The Duck Donuts franchise joined the USA franchise market relatively late. Russ DiGilio and Robin Griffith opened the first outlet in 2006, and in 2013 they started to offer franchising opportunities to interested investors.
Duck Donuts franchise with rapid expansion in the U.S. market has shown that they have a bright future. The global donut market is constantly growing regardless of the current financial conditions, and that is why many entrepreneurs are starting new business ventures in this niche of business.
This franchise number of outlets is growing every day, and they currently operate in more than 100 locations across the U.S. and internationally. This expansion can be attributed to the relatively low cost that this franchise requires. The Duck Donuts franchise cost is much lower than, for example, Dunkin Donuts, and that is why many investors opt for this option.
How Much Does The Duck Donuts Franchise Cost
The total investment in starting a Duck Donuts franchise is in the range between $351,164 and $541,448. This cost varies accordingly on the location, store size, and the type of franchise. Investors who choose to open multi-unit franchises can reduce costs because they will get a discount on the initial fee.
Duck Donuts’ initial fee is $40,000, and by paying this fee, investors get the right to use the franchisor’s trademarks, recipes, and know-how. Also, every new franchisee gets help from Duck Donuts development agents in all aspects of the business. The support goes from choosing the store’s location, arranging the store, and training for managers and employees.
Most of the costs of starting this franchise are related to store arranging and buying working equipment. If you have your own place where a franchise can be opened, that can reduce the cost to the minimum. But, if you start this business from scratch, you can expect a cost of about $ 500,000.
Some of the requirements that every new Duck Donuts franchisee must meet are net worth of $500,000 and $150,000 in savings, mutual funds, or stocks. These $150,000 are not negotiable, and this requirement every new investor must meet.
All veterans who want to start the Duck Donuts franchise will get a 20% discount on the initial fee cost. So this franchise can be a good option for all veterans that consider starting a business venture in the donuts market.
Duck Donuts franchise costs:
- Estimated total investment: $351,164 – $541,448
- Initial franchise fee: $40,000 – Veterans and multi-unit owners get discount
Duck Donuts Franchise Ongoing Fees
Duck Donuts franchise Royalty fee is 5%, and the Marketing fee is 2%. Together, these two fees are 7%, which means that 7% of the gross revenue franchisee has to pay to the franchisor. These fees are one of the lowest on the market, which is very important in the long run.
In return for fees, the franchisor will help the new franchisees with getting business loans, lease negotiations and give them support in every aspect of the business. This will be especially beneficial for new entrepreneurs who are starting their first business venture.
Franchise fees are not uncommon in this type of business. Every entrepreneur who knows how franchising works know that usually, ongoing franchise fee goes in the range of 10+% of the gross revenue.
This franchise has one of the lowest ongoing fees in the market, and because of that, more profit stays in the pocket of the franchisee at the end of the month.
These ongoing fees must be paid, and every franchisee agrees to pay them by signing the franchise agreement. Duck Donuts franchise agreement lasts 10 years and can be renewed very easily after that. So, the investor can plan his business future in the long run with the same franchisor.
The franchise initial fee is a one-time cost, and after that franchisee is only obligated to pay the Royalty and Marketing fee. The cost of these fees will depend on gross revenue for that month. But this fee is always 7% of the gross income of the franchise unit.
Duck Donuts Franchise Profit
The profitability of Duck Donuts will primarily depend on shop location, that is, how much is a fluctuation of people near the shop. Also, to determine profit, ongoing fees, renting space costs, worker’s costs and ingredients costs must be calculated.
According to ProfitableVenture, the average cost of making one donut is $0,36, and the selling price is $0,99. This means that donuts are very profitable products. In addition, Dunkin Donuts offers cold and hot beverages whose production cost is very low, so there is a lot of space for making a profit.
This franchise offers different services and products than the competition. They were incredibly creative during lockdowns when they managed to find a way to make more profit in line with the situation.
When their traffic started to decrease in the lockdown, the owners reacted very quickly, and they began to offer a unique set for decorating donuts. This makes it possible that every customer in their home can decorate donuts according to their wish; this was especially appealing to kids.
In addition, Duck Donuts launched the first donuts selling mobile app on the Apple Store and Google Store platform. This app is designed to work with pre-existing technology that they have in their franchises. With this app, customers can pre-order, pay for the product and skip the waiting line in the store.
Currently, more than 100,000 people have downloaded their apps, and that number will only grow in the future. This franchise uses online technology to make more profit for their franchisee, and they were the first donut company that implemented this way of selling.
Duck Donuts History
It all started with a Russ Di Gillio vacation whose family often spent their free time in Duck, North Carolina. At one point, the family wanted to buy and treat themselves with warm donuts but, there were no donuts shops in the area.
Russ and his family in 2007 decided to open their first shop in Duck, NC., and in 2011, their expansion began. The owner could no longer resist investors who wanted to start a shop similar to his.
2013 is opened the first Duck Donuts franchise in Virginia, and today they have over 100 franchises across the whole U.S and abroad. They have a plan to expand in every U.S state in the next few years.
This franchise began its international expansion in Dubai, Saudi Arabia, and Puerto Rico. Today they are looking for interested franchisees in almost every country in the world.
The Duck franchise concept is based on unique donuts that have all kinds of shapes and tastes. Customers are watching the process of making, and they can take part in creating their donuts.
Duck offers all possible combinations of donuts: various coatings, toppings, sprinkles. They also have on the menu unique donuts with maple glaze + bacon.
This unique approach to the customers sets out this company apart from the competition. And because of that, every donuts fan will be very interested in owning the Duck Donuts franchise.
In the United States, there are many donuts companies, and Duck Donuts is one of the top franchise opportunities in this type of business. The cost of this franchise is relatively low, and profit can be good if the investor finds a suitable selling place for this kind of product.
Excellent support from this franchisor enables even inexperienced entrepreneurs to start a profitable business. So regardless of your business background, if you have the desire, you can become the owner of this franchise.
Also, Duck Donuts want to be part of the community, so they often donate to nonprofit organizations. This is very important because, in this way, they create a connection with the people, which is the most important thing.