Overview
Planning to invest in a profitable business opportunity with low capital requirements, Dunkin’ (formerly Dunkin’ Donuts) is worth considering. According to a recent study, over 70% of America’s population consumes coffee and doughnuts daily, which simply means opening a Dunkin’ franchise in USA is a profitable idea.
For people looking for such a lucrative opportunity, there’s good news that Dunkin’ is inviting franchise applications to expand their doughnut and coffee empire. As a new entrepreneur, you may find the application process to be time-consuming and confusing, but below, we have break down all the information required to start a Dunkin’ Donuts franchise, including initial cost, Franchise fees, and application process.
| Year of Establishment | 1954 |
| Franchising since | 1954 |
| Headquarters | Atlanta, Georgia |
| Estimated Number of Units | 12,600 |
Dunkin’, popularly known as Dunkin’ Donuts, is a well-renowned US-based multinational coffee and doughnut chain. Since it was founded in 1954 by Bill Rosenberg, the brand has become the center of attraction for millions of coffee and doughnut lovers in the US.
The company began franchising in 1955. The current franchisor is Dunkin’ Donuts Franchising LLC. However, Inspire Brands remains the ultimate parent company. The franchisor is responsible for developing, operating, and franchising retail restaurants using the Dunkin’ system.
In 2019, the company rebranded as a “beverage-led company” and renamed to Dunkin’, with US stores starting to use the new name. Today, Dunkin’ is among the largest cafe chain in the world, with nearly 13,000 outlets in 32 countries. Among them, over 8,000 units are located in the US.
With a strong reputation, the company has come a long way from just a small cafe to a multi-billionaire business as it is today. With that, Dunkin’ has also expanded its menu beyond doughnuts and coffee to bagels, delicious muffins, croissants, and even hearty sandwiches for lunchtime.
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Types
Dunkin’ LLC offers multiple franchise options for all sorts of investments. So whether you’re planning fully-fledged outlets or a limited menu express counter, Dunkin’ has every option to offer you. Here’s detailed information on each franchise type offered by Dunkin’:
Shopping Center/Storefront:
These stores are often found at shopping malls, sharing a common wall with other parties or stores. These outlets can be seen at an endcap or inline rent space in a shopping center or at a location in high-density, multiple-level constructions. This can be an urban/downtown office building setting.
Freestanding:
It refers to a newly-built restaurant or an existing structure (to be retrofit) that doesn’t share any common walls with any third party.
Gas/Convenience Restaurants:
These units are often seen at gas or convenience store. These units are smaller in size with little to no sitting space.
Special Distribution Opportunity (SDO):
These locations refer to the restaurants and any cart or kiosk with special distribution opportunities or non-traditional outlets. These are often found within another host establishment, such as a stadium or another retail facility.
Dunkin’ Franchise In USA: Eligibility Criteria
As a global brand, Dunkin’ doesn’t give away its franchise services to any entrepreneur. As a potential candidate for the Dunkin’ franchise In USA, you must meet the eligibility criteria set by the franchisor. Below, we have listed out a few eligibility and personality traits required to set up a new Dunkin’ franchise in USA. Failing to meet these criteria may result in getting your application being rejected.
Here’s what Dunkin’ looks for in an ideal franchise applicant
- Experience in food service, retail, or multi-unit management
- Willingness to comply with company rules and brand requirements
- Understanding of the real estate development process to choose an ideal site for your restaurant
- Must have good interpersonal skills to deliver exceptional customer service
- Committed to learning about business and marketing
- Versatility to make sound business decisions that adapt to market trends.
Start-up Cost, Fees & Financial Requirements
The cost of opening a new franchise in the USA will vary, depending on various factors, including the size, location, and type of franchise. Remember, there are fixed and flexible fees associated with opening a franchise. Here’s a breakdown of the initial cost & financial requirements to open a Dunkin’ franchise in USA:
Financial Requirements for Dunkin Franchise
- Initial franchise fee: $40,000 to $90,000 (varies by location)
- Net worth: $500,000 minimum
- Liquid Capital: $250,000 minimum
Initial Cost/Investment
| Cost | Minimum | Maximum |
| Initial Franchise Fee | $10,000 | $90,000 |
| Site Development Costs | $0 | $350,000 |
| Building Costs | $19,500 | $600,000 |
| Equipment, Fixtures and Signs | $57,000 | $300,000 |
| Additional Development Costs | $4,700 | $90,000 |
| Restaurant Technology System | $9,700 | $95,000 |
| Real Estate Costs | Vries | Varies |
| Licenses, Permits, Fees and Deposits | $500 | $5,500 |
| Opening Inventory | $4,000 | $20,000 |
| Miscellaneous Opening Costs | $9,500 | $70,000 |
| Insurance | $4,500 | $16,000 |
| Staff Uniform | $0 | $1,200 |
| Marketing Start-Up Fee | $0 | $10,000 |
| Travel and Living Expenses While Training | $2,000 | $35,000 |
| Additional Funds for First 3 Months of Operation | $0 | $105,000 |
| ESTIMATED TOTAL* (excluding real estate costs) | $121,400 | $1,787,700 |
Fixed Fees/Costs
| Fees | Amount |
| Continuing Franchise Fee | 5.9% of gross sales. |
| Franchise Transfer Fee (for the first 3 years) | $12,500 (or $20,000 if the restaurant is a combo) |
| Continuing Advertising Fee | 5% of total gross sales. |
| Audit Costs | Entire cost to audit the gross sales reports, including legal and investigative costs. |
| Immigration Status Review Costs | Varies |
| Interest, Late Fees, and Collection Costs | 1.5% per month |
| SDA Transfer Fee | $10,000 |
| Indemnification | Varies |
| SDA Transfer Fee (for a less than majority interest or transfer to spouse or children) | $2,000 for each new transfer |
| Fixed Documentation Fee – General | $2,000 per restaurant |
| Fixed Documentation Fee – Transfers | $2,000 per restaurant |
| Lease Fee | Varies |
| Costs for Tests Used to Approve Additional Supplier(s) | Typically $1,000 to $10,000 |
Financing Support
As Dunkin’ doesn’t provide any direct financing support to the new franchise; instead, it provides loans through third-party lenders, which may provide financing to qualified candidates.
The loan amount and repayment period vary on several factors, including the program, circumstances, and applicant’s credit score. However, the last decision to provide financing is at the sole and absolute discretion of the respective lending firm.
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Application Process
There’s a multi-step process for applying for a Dunkin franchise in USA, which may take between 8 to 12 weeks. During this time, the franchisor will review your application and business plan before approval.
Following that, the development stage may take up to 8 to 15 months. During this time, you can search for the location, and real estate, construct your restaurant and train your staff. Below, we have outlined the simple steps for applying for a new Dunkin franchise location.
Submit Your Application
The first step is sending a proposal by filling out and submitting the application form on the official website. Additionally, you are required to upload your resume during the application process, so keep your resume updated. Upon application submission, the franchisor will send you their FDD and qualification package, which include:
- A copy of the franchise agreement
- A list of existing franchisees who can answer any questions you may have
- Dunkin’s financial statements
- Cost breakdowns (advertising, royalties, etc.)
Meet The Team & Prepare A Business Plan
If your application meets the eligibility criteria, you will get a chance to meet with a franchise manager. With the team, you can prepare a good business plan. This is your opportunity to ask questions regarding opening a Dunkin franchise. Ask as many questions as you can.
On the other hand, you can also meet the existing managers of the other Dunkin franchisees. This is the crucial step that will help you in deciding whether this is the right franchise for you.
Get Approval
You have now submitted your application, cleared the background and credit check, and submitted your business plan for the Dunkin franchise application process. If everything goes as per plan, your application and business plan will be approved. The shop development agreement (SDA), which entitles you to create a Dunkin’ Donuts facility within a certain geographic area, must then be signed now.
The franchise agreement, a binding contract between the franchisor and franchisee, will also be signed by you. It specifies what is expected of each party. For instance, the franchisee may be required to open a specific number of units within a specific time frame. In addition, the franchisor may be required to provide specific marketing materials in return.
Prepare Training Program
After signing the agreement, you and your staff will undergo a mandatory training program. The program aims to help franchisees in serving quality food with outstanding excellence. You start your franchisee training once your approval has been submitted.
This will feature three-day business classes in Boston, Massachusetts, as well as online courses on business management. Additionally, a team will assist you with finding funding, picking a location for your unit, and starting building. More details about the training program are listed below.
Get Ready For Grand Opening
After the building is finished, you must design your store. Make sure you adhere to their branding guidelines and use just the pink, orange, brown, and white color palette. Additionally, you’ll need to recruit your new staff.
Training Support
Dunkin’ Donuts offers the industry-best training support to new franchisees. You can contact professionals anytime that can assist you with development, construction, training, marketing, and operations.
Dunkin’ offers a thorough 6-week training program to assist you in being ready when your restaurant gets ready. Here is a breakdown:
- Week 1: Dunkin’ Brands
- Week 2-3: Restaurant Management Systems
- Week 4-6: Manufacturing and Production
The company also offers benefits to new franchises from a multi-million dollar advertising budget that supports both local and national marketing initiatives. Dunkin franchise has innovative menu items and cutting-edge technology to accompany it. Customers may view menu items, load and reload their DD cards, find nearby stores, and send virtual gift cards with the Dunkin’ Mobile app.
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Conclusion
Owning a Dunkin franchise in USA can be a profitable business move for people looking to work with a company that has strong net sales and is expanding quickly. In addition, the level of brand popularity that Dunkin enjoys in the US market cannot be overstated.
Even though this might be the right business for you, be sure to understand the initial cost & fees and look at other alternatives available in the food and beverage sector.
FAQ’s
Is Dunkin’ Franchise In USA Profit Worth The Franchise Cost?
Yes, the brand popularity of Dunkin’ makes it a profitable deal for potential franchisees. The profits from Dunkin’ are absolutely worth the cost.
How Many Dunkin Franchises Are There In The Us?
Dunkin’ currently operates more than 11,300 locations worldwide, including more than 8,500 in the United States and more than 3,200 in other countries.
How Many Dunkin Donuts Are Franchised?
Today, Dunkin’ has over 12,000 franchise locations around the world.
How Much Does A Dunkin Donuts Franchise Owner Make A Year?
The annual sales of the typical Dunkin’ franchise range from $620,000 to $1.3 million. As a result, the typical Dunkin’ franchise owner earns about $124,000 annually.
How Much Does It Cost To Open A Dunkin Donuts?
The total investment range for starting a new Dunkin’ franchise in USA is anywhere between $97,500 to $1.7 million, which includes the Initial franchise fee of $40,000 to $90,000.
Which Is The Busiest Dunkin Donuts In America?
Although it isn’t stated on the Dunkin’ Donuts website, still, the South Weymouth, Massachusetts location is sometimes referred to as the busiest Dunkin’ Donuts in the country.
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