Donut Franchise

The donut store franchise must be a tough survivor. It’s been with us for a century, and has survived health food fads, weight-loss movements, and the mortal enemy of donuts everywhere: Dr. Atkins and his no-carb diet. During the height of the Atkins fad, one expected to see rioters burning piles of donuts in the streets, such was the animosity directed at them. Yet the Atkins diet has lost its popularity, doctors have advised us that carbs aren’t all bad after all, and the donut stores are still here, as popular as ever.

If you don’t think that donuts are a good opportunity, consider that no American business meeting is complete without coffee and donuts. There’s no good reason it couldn’t have been tea and biscuits or beer and pretzels (well, OK, maybe not beer and pretzels), but coffee and donuts it is. Donut shops also typically break into other markets, such as bagels, muffins, and various other kinds of pastries. In fact, it’s probably best to just refer to them as bakeries and be done with it!

Every major brand of donut shop offers franchises, and some of them are 100% franchisee-owned. So we have Winchell’s, Krispy Kreme, Dunkin’ Donuts, LaMars, and many more. Donut shops are another type of business that’s well-suited to franchising. They take up relatively little space, and you do not always have to make your own donuts! Sometimes a central location bakes them overnight and delivers them fresh each morning. As you might realize, taking on a simple retail outlet is much less ambitious than taking on an outlet that bakes its own.

Outlets that bake their own goods have to have equipment set up. That’s going to be many hours of hard work around hot ovens and boiling deep-fat fryers, so brace yourself. You’ve probably seen the process that they go through to make donuts, as several stores, notably Krispy Kreme, make quite a show out of putting up a glass window to show the customers all of the donut machines. These are specialized pieces of equipment, and they have to be broken down and cleaned every night. Most of the baking is done at night too, so that it will all be ready by morning. It is for this reason that police have a reputation for hanging out at donut shops - because someone is there all night, and it’s natural for squad cars to drop by on the night shift.

Perhaps more than any other fast food profession, if you are watching your weight, you’re going to have a tough time in a donut shop. The aroma of fresh donuts is positively intoxicating. Be sure to have the fans turned on, and blow the steam out to the street! If you do it right, customers will find their way to the store blind-folded. You can definitely say that donuts sell themselves.

Donut franchises have start-up costs ranging from a low five to a low six figures, depending on the scale of the operation. The straight retailer establishment could fit in a closet, but the baking operation takes up as much space as a full-scale fast food restaurant. While the donut chef has to have special training, the rest of the staff can be any retail employee.

Of special note is that donut shops have been giving some kickback competition to coffee shops lately. Dunkin’ Donuts, in particular, has pushed back against the Starbucks front by loudly calling attention to the fact that they’ve been serving coffee for decades, and furthermore they don’t make you say “double wet mocha frissetti creme venti” or whatever that magic spell is to get one. When you ask for coffee, you get coffee. Look for more heated cross-competition between high-end coffee franchises and donut bakeries. And don’t be surprised to see a merger.