Duck Donuts, a renowned name in the donut industry, is celebrated for its unique concept of “Warm, Delicious & Made-to-Order” donuts. The franchise embarked on its journey in the scenic Outer Banks of North Carolina, with the first store opening its doors in Duck and Kitty Hawk.
This humble beginning soon transformed into a global sensation, leading to Duck Donuts becoming an award-winning brand recognized for its innovative approach to donut making. The franchise took a significant step in 2013 by opening its first franchise location in Williamsburg, VA.
Headquartered in Mechanicsburg, Pennsylvania, Duck Donuts sets itself apart with a business model that emphasizes simplicity, growth potential, and ease of operation within a compact store layout. This model has been designed to cater to various operational scenarios, including traditional stores, non-traditional locations, food trucks, and even catering services, offering franchisees multiple avenues for revenue.
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Here’s what you can expect to spend to start a Duck Donuts franchise.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $40,000 |
| Your Training Expenses | $0 – $2,500 |
| Premises Deposits | $2,500 – $4,500 |
| Professional Design | $6,000 – $15,000 |
| Leasehold Improvements | $240,000 – $350,000 |
| Signage | $7,800 – $13,500 |
| Furniture, Fixtures, Equipment | $110,000 – $137,000 |
| Computer Systems | $15,000 – $17,000 |
| Initial Inventory | $7,000 – $10,000 |
| Grand Opening Marketing | $12,500 – $15,000 |
| Professional Fees | $750 – $5,000 |
| Licenses and Permits | $100 – $2,000 |
| Insurance | $3,000 – $5,000 |
| Operating Expenses / Additional Funds – 3 months | $20,000 – $30,000 |
| Total (excluding tenant allowance) | $464,650 – $646,500 |
Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.
Here are the main ongoing fees the franchisor will ask you to pay going forward to run the franchise.
When signing the Franchise Agreement, the Initial Franchise Fee is $40,000. This fee is fully earned by the franchisor and due in a lump sum upon agreement signing. It is non-refundable under any circumstances.
For multi-unit development, a Development Fee is charged upon signing the Multi-Unit Development Agreement. This fee is $60,000 for a minimum of two Duck Donuts outlets, plus an additional $10,000 for each extra outlet agreed to be developed. Like the Initial Franchise Fee, this fee is non-refundable and fully earned upon payment.
The Royalty Fee is 5% of weekly Gross Sales through December 31, 2024, and increases to 6% of weekly Gross Sales starting January 1, 2025. This fee is payable weekly, based on the gross sales of the preceding week.
Franchisees are required to spend a minimum of 2% of their Gross Sales on local marketing and advertising. These expenditures must be pre-approved by the franchisor.
Franchisees must contribute 1% of their Gross Sales to the Brand Fund, subject to an increase to no more than 3% of Gross Sales. This contribution is made monthly.
A relocation fee of $7,500 is due if the franchisor approves the franchisee’s request to relocate their Duck Donuts outlet.
A fee of $7,500 is payable before signing a successor agreement to continue operating the franchise after the initial term.
The Transfer Fee varies depending on the circumstances of the transfer: $20,000 for standard transfers, with reduced fees for transfers to existing franchisees in good standing, entities owned and controlled by the franchisee, or immediate family members under certain conditions.
Initial training for up to four people is provided at no charge. Additional trainees are charged a fee of $500 per person. Franchisees are responsible for all travel costs associated with training.
and 2,124 other brands just like it.
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Opening a Duck Donuts franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Duck Donuts franchise.
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