Dunkin’ Donuts one of the most well-known donut and coffee franchises in the world. The company currently maintains headquarters in Canton, Massachusetts, and was founded in 1950. Beyond basic donuts and coffee, Dunkin’ Donuts offers customers a variety of breakfast sandwiches, lunch options, Baskin-Robbins Ice Cream and fruit smoothies.
Dunkin’ Donuts, a subsidiary of the Dunkin’ Brands company, maintains 11,000 locations in the United States and around the world. The company boasts revenue of over $1 billion on an annual basis, largely due to brand recognition and clever advertising schemes.
There are numerous franchising opportunities available, but the largest concentration of them are in the southeastern portion of the United States.
Dunkin’ Donuts Franchise Costs and Expected Profit
The amount needed to open a Dunkin’ Donuts franchise varies based on location availability and number of units (stores) the company requires their owners to commit to. In most cases, the initial investment can range anywhere from $134,000 to $1.6 million. The number of units required will depend on a specific market need. The initial franchise fee can range between $40,000 and $90,000, which is included in the total initial investment cost.
When taking into consideration total investment needed, franchisees should think about the minimum location size, room for a drive through, parking, high visibility areas and 24 hour operations options. For units located within other businesses, the investment will be minimal when compared to renovating a free standing building.
Franchise owners can expect an annual net profit of anywhere between $60,000 and $100,000. Dunkin’ Donuts requires that franchisees pay 5 percent of their gross profits to the company.
Pros of Owning a Dunkin’ Donuts Franchise
One of the major benefits of owning a Dunkin’ Donuts franchise is name recognition and the ability to easily attract foot traffic. The company invests heavily in national advertising campaigns which lead directly to foot traffic for local stores.
The annual net profit is also an attractive pro for owners because it is comparably larger than other franchise opportunities.
The application process for a franchise can take an extensive amount of time. Dunkin’ Donuts states that the average time from signing a store development agreement to actually opening the store can take up to 15 months.
While Dunkin’ Donuts owns the Baskin-Robbins brand, not all stores qualify for this option. Franchise owners see this as a possible negative because it means they have less products to offer customers.