How Much Does It Cost to Start a Dunkin’ Donuts Franchise?
Once strictly a New England favorite for morning coffee, breakfast sandwiches, bagels and, of course, doughnuts, Dunkin’ Donuts is rapidly expanding across the United States.
Dunkin’ Donuts won the No. 8 spot on Entrepreneur’s 2016 Franchise 500, a list of the country’s best franchises, right behind giants like Subway, McDonald’s and 7-Eleven. According to a Forbes report, the company grew by 291 stores in 2012, by 371 in 2013, and by 405 in 2014. It plans to maintain that growth rate of more than 5 percent in the coming years.
Entrepreneurs are attracted to Dunkin’ Donuts because it is a high-profit margin business. Coffee, in particular, costs vary little to buy compared to what franchise owners can charge. However, the initial investment can be high. Here’s what you can expect to pay, according to Entrepreneur.
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Upfront expenses and requirements
- Total initial investment: $217,300-$1,637,700
- Net worth requirement: $250,000
- Liquid assets (cash) requirement: $125,000
- Initial franchise fee: $40,000-$90,000
- Royalties: 5.9% of monthly sales
- Advertising: 2-6% of monthly sales
Veterans are offered up to 20 percent off the franchise fee for the first five traditional, freestanding restaurants they open.
Interested franchisees must complete an application and then submit a business plan. Next a financial review will take place. Prior food service, retail or multi-unit experience is preferred, as is a clear understanding of the real estate development process.
You, as the franchisee, are responsible for site selection and development, but the company has a list of preferred site criteria. The company’s real estate and construction experts can assist in the process, if needed. In certain geographic locations, franchisees are required to develop more than one Dunkin’ Donuts location.
Dunkin’ Donuts does not provide financing, but the company has developed relationships with lenders to help you find financing that is competitive, simple and quick. Possible loan types include business acquisition loans, equipment loans and leases, construction loans and real estate loans.
Prior to opening a restaurant, all franchisees must complete a three-day franchise business course in the Boston area. Following that there is an initial training program that includes classroom time, which takes place either in Braintree, Massachusetts or Orlando, Florida.