Do you want to start a Quick Service Restaurant in the U.S. and looking to start your own entrepreneurial journey by opening a Dunkin Donuts Franchise? Well, in this post you’ll find complete details about the Cost to open a Dunkin Donuts Franchise and how to open a Dunkin Donuts?
As an entrepreneur you must be looking for growth and a sustainable business for future. Fast food business is competitive but starting a Franchise of a Popular Quick Service Restaurant chain such as Dunkin can pay off well in the future. Generally, entrepreneurs are attracted to Dunkin’ Donuts because it is a well known brand across the United States and yields good profit-margins for the franchise owner.
The franchise fee for opening one Dunkin Donuts Franchise store is US $40,000. The total investment for opening one Dunkin Donuts Franchise is roughly US $97,500. Dunkin has 10,132 stores in the United States.
Here’s a cost breakup for opening one Dunkin Donut Franchise by Entrepreneur Magazine.
Dunkin Donuts Company Overview
Dunkin’ Donuts is an American multinational coffeehouse and donut company founded by William Rosenberg in Quincy, Massachusetts in 1950. The chain was acquired by Baskin-Robbins’ holding company Allied Domecq in 1990. In the same year company has also acquired the Mister Donut chain and changed its name to Dunkin’ Donuts which facilitated the brand’s growth in North America.
Dunkin’ Brands is a franchise of QSR (quick service restaurants), selling hot and cold coffee, baked goods and ice cream from more than 20,000 outlets worldwide.
The franchise fee for opening one Dunkin Donuts Franchise store is US $40,000. Dunkin has 10,132 stores in the United States.
Dunkin’ Donuts does not provide any financial assistance for opening a Franchise but Dunkin Donuts will help the prospective franchise owner to find financing through financial institutions, lenders and banks. The total cost of opening one Dunkin Donuts franchise is roughly US $97,500 and this includes Franchise fee of US $40,000.
Dunkin’ has earned a 4th place in the top ranking quick service restaurant (QSR) chains in the United States in 2018, in terms of number of units that year. In 2018, Dunkin’ had a total of
Dunkin’ Donuts ranked No. 8 on Entrepreneur Magazine’s 2016 Franchise 500 list that ranked the country’s best franchises. Dunkin was just behind the fast foods giants like Subway, McDonald’s and convenience store chain 7-Eleven.
According to a Forbes report, Dunkin’ grew from 291 stores in 2012 to 371 in 2013 and 405 stores in 2014. The company said, “it plans to maintain that growth rate of more than 5 percent in the coming years.”
Dunkin’ Donuts had a total of 10,132 stores in the United States as of Aril 6, 2020 and the company ‘Dunkin Brands’ that owns Dunkin Donuts and ‘Baskin-Robbins’ earned a total revenue of US $1.32 billion in 2018.
The state of New York alone has 15% of all Dunkin’ Locations in America with a total of 1,569 stores.
Dunkin Donuts was one of the most favorite store among the people of New England for morning coffee, breakfast sandwiches, bagels and, of course, doughnuts. Dunkin’ Donuts is rapidly expanding across the United States with as total of 10,132 stores as of April 6, 2020.
Cost to Open Dunkin Donuts Franchise and Other Requirements
- Total initial investment for opening one Dunkin Donuts Franchise is roughly $217,300 to $1.6 million. For example, real estate cost in New York would be much higher compared to the real estate cost in Alabama, so it affects the total investment required for starting a Dunkin Donuts Franchise.
- Net worth requirement: $250,000
- You need to have $125,000 in Liquid Assets(cash) to approved by the company for opening a Dunkin Donuts Franchise.
- Dunkin Donut franchise fee for opening one Dunkin Donuts Franchise Store US roughly $40,000.
- Here’s a link to the company’s website page about franchising opportunities.
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $40,000 | $90,000 |
| Building Costs | $19,500 | $535,000 |
| Site Development Costs | $0 | $298,000 |
| Additional Development Costs | $4,700 | $82,500 |
| Equipment, Fixtures and Signs | $25,000 | $268,000 |
| Electronic Cash Register / Retail Technology System | $16,000 | $61,000 |
| Licenses, Permits, Fees and Deposits | $500 | $5,500 |
| Real Estate Costs | Varies | |
| Opening Inventory | $4,000 | $20,000 |
| Miscellaneous Opening Costs | $9,500 | $70,000 |
| Uniforms | $0 | $1,200 |
| Insurance | $4,500 | $16,000 |
| Travel and Living Expenses While Training | $2,000 | $35,000 |
| Marketing Start-Up Fee | $0 | $10,000 |
| Additional Funds for First 3 Months of Operation | $0 | $105,000 |
| ESTIMATED TOTAL* (doesn’t include real estate costs) | $95,700 | $1,597,200 |
Other Fees that goes towards running a Dunkin Donuts Franchise
- Royalties: 5.9% of monthly sales
- Advertising: 2-6% of monthly sales
Discounts on Franchise Free for Veterans
For Veterans Dunkin Offers special discount of upto 20 percent off the franchise fee for the first five traditional, freestanding Dunking Donuts Franchise restaurants they open.
How to Open Dunkin Donuts Franchise?
In order to Open a Dunkin Donuts Franchise you need to have Liquid Assets of US $125,000 and your net worth should be at least $250,000. Then you need to complete an application and submit it along with a business plan. Company will also review your financial standing. Company prefers Franchise owners that have prior experience of a restaurant business, multi-chain retail business or a fast food retail experience. It is also an advantage if you have a clear understanding of the real estate development process.
Here’s a Sample Agreement Form for Opening a Dunkin Donuts Franchise.
Here’s how to form a Corporation or LLC in the U.S?
As a prospective Dunkin Donuts Franchise owner, you will be solely responsible for the site/location selection and real estate development. However, the company has its own list of criteria when it site selection and real estate development. Dunkin’s real estate and construction experts can assist you in the process of selecting a location and development, if needed. In certain geographic locations, franchisees are required to develop more than one Dunkin’ Donuts location.
Dunkin’ Brands’ has successfully built its site selection process, whereby the Company is able to assist entrepreneurs in decisions around the best potential location for new openings, thereby creating profits for both the franchisees and the Company.
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Dunkin Donuts Franchise Financing Options
As mentioned above, Dunkin’ Donuts does not provide financing, but the company has developed relationships with lenders to help prospective franchise owners find financing that is competitive, simple and quick. Dunkin’ has built relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll. Possible loan types include business acquisition loans, equipment loans and leases, construction loans and real estate loans. You can also apply for SBA Franchise Loans as Dunkin Donuts is on the list of SBA Franchise Directory and its Code# S0529. The SBA’s Lender Match tool helps small business owners find nearby lenders that administer SBA loans.
Each Dunkin Donut Franchise owner is required to complete a three-day franchise business course prior to opening a franchise. Following the business course there is an initial training program that includes classroom time to help new franchise owners understand the fundamentals of running and managing a Successful Dunkin Donuts Franchise. The training takes place either in Braintree, Massachusetts or Orlando, Florida, U.S.
Dunkin Donuts Franchise Overview
The prospective franchise owner will own a Dunkin’ Donuts Franchising LLC. A Dunkin Donut Franchise is authorised to branded Dunkin’ coffee, donuts, bagels, muffins, compatible bakery products, sandwiches, as well as other food items and beverages that are on the Dunkin Donuts menu. Dunkin offers the restaurant types:
- Freestanding Dunkin Donut Store
- Gas/Convenience Restaurants
- Special Distribution Opportunity (SDO) – Dunkin Donut Franchise running a cart or kiosk at a mall, stadium or any other location such as at a theme park.
- Shopping Center/Storefront – A Dunkin Donut franchise that shares a common wall (or walls) with third parties.
Dunkin’ Donuts Franchise Costs Compared to other Franchises
| FRANCHISE | FRANCHISE FEE | INVESTMENT | ROYALTY |
| Dunkin’ | $40K-$90K | $97.5K-$1.7M | 5.9% of sales |
| McDonald’s | $45,000 | $1M-$2.2M | 4% of sales |
| Krispy Kreme | $12.5K-25K | $440K-$4.1M | 4.5% of sales |
| PJ’s Coffee | $20K-$30K | $168K-$324K | 5% of sales |
| Biggby Coffee | $26K-$35K | $166K-$324K | 6% of sales |
| SCOOTER’S | $40,000 | $423K-$428K | 4% of sales |
Dunkin Donuts Franchise Cost, Earnings and Review
Legal Permits, Documents and Certificates that you need to open a Quick Service Restaurant
Whether you are opening a Dunkin Donuts franchise or your own Quick Service Restaurant under your Trademark and Brand Name, you always need legal permits from local authorities and agencies to successfully start your restaurant and meet compliance. Here’s a list of legal permits you need to start a Dunkin Donut Franchise:
- Business and liability insurance
- Health inspection Certificate
- Tax Payer’s ID
- Foods and drinks handler certificate
- Fire Safety certificate
- Kitchen insurance
- Certificate of Incorporation
- Proof of district-issued food and drinks manager identification card
- Food purchase record storage and record keeping (If you are also involved in the sale of snacks)
- Depot, commissary or service support facility meets vending unit operation needs
- Copy of license for the service support facility and/or a recent inspection report
- Business License
- Business Plan
- Operating Agreement for LLCs
- Building License
- Music License
- Franchise or Trademark License
- Non – disclosure Agreement
- Employment Agreement
- Employee’s Handbook
Useful questions and answers regarding coffee shop permits and licenses.
Insurance required to start and run a Quick Service Restaurant or a Fast Food Store
Insurance is another important aspect when running a food and beverage related business as it is mandatory to cover basic liabilities concerning your property, business and employees. Here’s a list of some of the basic insurance cover that you should consider purchasing if you want to start your restaurant in the U.S. or in some other country:
- General insurance
- Liability insurance
- Kitchen Insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Workers compensation
How Much Does Dunkin Donuts Franchise Owners Make?
The annual sales of a Dunkin Donuts franchise range from about $620,000 to $1.3 million depending on the type of franchise you have such as a Freestanding restaurant, in-line shopping center, or a non-traditional location in a gas station or convenience store. However, locations that have a drive-thru will bring in extra sales of about $200,000 to $300,000 per year. As an investor in the company’s franchise business, you should check Dunkin Donuts annual reports and filings to understand about the company’s revenues and financials.
As a Dunking Donut Franchise owner, you can expect to make 10% to 12% in net profit annually, after paying all the expenses such as franchise fee, staff, food and inventory expenses, rent etc.
Dunkin Donut Franchise Reviews
Worth the wait … Bread taste very good and fresh!!! I love it!
Grand opening as expected very long line but the crew did very good! Despite of everything James follow up my orders ( munchkins) and hold some of my orders as I put some at my car. Thank you!
Kenth C. Saint Helena, CA
Employee on the phone right at the pick up area. Didn’t bother to acknowledge the customer or even look up from her phone she just walked away. And the person in the blue shirt next to her. Look at me and just walked away didn’t even say anything.
It wasn’t until a man can from the back to hand off my order that is sitting on the counter.
On the food aspect… the donuts are mediocre.
The munchkins are better then the regular ones
Michelle P. Vacaville, CA
Latest News, Updates and Tweets from Dunkin Donuts
We hope the above post about Dunkin Donuts Franchise cost and How to open a Dunkin Donuts Franchise will help you move in the right direction and make an informed decision when investing in a Franchise.
We recommend you to do your own research as well and speak with the existing Dunkin Donut franchise owners to get insights and feedbacks about starting a Franchise and how much franchise owners make. It will help you in assessing the costs involved in opening a Franchise and how much return can you expect on your investments.
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