Franchise: Dunkin’ Donuts
Franchising Since: 1955
Headquarters: Canton, Mass.
Number of Units: 12,871 (approx)
About the Dunkin Donuts Franchise
Dunkin’ Donuts has become one of the most recognizable brands in the country. Dunkin’ Donuts originally started as a business that keeps it simple, serving coffee and doughnuts. While Dunkin’ Donuts still does that – and does it very well, many would argue — they’ve also been expanding their product line. Mainly, they’re attempting to entice their customers to come back for lunch.
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In the past five years, Dunkin’ Donuts has increased its number of U.S. locations by 8,000 to a total of just over 12,000. Dunkin’ Donuts stores can also be found in over 35 countries.
Requirements for Dunkin Donuts Franchisees
Dunkin’ Donuts requires that its franchisees have a net worth of at least a quarter of a million dollars, with $125,000 of liquid capital available. To start a franchise, a franchisee will have to make a minimum investment of just over $200,000. For that investment, a franchisee obviously benefits from Dunkin’ Donuts’ great brand reputation and recognition.
Financial Assistance
The franchisor facilitates through third-party lenders, financing for qualified franchisees. The amount of financing and period of repayment varies by program, circumstances, and creditworthiness of the applicant.
Term of Agreement and Renewal When Purchasing a Dunkin Donuts Franchise
The length of the franchise term is typically 20 years. Additionally, if they comply with all requirements, the franchisee may purchase an additional term.
Breakdown of Costs for a Dunkin Donuts Franchise
The following information is compiled from the Franchise Disclosure Document of Dunkin’ Donuts (2019). The FDD will provide you with in-depth information regarding the costs and expenses you can plan to incur when developing a Dunkin’ Donuts franchise.
The Building Costs and Site Development Costs vary due to location. Also, they can vary if it is within a convenience store, freestanding versus a shopping center, and/or if it has a Baskin Robbins attached.
Initial Franchise Fee (20-year term): $40,000 to $90,000
Building Costs: $90,000 to $540,000
Building costs include the cost to construct a building. The franchisor estimates that a freestanding building will cost $60 to $260 per square foot (estimating 1,000 to 2,500 square feet).
Site Development Costs: $0 to $200,000
Site development costs include the costs to develop the land and other site improvements. This includes exterior landscaping, electrical and water hookup, paving, sidewalks, lighting, etc. The low end of the range is the estimated cost for you to negotiate a build-to-suit lease. This is a lease in which the landlord incurs most development costs, and you make a lease deposit.
Real Estate Costs: Varies
Real estate costs vary considerably according to the type of restaurant. Additionally, they will depend on real estate values in your area, your real estate interest (leasehold or ownership), location, size of the site, code requirements and other factors. For example, they include labor costs, as well as whether you, your landlord, or the franchisor develop the restaurant.
Electronic Cash Register/Retail Technology System: $24,700 to $61,000
Opening Inventory: $8,000 to $20,000
Your initial inventory of merchandise and supplies you will need for the operation of the restaurant will include raw ingredients and products for resale. Also, it will include containers and other paper, plastic, or similar goods, maintenance and cleaning materials, office supplies, and miscellaneous materials and supplies.
Misc. Opening Costs: $9,500 to $70,000
These costs are related to pre-opening employee training payroll, utility deposits, petty cash, distribution center refundable fee, interior landscaping plants, sound systems, office supplies, licenses and permits, and banking pre-opening costs.
Licenses, Permits, Fees and Deposits: $3,500 to $5,500
Uniforms: $400 to $1,200
Insurance: $4,500 to $16,000
You must provide commercial general liability coverage with minimum limits in the amount of $2,000,000 per occurrence. You will also need to provide employment practices liability coverage with minimum limits in the amount of $1,000,000 per occurrence. Additionally, you must provide all-risk property coverage, plate-glass coverage, and employers’ liability and workers’ compensation insurance, in accordance with the franchisor’s published standards.
Travel and Living Expenses While Training: $2,000 to $35,000
The above-estimated range of costs is for two people to attend the Dunkin’ Donuts initial training program for 6 to 8 weeks (depending on the production platform and the opportunity to support a new restaurant opening), including transportation, board, lodging, sanitation exam, and uniforms.
Marketing Startup Fee: $10,000
Additional Funds for First 3 Months of Operation: $105,000
ESTIMATED TOTAL (doesn’t include real estate costs): $272,600 to $1,523,050
These figures are estimates in setting up a Dunkin’ Donuts franchise and operating it for three months. It is possible to exceed costs in any of the areas above.
If you want to see more about the Dunkin’ Donuts Franchise application, they have it conveniently listed along with other information to review before purchasing.
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