- 2023 Franchise 500 Rank
#5 Ranked #11 last year
- Initial investment
$438K - $1.8M
- Units as of 2023
13,372 1.9% over 3 years
Start a Dunkin' Donuts Franchise | Costs and Requirements
If your entrepreneurial senses are tingling, and you think you’re ready to start a franchise, then a Dunkin’ Donuts franchise might be your sweet spot. Here’s what you need to know.
How To Know If You’re Ready To Start a Franchise
Before you get into Dunkin’ Donuts franchises, you should know whether or not becoming a new franchisee is the right business opportunity for you. It’s a rewarding business, but has its challenges..
Take a look at some of the pros and cons of being your own boss and the aspects of starting a franchise.
Pros of Being a Franchise Owner
- Sense of achievement
- Opportunities for leadership
- Income potential
- Automatic brand awareness and customer base
Cons of Being a Franchise Owner
- Financial risk
- Work schedule Potential challenging situations with employees
- Must follow the franchise model
Related: #1 on the Franchise 500: Even Without the 'Donuts', Dunkin' Takes the Cake
Unique Requirements of a Franchise Owner
While being a franchise owner is a version of entrepreneurship, some unique aspects come with franchising.
Answer these questions for yourself about the realities of being a franchise owner:
- Are you willing to follow someone else’s rules, even when you disagree or think your way is better?
- Can you accept mentoring or advice on how to run your business from the parent company?
- Are you comfortable sharing your finances and paying royalty fees?
- Can you “buy in” to the franchise system you choose?
Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.
Are You Interested in Opening a Dunkin' Franchise?
If you’re still on board for the franchise journey, keep reading to discover all about Dunkin’.
A History of Dunkin’ Donuts
It’s essential for franchise owners to know the background of their business. If you’re intererested in opening a Dunkin’, you should touch up on the franchise’s history.
In 1948, Bill Rosenberg opened a local coffee shop in Quincy, Massachusetts (just south of Boston) called The Open Kettle.
Like McDonald’s and Starbucks, Dunkin had small, humble beginnings with cheap menu items. The original price for coffee and donuts? Five cents and ten cents, respectively.
Rosenberg switched the name to Dunkin’ Donuts in 1950 and started franchising five years later. By 1965, there were over 100 locations.
Now called Dunkin' (no Donuts), Dunkin' locations focus on donuts, bagels, coffee, and breakfast sandwiches. Typically, most Dunkin’ locations cater to those looking for a breakfast starter, but it can still be valuable for customers throughout the day.
Dunkin' is a national brand, and, as their slogan says, "America runs on Dunkin'." Dunkin’ has a solid national and international presence, boasting over 9,400 U.S. franchises and another 3,4000+ internationally.
Perks of Starting a Dunkin’ Franchise
Owning a Dunkin' franchise can be a wise choice for franchisees who are community-oriented and enjoy food service.
Related: The 10 Commandments of Franchise Ownership
It is also suitable for franchisees who want options for restaurant layout and operational times. A franchisee might be able to run drive-thru only, freestanding storefronts, or a combination of both. They may also be in a position to operate 24/7.
Other perks include:
- Recognized brand
- Large customer base
- Numerous available markets
- Active quality support team
- Training programs
- Relevant to its customers and culture
Dunkin' has made several improvements to its restaurant designs and continues to maintain its foothold in the market. As a franchisee, you can take advantage of Dunkin's local branding methods and new seasonal products.
Customers may also take advantage of Dunkin' Rewards and reward opportunities specific to your location. You also may see the benefits of an expanded snack menu and breakfast options. This automatic diversification of revenue may result in better chances of customer conversion.
To be a part of the Dunkin’ team, you’ll want to ensure you are financially sound enough for initial investment fees and other startup costs. In addition, you should be aware of and prepare for the ongoing fees associated with franchise ownership, including advertising, royalty, and potential renewal fees.
Related: Want to Make Smart Investments? Use These Expert Tips.
Dunkin’ Franchising FAQs
Are you looking for more facts and figures about opening a Dunkin’ location? Take a look at these Dunkin’s FAQs and their answers.
What Are the Costs of “Traditional” Dunkin’ Opportunities?
- Initial franchise fee: $40,000-$90,000
- Franchise fee: 2-6%
- Store size: 1200-1600 square feet
- Advertising fee: 5%
- Total investment range: $526,900-$1,787,000
What Are the Costs of “Nontraditional” Dunkin’ Opportunities?
- Initial franchise fee: $1,000-$2,250 per year
- Franchise fee: 5.9%
- Store size: 500 square feet
- Advertising fee: 2.5%
- Total investment range: $121,400-$972,800
How Much Money Will You Make?
As a Dunkin’ Donuts franchise owner, there is no guarantee for what you might make, just like any business venture you embark on. Although owning a franchise can offer more stability than a small business without corporate backing, there is still no way to make an exact calculation for that.
When you are ready to complete an application form to continue your research on Dunkin’, they will provide their Franchise Disclosure Document (FDD) which includes information to help you evaluate the opportunity potential to those filling out an application form.
Related: 4 Tips for Creating a Strong Franchise Infrastructure #FranchiseBible
Does Dunkin’ Offer Discounts or Incentives?
Dunkin' offers some incentives and discounts for particular circumstances and qualified veterans around franchise fees.
Will Dunkin’ Provide Financing?
Dunkin’ partners with lenders and SBA-backed financers to provide franchise investors with financial assistance. These lenders offer financing options on:
- Business acquisition loans
- Equipment loans and leases
- Real estate loans
Related: What is an SBA Loan? Everything You Need to Know
How To Open a Dunkin' Franchise
If you’re ready to become a Dunkin’ franchise owner, here’s the step-by-step guide to open your own storefront.
1. Get Your Finances in Order
Before making any financial commitment or signing a franchise agreement, you must perform your due diligence and establish if this is the right franchise opportunity for you.
- Speak to existing franchisees and ask questions directed to the Dunkin' team
- Check into revenue and fees (industry fees, royalty fees, marketing fees)
- Make sure your net worth and available liquid capital match the brand’s requirements to ensure you qualify to open a Dunkin' franchise
The nitty gritty about becoming a franchise owner is that the financial requirements can cause quite a barrier to entry. Before you jump to step two, check out the economic facts about the Dunkin’ Donuts franchise cost:
- Required liquid assets: $250,000
- Necessary net worth: $500,000
While these numbers might look high, becoming a Dunkin’ franchise owner is considerably less than competitor brands, like Krispy Kreme, which averages a cost of $440,500 to $4,115,000, according to FDD data, to open.
2. Evaluate Your Options
As you decide if opening a Dunkin' franchise is the right decision for you, make sure you take time to explore the opportunity. Research the Dunkin’ brand and your local area to see if a Dunkin' franchise would do well in your community.
While competition is healthy in general, it can be even more crucial to the success of Dunkin’ locations. In some situations, coffee shops (of the same brand) located very close to each other can actually drive more traffic to each of the locations.
Additionally, you may want to consider high-traffic areas and locations near the highway.
3. Create a Business Plan
A business plan is a document you will present to franchise officials to show them how you will earn money, manage finances, run operations, and other vital details. The powers that be will use it to evaluate your strategic planning.
Your business plan should include the following:
- Executive summary
- Market analysis
- Target audience
- Logistics and operations
- Financial details
A significant benefit of becoming a franchise owner is that your business plan will not have to be put together from scratch. The corporate side will offer established operations and marketing systems for you.
4. Obtain a Franchise License Agreement
Related: Ready to Commit? - Franchise License Agreement - Entrepreneur.com
The agreement will include clauses about:
- Ownership rights of the brand
- Proprietary business operations
- Conditions of your ownership
- The initial term and renewal agreement
5. Create a Business Entity
Next, you’ll need to decide which type of business entity based on how you’d like to categorize your expenses. You’ve got two options:
- Limited liability company (LLC)
Make sure you weigh your options to see which is best for you and your business.
6. Pick Your Space
The paperwork is finished, the contracts are signed, and it’s time to find the perfect space for your new store. The franchisor will likely have guidelines and regulations for the space, so keep that in mind as you begin your search. They may even have real-estate professionals on staff to help you find the right location.
Other specifics to consider are:
- Branding possibilities
7. Employ Your Team
This is one of the most exciting parts of becoming a franchise owner. While some things will not be your choice, who you hire will be. Most corporations will likely have job descriptions, titles, and a database. However, it will be up to you who you choose for your new team.
Ready To Run on Dunkin’?
Starting your Dunkin’ franchise could be an exciting new business venture for you. If you have the financial capital and drive, you can build your dream one donut at a time.
Looking for more on all things franchise? Explore Entrepreneur’s Franchise Center here.
|Franchising Since||1955 (68 years)|
|# of employees at HQ||3,000|
This company is offering new franchisees throughout the US.
This company is offering new franchisees worldwide.
|# of Units||13,372 (as of 2023)|
Information for Franchisees
Here's what you need to know if you're interested in opening a Dunkin' franchise.
Financial Requirements & Ongoing Fees
Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
|$40,000 - $90,000|
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
|$437,500 - $1,809,500|
Net Worth Requirement
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
Definition: A discount or other incentive offered to military veterans who buy a franchise with this company.
|20% off franchise fee for first five traditional restaurants|
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
Term of Agreement
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
|Is franchise term renewable?||Yes|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|Third Party Financing||Dunkin' has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll|
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
|On-The-Job Training||218-431 hours|
|Classroom Training||62.5-80.5 hours|
Meetings & Conventions
Security & Safety Procedures
Franchisee Intranet Platform
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Dunkin' landed on this year's Franchise 500 Ranking versus previous years.
Curious to know where Dunkin' ranked on other franchise lists? Find out below.
Are you eager to see what else is out there? Browse franchises that are similar to Dunkin'.
- Custom garment decorating
- Breakfast, brunch, and lunch cafes
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