailored to the Dunkin’ brand.
While your application is being processed, Dunkin’ will send you their franchise disclosure and qualification package, so that you can learn more about the brand and decide if you are a good fit.
While you make your judgment on Dunkin, they will be making a judgment on you. They’ll ask for identity documents and proof of your assets. They’ll also run your credit report and background check, to check that you have the finances needed to set up a restaurant.
After the initial application, you meet with a franchise manager to go through the next stage of the application, which includes writing a business plan. Dunkin’ is looking for people with relevant experience and a positive track record in the food service industry, preferably with multi-unit retail or quick-service restaurant experience. Your negotiation skills, financial capital, and long-term strategy will all be factors. Your business plan is your chance to lay out that vision.
If you pass the initial application process, you sign a store development agreement and a franchise agreement, the legal contracts that set out what you’re expected to do and what support you’ll receive. You’ll then receive your initial Dunkin’ training. Their team will help you arrange financing, a site for the restaurant, and the first stages of construction. With all that in place, you’re ready to set up your Dunkin’ outlet.
Is the Dunkin’ Donuts franchise for you?
Dunkin’ is a popular franchise, one that’s recently gone through a brand revival and acquired new financial backers. Those are promising signs for the brand but bring the risks involved in any significant change. If you’re up for joining in a company’s reinvention, then now could be a good time to sign up. If not, you can check out Franchise Chatter’s comparison tools to find another chain that better suits you.