Dunkin’ Franchise: Average Sales ($1.46M) vs. Cost ($526K-$1.80M)

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Dunkin’ franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Dunkin’ franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Dunkin’ outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Dunkin’ franchise opportunity

Section V – Presentation and analysis of Dunkin’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average gross sales by geographic region for continental U.S. freestanding franchise Dunkin’ Restaurants (and separately, for Dunkin’/Baskin-Robbins Combo Restaurants) that have been open for business to the public for at least one year during a one-year measuring period from January 1, 2022 to December 31, 2022

• 2022 average gross sales by geographic region for continental U.S. shopping center/storefront franchise Dunkin’ Restaurants (and separately, for Dunkin’/Baskin-Robbins Combo Restaurants) that have been open for business to the public for at least one year during a one-year measuring period from January 1, 2022 to December 31, 2022

• 2022 average gross sales by geographic region for continental U.S. gas & convenience franchise Dunkin’ Restaurants that have been open for business to the public for at least one year during a one-year measuring period from January 1, 2022 to December 31, 2022

• 2022 average gross sales by geographic region for continental U.S. drive-thru only franchise Dunkin’ Restaurants that have been open for business to the public for at least one year during a one-year measuring period from January 1, 2022 to December 31, 2022

• 2022 average cost of goods sold and labor costs by geographic region for continental U.S. franchise Dunkin’ Restaurants (and separately, for Dunkin’/Baskin-Robbins Combo Restaurants) for the period from January 1, 2022 to December 31, 2022

Section VI – Key ratios, comparables, computations, and analyses for the Dunkin’ franchise opportunity (exclusive content for Platinum subscribers)

Section I – Dunkin’ Franchise Costs

• Dunkin’ (freestanding restaurant) franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee (20-year term):  $40,000 to $90,000
• Building Costs:  $180,000 to $600,000
• Site Development Costs:  $13,000 to $350,000
• Additional Development Costs:  $12,000 to $90,000
• Equipment, Fixtures, and Signs:  $189,000 to $300,000
• Restaurant Technology System:  $65,000 to $95,000
• Licenses, Permits, Fees, and Deposits:  $3,500 to $7,500
• Real Estate Costs:  amount not specified
• Opening Inventory:  $8,000 to $20,000
• Miscellaneous Opening Costs:  $9,500 to $70,000
• Uniforms:  $400 to $3,000
• Insurance:  $4,500 to $16,000
• Travel and Living Expenses While Training:  $2,000 to $50,000
• Marketing Start-Up Fee:  $0 to $10,000
• Additional Funds for First 3 Months of Operation:  $0 to $108,000
• Total Estimated Dunkin’ Franchise Costs (Freestanding):  $526,900 to $1,809,500

• Total Estimated Dunkin’ Franchise Costs (Shopping Center/Storefront):  $437,500 to $1,310,500

• Total Estimated Dunkin’ Franchise Costs (Gas/Convenience Store Outlet):  $210,900 to $1,038,100

Section II – Dunkin’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Dunkin’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee (20-year term):  $40,000 to $90,000
• Continuing Franchise Fee:  5.9% of Gross Sales
• Continuing Advertising Fee:  5.0% of total Gross Sales

Section III – Number of Franchised and Company-Owned Dunkin’ Outlets

Franchised

2020

• Outlets at the Start of the Year:  8,282
• Outlets at the End of the Year:  7.790
• Net Change:  -492

2021

• Outlets at the Start of the Year:  7,790
• Outlets at the End of the Year:  8,010
• Net Change:  +220

2022

• Outlets at the Start of the Year:  8,010
• Outlets at the End of the Year:  8,087
• Net Change:  +77

Company-Owned

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  31
• Net Change:  +31

Section IV – News Updates on the Dunkin’ Franchise

• Dunkin’ Completes Acquisition of 31 Franchised Locations in Ohio

• Two Area Dunkin’ Stores Violate Child-Labor Laws; Owner Pays $41,000 Federal Fine

• Dunkin’ Adds Corporate-Owned Stores to Its Portfolio

• Dunkin’ Targets Growth in Mexico with New Franchise Partnership

• Dunkin’ Ranked No. 5 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Dunkin’ Franchise (Item 19, 2023 FDD)

Part 1 – Single-Branded Restaurants

• There were 7,261 single-branded franchised Dunkin’ Restaurants (excluding Combo and Special Development Opportunity (SDO) Restaurants) operating in the Continental U.S. as of December 31, 2022.

• Dunkin’ excluded 223 single-branded franchised Dunkin’ Restaurants from the financial performance representations because they first opened for business after January 1, 2022 and did not operate for the full 12 months from January 1, 2022 through December 31, 2022.

• Dunkin’ also excluded 85 single-branded franchised Dunkin’ Restaurants that closed between January 1, 2022 and December 31, 2022, all of which had operated for more than 12 months before they closed.

• These financial performance representations also exclude the 31 company-owned Dunkin’ Restaurants.

• Dunkin’ also excludes from the first 5 tables of this financial performance representation any single-branded franchised Dunkin’ Restaurants located in Alaska or Hawaii and Restaurants that qualify as SDOs (other than those that are Gas & Convenience Restaurants). Dunkin’ does not believe that the results of Restaurants in Alaska or Hawaii have a reasonable basis for prospective franchisees developing Restaurants in the Continental U.S., and Restaurants that qualify as SDOs have sales and cost structures that vary widely from one location to another. Similarly, Dunkin’ does not make any financial performance representation for a prospective franchisee developing a Restaurant in Alaska or Hawaii or a Restaurant that qualifies as an SDO.

• The site types listed in the following tables are defined as follows:

• Freestanding: A Restaurant, either newly constructed or an existing structure (to be retrofit), that does not share any common walls with any third party.

• Shopping Center/Storefront: A Restaurant that shares a common wall (or walls) with third parties. The Restaurant could be an anchor (endcap) or inline tenant space in a strip center, or it could be a location in a high density, multiple level construction (typically urban/downtown office building setting), sharing common wall and ceiling/floor construction with any third party.

• Gas & Convenience Restaurants: A Restaurant that is a sub- or shared tenancy within a Gas & Convenience host environment.

• Drive-Thru Only: A Restaurant that does not have any indoor seating, but allows customers to drive up to the structure to place orders. In some cases, there may be a walk-up window or front counter. Drive-Thru Only Restaurants may be Freestanding, Shopping Center/Storefront, or Gas & Convenience but are typically smaller than their counterparts with indoor seating.

• The term “Sales” in this Item 19 means Gross Sales, which means all revenue related to the sale of approved products and provision of services (including direct delivery, catering, and/or delivery services through third parties) through the operation of the franchised Restaurant, but does not include money received for the sale of stored value cards and deposited into a central account maintained for the benefit of the System; taxes collected from guests on behalf of a governmental body; or the sale of approved products to another entity franchised or licensed by Dunkin’ for subsequent resale.

• The average length of time that the standalone franchised Dunkin’ Restaurants in the first set of tables have been in operation is 16.1 years.

Table 1 – Continental U.S. Dunkin’ Single-Branded Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Freestanding Type

Northeast – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  1,698
• Average Sales:  $1,591,911

Northeast – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  392
• Average Sales:  $1,169,112

Midwest – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  340
• Average Sales:  $1,449,326

Midwest – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  13
• Average Sales:  $1,096,510

South – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  727
• Average Sales:  $1,350,038

South – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  41
• Average Sales:  $1,115,093

West – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  76
• Average Sales:  $1,448,949

West – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  4
• Average Sales:  N/A

Total Continental U.S. – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  2,841
• Average Sales:  $1,509,128

Total Continental U.S. – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  450
• Average Sales:  $1,161,694

*Where “N/A” appears in the tables in this Item 19, there are fewer than 10 restaurants in the applicable group. While Dunkin’ does not report the results of those few Restaurants separately due to concerns of identifying specific Restaurant results, it does include them in Total Restaurants in the Continental U.S.

Table 2 – Continental U.S. Dunkin’ Single-Branded Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Shopping Center/Storefront Type

Northeast – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  478
• Average Sales:  $1,435,119

Northeast – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  987
• Average Sales:  $973,224

Midwest – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  239
• Average Sales:  $1,208,809

Midwest – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  103
• Average Sales:  $709,571

South – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  521
• Average Sales:  $1,319,104

South – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  224
• Average Sales:  $899,759

West – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  98
• Average Sales:  $1,319,258

West – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  37
• Average Sales:  $1,099,041

Total Continental U.S. – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  1,336
• Average Sales:  $1,340,893

Total Continental U.S. – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  1,351
• Average Sales:  $944,400

Table 3 – Continental U.S. Dunkin’ Single-Branded Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Gas & Convenience Site Type

Northeast – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  419
• Average Sales:  $1,206,251

Northeast – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  292
• Average Sales:  $752,402

Midwest – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  119
• Average Sales:  $1,084,483

Midwest – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  34
• Average Sales:  $575,555

South – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  153
• Average Sales:  $1,138,150

South – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  40
• Average Sales:  $628,651

West – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  1
• Average Sales:  N/A

West – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  2
• Average Sales:  N/A

Total Continental U.S. – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  692
• Average Sales:  $1,169,995

Total Continental U.S. – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  368
• Average Sales:  $720,672

Table 4 – Continental U.S. Dunkin’ Single-Branded Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Drive-Thru Only

Northeast

• Total Number of Restaurants in Sample:  30
• Average Sales:  $1,090,489

Midwest

• Total Number of Restaurants in Sample:  8
• Average Sales:  N/A

South

• Total Number of Restaurants in Sample:  14
• Average Sales:  $1,036,173

West

• Total Number of Restaurants in Sample:  1
• Average Sales:  N/A

Total Continental U.S.

• Total Number of Restaurants in Sample:  53
• Average Sales:  $1,088,606

Table 5 – Continental U.S. Dunkin’ Single-Branded Franchise Restaurants, Average Cost of Goods Sold and Average Labor Cost Stated as a Percentage of Total Sales (for the Period January 1, 2022 to December 31, 2022)

Northeast

• Total Number of Restaurants in Sample:  4,240
• Average Cost of Goods Sold:  26.5%
• Average Labor Cost:  26.3%

Midwest

• Total Number of Restaurants in Sample:  831
• Average Cost of Goods Sold:  27.8%
• Average Labor Cost:  26.8%

South

• Total Number of Restaurants in Sample:  1,701
• Average Cost of Goods Sold:  29.4%
• Average Labor Cost:  24.1%

West

• Total Number of Restaurants in Sample:  219
• Average Cost of Goods Sold:  28.4%
• Average Labor Cost:  28.4%

Total Continental U.S.

• Total Number of Restaurants in Sample:  6,991
• Average Cost of Goods Sold:  27.4%
• Average Labor Cost:  25.9%

Part 2 – Combo Restaurants

• There were 1,194 franchised Combo Restaurants (excluding SDO Restaurants) operating in the Continental U.S. as of December 31, 2022, all operated by franchisees.

• Dunkin’ excluded 30 of them from these financial performance representations because they first opened for business after January 1, 2022 and did not operate for the full 12 months from January 1, 2022 through December 31, 2022.

• Dunkin’ also excluded the 16 Combo Restaurants that closed between January 1, 2022 and December 31, 2022, all of which had operated for more than 12 months before they closed.

• There were no Combo Restaurants that Dunkin’ or its affiliates operated as of December 31, 2022.

• Dunkin’ also excluded from these financial performance representations the Combo Restaurants located in Alaska or Hawaii. Dunkin’ does not believe that the results of Combo Restaurants in Alaska or Hawaii have a reasonable basis for prospective franchisees developing Combo Restaurants in the Continental U.S. Similarly, Dunkin’ does not make any financial performance representation for a prospective franchisee developing a Combo Restaurant in Alaska or Hawaii.

• The average length of time that the franchised Combo Restaurants in the second set of tables have been in operation is 14.3 years.

Table 6 – Continental U.S. Combo Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Freestanding Type

Northeast – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  69
• Average Sales:  $1,967,827
• Average Sales – Dunkin’:  $1,804,924
• Average Sales – Baskin-Robbins:  $162,903

Northeast – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  65
• Average Sales:  $1,430,112
• Average Sales – Dunkin’:  $1,276,322
• Average Sales – Baskin-Robbins:  $153,790

Midwest – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  207
• Average Sales:  $1,670,799
• Average Sales – Dunkin’:  $1,470,266
• Average Sales – Baskin-Robbins:  $201,506

Midwest – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  16
• Average Sales:  $1,034,770
• Average Sales – Dunkin’:  $892,973
• Average Sales – Baskin-Robbins:  $141,797

South – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  233
• Average Sales:  $1,486,206
• Average Sales – Dunkin’:  $1,332,785
• Average Sales – Baskin-Robbins:  $153,420

South – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  15
• Average Sales:  $1,044,573
• Average Sales – Dunkin’:  $916,766
• Average Sales – Baskin-Robbins:  $127,807

West – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  14
• Average Sales:  $1,216,994
• Average Sales – Dunkin’:  $1,024,549
• Average Sales – Baskin-Robbins:  $192,446

West – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  1
• Average Sales:  N/A
• Average Sales – Dunkin’:  N/A
• Average Sales – Baskin-Robbins:  N/A

Total Continental U.S. – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  523
• Average Sales:  $1,615,601
• Average Sales – Dunkin’:  $1,441,238
• Average Sales – Baskin-Robbins:  $174,697

Total Continental U.S. – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  97
• Average Sales:  $1,301,458
• Average Sales – Dunkin’:  $1,153,379
• Average Sales – Baskin-Robbins:  $148,079

Table 7 – Continental U.S. Combo Franchise Restaurants, Average Restaurant Sales (for the Period January 1, 2022 to December 31, 2022) – Shopping Center/Storefront Type

Northeast – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  15
• Average Sales:  $1,802,082
• Average Sales – Dunkin’:  $1,670,858
• Average Sales – Baskin-Robbins:  $131,224

Northeast – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  236
• Average Sales:  $1,194,339
• Average Sales – Dunkin’:  $1,077,691
• Average Sales – Baskin-Robbins:  $116,647

Midwest – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  71
• Average Sales:  $1,409,063
• Average Sales – Dunkin’:  $1,269,676
• Average Sales – Baskin-Robbins:  $141,379

Midwest – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  44
• Average Sales:  $1,093,161
• Average Sales – Dunkin’:  $968,876
• Average Sales – Baskin-Robbins:  $124,284

South – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  118
• Average Sales:  $1,450,970
• Average Sales – Dunkin’:  $1,287,594
• Average Sales – Baskin-Robbins:  $164,772

South – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  42
• Average Sales:  $1,093,161
• Average Sales – Dunkin’:  $1,005,784
• Average Sales – Baskin-Robbins:  $138,879

West – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  16
• Average Sales:  $1,277,921
• Average Sales – Dunkin’:  $1,028,064
• Average Sales – Baskin-Robbins:  $249,857

West – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  2
• Average Sales:  N/A
• Average Sales – Dunkin’:  N/A
• Average Sales – Baskin-Robbins:  N/A

Total Continental U.S. – Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  220
• Average Sales:  $1,448,800
• Average Sales – Dunkin’:  $1,289,068
• Average Sales – Baskin-Robbins:  $161,197

Total Continental U.S. – Non Drive-Thru Restaurants

• Total Number of Restaurants in Sample:  324
• Average Sales:  $1,174,140
• Average Sales – Dunkin’:  $1,052,439
• Average Sales – Baskin-Robbins:  $121,701

Table 8 – Continental U.S. Combo Franchise Restaurants, Average Cost of Goods Sold and Average Labor Cost Stated as a Percentage of Total Sales (for the Period January 1, 2022 to December 31, 2022)

Northeast

• Total Number of Restaurants in Sample:  383
• Average Cost of Goods Sold:  26.2%
• Average Labor Cost:  26.2%

Midwest

• Total Number of Restaurants in Sample:  331
• Average Cost of Goods Sold:  27.5%
• Average Labor Cost:  26.4%

South

• Total Number of Restaurants in Sample:  402
• Average Cost of Goods Sold:  30.1%
• Average Labor Cost:  24.0%

West

• Total Number of Restaurants in Sample:  32
• Average Cost of Goods Sold:  31.1%
• Average Labor Cost:  28.8%

Total Continental U.S.

• Total Number of Restaurants in Sample:  1,148
• Average Cost of Goods Sold:  28.1%
• Average Labor Cost:  25.5%

• “COGS” means the cost of goods sold, including food, beverages, and items served or associated with the food or beverage, such as cups, napkins, straws, bags, plastic utensils, and wrapping paper.

• A restaurant’s COGS will vary based on, among other things, the owner’s operational ability (including experience with managing quick service restaurant operations), experience building and managing an organization, and commitment to training staff.

• Many of the franchised Restaurants have been open and operating for several years and may have lower cost percentages due to years of experience managing costs.

• Factors affecting COGS include the price of raw materials; the ability to manage and implement proper controls of waste, ruin, loss, theft, and the portion sizes served to the public; regional differences; temporary shortages; the mix of food and beverage items sold; whether the restaurant purchases finished products manufactured at another location; fluctuations in the price of coffee and certain other items and ingredients; seasonal and weather fluctuations; and fluctuations due to periodic marketing and advertising programs. Additionally, freight charges may be higher in some areas and are impacted by the cost of gasoline.

• “Labor costs” means the salaries and wages paid to the franchised Restaurant’s store manager and crew members. It does not include any other amounts associated with employing the franchised Restaurant’s workers, like training wages and costs, payroll taxes, worker’s compensation insurance, bonuses and other employee benefits, or costs to maintain payroll services.

• Labor costs also do not include any salaries, wages, or other expenses associated with multi-unit leaders or managers or other personnel who provide services to multiple restaurants within an organization.

• A franchised Restaurant’s Labor costs will vary based on, among other things, the owner’s operational ability (including experience with managing quick service restaurant operations), experience building and managing an organization, and commitment to training staff.

• Many of the franchised Restaurants have been open and operating for several years and may have lower cost percentages due to years of experience managing costs.

• Factors affecting Labor costs include the local labor market and any applicable federal or state minimum wage law; healthcare legislation; employee turnover and the ability to train and retain employees; owners’ compensation rates that may be included in labor, which varies among franchisees; salary and benefits programs; and scheduling.

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Section VI – Dunkin’ Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️