Learn About Buying Into a Dunkin Donuts Franchise

A Dunkin' Donuts cafe is viewed on July 25, 2013 in New York City. In a surprise to Wall Street, Dunkin' Donuts reported a same-store sales rise of 4 percent for the latest quarter. The coffee, donut and sandwich chain also announced its return to California with a deal for 45 new cafes in Southern California.
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In 1946, William Rosenberg founded Industrial Luncheon Services, a company that delivered meals and snacks to factory workers in the Boston area. During his time selling food in the factories and construction sites, Rosenberg noticed that the two most popular items he was selling every day were coffee and doughnuts. Convinced he could make more money focusing on just those two items, he closed Industrial Luncheon Services in 1948 and opened a doughnut shop in Quincy, Massachusetts called the Open Kettle.

A year later, Rosenberg changed the name to Kettle Donuts, before finally changing it to Dunkin’ Donuts a year after that. After slow steady growth, primarily through franchising, Dunkin' grew to 100 locations by 1963, when William’s son Robert took over the leadership of the company, where he stayed for the next 35 years.

Today, there are more than 11,300 Dunkin' Donuts worldwide located in more than 36 countries, serving not only coffee and a wide variety of doughnuts, but also bagels, baked goods, sandwiches, and an increasing variety of hot and cold beverages.

In the United States alone, there are more than 8,400 Dunkin' Donuts restaurants located in 36 states, all franchises, in addition to over 3,300 franchised locations internationally. Dunkin' Donuts parent company, Dunkin' Brands Inc., also franchises Baskin-Robbins, and the parent company sometimes co-brands the two concepts.

Background and Benefits

Dunkin' Donuts offers some of the industry's best field support experts covering franchising, development, construction, and marketing.

Dunkin' Donuts has proven expertise in providing franchise opportunities by offering comprehensive assistance that ranges from site selection through the development process to providing ongoing new product training.

The Company’s training and support teams deliver the tools and information franchisees need with a level of support that is “among the best in the Quick Service Restaurant (QSR) industry.” Dunkin' Donuts provides the tools and guidance you would expect from a multi-national conglomerate, and they do it well.

Dunkin' Donuts technology is state-of-the-art, and helps franchisees “operate more efficiently and cost effectively.”

How Much Does a Dunkin' Donuts Franchise Cost?

A significant amount. Dunkin has grown into one of the preeminent brands globally, and as such the barriers to entering are rather high. After you pass your criminal background check, credit check, and proof of assets check, it's on to due diligence and the development of your business plan. This is a labor of love requiring a net worth of at least $250,000 and a liquidity of $125,000.

If you are thinking about a partnership, go ahead, but there is one caveat; one single candidate must personally meet the financial qualifications. The initial franchise fee is a tame $40,000 to $90,000 in contrast, and if you want more units, you have to expand at the rate of 5 at a time.

What We Like

The product is top tier, and the Dunkin' Donuts brand has established itself as the leading coffee alternative to the expensive, bitter, pretentious offering that is coming out of the company from Seattle. Unless you were born in a barn and never left the farm, you have both heard of and enjoyed this confection on many different occasions.

An investor with excellent resources should consider this winner.

It is like betting on all the horses with each one carrying a 20:1 payout. You can’t lose, and if you need a little cash to get started, Dunkin’ Donuts has lender relationships just waiting to help you. “Time to make the Donuts…”

The Pros

  • Name Recognition - If you can afford it, Dunkin' Donuts offers unlimited profit potential for the most astute entrepreneur.
  • Competitive - Dunkin' Donuts is in the top 5 of all categories of franchises according to Entrepreneur magazine.
  • Online University - The Dunkin' Donuts Online University offers numerous learning programs, courses, and resources to franchisees and crew 24 hours a day, 7 days a week.

The Cons

  • Candidate Profile - Becoming a Dunkin' Donuts Franchisee requires skills and resources that make this opportunity prohibitive for many investors.
  • Many Lawsuits - Dunkin' Donuts has been involved in many lawsuits with their franchisees. They have been involved in 10-15 times a number of lawsuits than the average franchise.

    Dunkin' Donuts Franchise Information

    • Ranking on Entrepreneur's 2016 Top Franchises list: 8
    • Business Established: 1950
    • Franchising Since: 1955 (61 years)
    • Initial Franchise Fee: $40,000 - $90,000
    • Initial Investment: $217,300 - $1,637,700
    • Ongoing Royalty Fee: 5.9%
    • Ad Royalty Fee: 2-6%
    • Net-Worth Requirement: $250,000
    • Liquid Cash Requirement: $125,000