Buying a Dunkin’ Franchise

Top 20 Most Popular Franchises: Dunkin’

Vetted Biz is the leading platform for accessible and analytical data on franchises and businesses available in the U.S. Our research team has reviewed over 2,650 franchises and knows the key facts and data that signal a successful franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate.... system. Upon extensive review, our team was able to compile the “Top 20 Most Popular Franchises in the United States.” In the article below, we review the business model proposed by one of these 20 franchises: Dunkin’, as well as the requirements that encompass its franchise application process.

Dunkin’ Donuts

The story of Dunkin’ Donuts began in 1948 when its founder, Bill Rosenberg, opened a donut and coffee restaurant in Quincy, Massachusetts called “Open Kettle.” After seeing his business grow by selling doughnuts for five cents and coffee for ten cents, Rosenberg renamed his restaurant to “Dunkin’ Donuts” in 1950, after a brainstorming session with his executives. At the time, his goal was to “make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well merchandised stores,” a philosophy which still holds true today. Franchising began 5 years later, and by 1960, the number of restaurants had already grown to over 100 shops. Today, Dunkin’ Donuts stores can be found in over 32 countries, serving over 70 varieties of doughnuts along with hot and cold coffee drinks, bagels, breakfast sandwiches and other baked goods. Additionally, Dunkin’s parent company, Dunkin’ Brands inc. also franchises Baskin-Robbins, and the two concepts are on occasion also co-branded. Dunkin’ is currently headquartered in Canton, Massachusetts, and is run by its CEO David Hoffmann who previously served as President of High Growth Markets at McDonald’s Corporation.

How Much Does a Dunkin’ Donuts Franchise Cost?

The total investment amount to establish a Dunkin’ franchise ranges from $395,500 to $1,597,200. This includes the company’s franchise fee that ranges from $40,000 to $90,000. Once the store has been built and operations begin, franchisees are then expected to pay Dunkin’s corporate team a royalty fee of 5.9% on gross salesThe total amount in dollars made in the business before expenses are deducted. See also Gross Revenue...., and a marketing fee of 5% on gross sales in exchange for the marketing services provided by the franchisor. The franchisor is particularly looking for experienced candidates who are willing to run the business on a daily basis and who have enough capital to support a multi-unit franchise development. That said, the minimum net worthValue of all the non-financial and financial assets of a business buyer. There is usually a minimum net worth requirement to qualify as a franchisee and for bank financing.... required to own a Dunkin’ franchise ranges from $250,000 to $500,000 and the applicant must have liquid assets ranging from $125,000 to $250,000.

Dunkin’ in Numbers

When evaluating a Dunkin’ franchise’s potential for growth, one does not need to go beyond Quick Service Restaurant (QSR) numbers to better understand the prospect for success of the opportunity at hand. The fast-food industry generated $200 billion in revenues in 2015 and the industry has since been expected to have an annual growth of 2.5% for the following subsequent years. Dunkin’ itself, is considered a leading U.S. QSR concept and in 2019 was ranked number 8 in QSR Magazine’s top 50. Looking at the franchise’s internal performance, although limited data was made available on the financial status of the company’s franchisees, it was found that only 144 franchises ceased operations in 2019 – an insignificant value when contrasted with the total amount of franchises under Dunkin’s franchise system. Moving forward, Dunkin’ is looking to establish new units across a number of states in the U.S.

Summary

Investing in a Dunkin’ franchise is an interesting opportunity, especially for individuals looking to make their way into the QSR industry.  The prospects for growth and success within the industry and the Dunkin’ brand itself, are extensive and a number of markets continue to be available as they move forward with growing their presence across the country. If you are an individual with extensive management experience and are willing to invest an amount ranging from $395,500 to $1,597,200 or more, Dunkin’ is the right franchise for you!