Dunkin Donuts Franchise Cost, Earnings and Review

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Dunkin’ Donuts is another franchise we get
a lot of calls about. A lot of people think they want to buy a Dunkin’
– but is it a good investment? How much does a Dunkin’ Donuts Franchise Cost,
and how much can I make? Dunkin’ Donuts is another one of those Iconic
brands that often entices people just by virtue of the huge name, to think it is the best
franchise option out there. Because surely this 12,000 location strong
brand I see everywhere is the biggest moneymaker out there. Let’s take a look. We just got access to the brand new 2018 FDD
for Dunkin’ so all the numbers for today are are as up to date as you can get. The cost to open a Freestanding location ranges
between $245,200 to $1,717,103 – and none of these numbers include real estate costs. A shopping center storefront is $228,621 to
$1,202,880. Setting up a Dunkin in a Gas or Convenience
store location will range between $108,904 to $741,100 and that price will vary depending
on whether the baked goods are actually made on site. There is also an APOD or Alternative Points
of Distribution model which ranges between $97,500 to $542,805. These are non traditional locations like transportation
terminals, casinos, colleges, military bases etc. Your ongoing fees will include what Dunkin’
Donuts calls their Continuing Franchise Fee 5.9% of Gross sales, and a continuing Advertising
fee of 5% of Gross, Now Dunkin’ Donuts was in the news not too
long ago with allegations of racism, and generally not being a nice corporation towards franchisees
overall. But is that true? This New York Daily News article article claims
a lady who purchased her Dunkin’ franchise with a partner was sued by Dunkin Donuts simply
for offering a 15% ownership to a manager. “They told Asam and me that not only would
they force us to sell our stores within 30 days – offering us buyouts for half of what
the stores were worth – we’d have to pay a $100,000 “penalty fee.” The franchisee goes on to say “After talking
to dozens of franchise owners just like us, we learned that this was more than an unusual
litigation binge. This was a corporate strategy. In order to compete with Starbucks, Dunkin’
Donuts has announced a plan to open 15,000 stores by 2016. The NY daily News article goes on to say:
Dunkin’ Donuts has sued other franchise owners 154 times since 2006, this was written in
2008. Over the same stretch of time, McDonald’s
was involved in five lawsuits. And Subway, a company that has four times
the number of locations as Dunkin’ Donuts, sued its franchises 12 times. Now we can’t be certain of the validity of
this specific claim, and the Dunkin’ Donuts 2018 FDD does not reflect the number of lawsuits
suggested in that article however we were able to access the 2008 FDD and sure enough
there were dozens of lawsuits listed. There is a sharp contrast between the 2008
and 2018 FDD’s with many fewer lawsuits. We can only speculate why this may be the
case, maybe Dunkin’ realized that these lawsuits can really hurt a brand long term. Look at Tim Hortons. Now we always suggest that prospective franchisees
do contact a large number of existing franchisees, and their names will be included in your FDD,
as well as speaking to those who left the system. Also pay close attention to the Litigation
section of the FDD, which is Item 3. So let’s explore more recent litigation. In Quebec 32 Dunkin Donuts franchisees sued
Dunkin for deterioration of brand image, negligent management, and basically not keeping up with
the competition. They won and were awarded $16.4 million which
was reduced on appeal to $10.9 million . Most of you probably heard about the discrimination
lawsuit alleging Dunkin’ Donuts would not allow an Indian woman to open a third franchise. That one was dismissed, and one other lawsuit
alleging racism seems to be ongoing as of the date of this video. There are several lawsuits of Dunkin’ suing
its own franchisees but certainly nowhere near the level we saw in past years. There are also some in my opinion, rather
funny class action lawsuits relating to Dunkin ‘ Donuts having allegedly engaged in deceptive
advertising practices by trying to convince consumers that it’s products contain real
blueberries or Maple Ingredients. So they call the stuff blueberries and maple,
guess what – not a single blueberry or maple supposedly in it so Dunkin’ is getting sued
for fraud, unfair competition, deceptive advertising and a bunch of other stuff. A similar lawsuit against their Angus steak
that is supposedly just a beef patty, Dunkin’ denies these allegations and will vigorously
defend againts the lawsuits. Next we will see someone suing because the
bear claw was not actually a bear claw. So the question everyone wants to know – how
much can I make with a Dunkin’ Donuts franchise? Let’s look at the FDD. So Dunkin’ actually has a really nice and
clean Item 19 which breaks down stores by regions, as well as by type of store. We don’t have enough time to look at every
category so we’ll just explore averages. For example a freestanding non drive through
in the Midwest will see about $894,916 in average sales, a drive through restaurant
in the Northeast will see about $1,400,932. Shopping center storefront types are a bit
lower between $835,906 and just over a million ($1,068,982), and gas and convenience sites
between about $620,159 and $932,175. Again I’m not doing justice to the numbers
or regional breakdown and encourage anyone who is interested in a Dunkin’ Donuts franchise
to check the FDD themselves to get a better handle on their specific region and selected
store type. Now a million dollars may sound like a lot
of money but how does that compare to other franchises? Well if we consult the QSR50, which is a great
list comparing the top 50 QSR franchises and Ill post that link down below, we see Dunkin’
Donuts is 13 spots from the bottom sorted by annual revenue. Now the 2018 QSR50 is not yet available so
we expect these numbers will change. But from a revenue standpoint we see Chick-Fil-A
way at the top at over 4.4 million in revenue per store, and Baskin Robbins way at the bottom
with only $237,000 per store. Remember from that million comes your royalties,
salaries, rent, taxes, and lots of other expenses. So from a purely revenue standpoint Dunkin’
Donuts is not near the top comparitively. Growth is strong almost 1000 solo locations
opened up in the past 3 years and many more in the other categories. So is Dunkin Donuts franchise a good investment? Depending on your situation and most importantly
your location, it could be. We suggest investors always look at several
franchises to compare all your options, maybe even those outside of food franchises. Don’t forget to like and subscribe and if
you need help finding or researching a franchise give the expertys a call at franchise city. http://www.nydailynews.com/new-york/brooklyn/dunkin-donuts-business-practices-lots-holes-article-1.278131 http://www.dunkinfranchising.com/franchisee/en.html https://www.dunkindonuts.com/en http://www.unhappyfranchisee.com/category/franchisor/dunkin-donuts-franchisor/ https://www.qsrmagazine.com/content/qsr50-2017-top-50-chart?sort=2016_us_average_sales_per_unit_thousands&dir=asc

69 comments

  1. how we can buy MC. D franchisee in india… can you please make a video on it… and will be beneficial for us or not

  2. So, you "own' somthing [a franchise] but you CANNOT sell a share of it to a key employee? Are they nuts? If your manager has skin in the game he's going to do a more consciencious, effective job!

  3. They sell today in 2018 all frozen , machine made donuts !!!!! All at a very expensive price !!! For a little more, you can go to a real bakery , for fresh real made donuts !!!!!!!!!!!!!!!!!!!

  4. If two parties sign a contract to set up a joint business, neither of them is obliged to consent to the other one bringing another party of their choosing into this relationship ("Hi, meet Tony Soprano, your new 15% business partner.)

  5. You are clearly impressive and knowledgeable. However, you hedged in assessing whether or not to get a Dunkin Doughnuts franchise but I think between the lines you suggest to look elsewhere.

  6. I wouldn’t eat a DD now if they PAID me. Horrific, ugly, crap donuts. Best donuts I’ve ever eaten was at ‘Mister Donuts’ in Japan. Each donut looked like it was created by a pastry chef. Blows away DD by a LUNAR mile at every level.

  7. Their donuts are terrible tasting.

    One time I was there, ate a couple of donuts, and the manager (I think) asked me how they were, I said they are ok not my favorite they dont taste fresh but stale. He got all riled up and went on a lecture and rant about how dunkins donuts are all baked not deep fried like krispy, and that is why they are better and all that. I still thought they tasted not fresh but stale after that lecture.

  8. In central FL, DD has increased a lot. Most are small strip mall & limited tiny shops. Some combine with B&R ice cream. The breakfast menu was cut down a lot 6-8mo ago. ? I liked the maple coffee. The sweet ice tea is very good too. I rarely get donuts without a printed coupons.

  9. I love Dunkin Donuts. I like them so much that if I buy a dozen donuts I eat a dozen donuts. And that is the downfall. Because they are so good I intentionally avoid them. Most people who are looking for healthy alternatives won't buy donuts. Just something to think about if you are trying to decide if you want to purchase a Dunkin Donuts franchise.

  10. The financial industry has basically made every part of every business so horribly and tightly monitored, that no matter HOW good or popular your place is, or your franchise, you'll never get a PENNY more than you're supposed to, It's disgusting.
    The only people who make pennies above their costs is owners and shareholders, Thats what ALL business is based around. People who don't do anything.
    All the people in the chain who're making, designing, selling, exchanging, pushing, pulling.. doing ALL of the work that brings in all that money, they're making 5% profit, maybe 10% if they're very good. It's the people who do less work or no work, who make the real profits.
    Don't you ever find it funny, that you can have a VERY popular 24 hour McDonalds with a drive through, that is HOPPING busy all day and night every day of the year, never empty. The place is running like clockwork, you can have thousands of Customers per Day, and you can have 30 people working at all times. And even if the place takes in 50 million dollaors over the counter in 1 years? Your MAXIMUM earnings after tax will still only be around 400k.
    Yup, 400k, i'd stress to think of a single McDonalds franchise owner out there who is making more money than that from any store.
    Where does all of this profit go? "It's not profit, the other 45.6 million goes towards cost and upkeep and advertisment and food / supplies". Bull.
    McDonalds just so it's 2 billionth Big Mac recently, and i guarantee you the owner of that store has never made a cent over 400k. All of that money goes, into the kitty,
    for the REAL McDonalds to take from. You have share holders making 10's of millions per year. ALL of that 50 million you made, maybe 5 million goes back into the store and advertizing. teh other 30 million? Into Pockets.

  11. I watched a video from franchise city that said they were thinking of expanding their portfolio into franchises. Why? What is the benefit? Then taking royalty and expensive startup. How does this benefit at all?

  12. i went to dunkin once coming from a lifetime of tim hortons. i paid over 2 dollars for a coffee (2.50 CAD!) and it may as well have been water and my donut was clearly not fresh

  13. I don't know much about running a business, but just by pure observation, Dunkin Donuts is a nightmare business to operate. First, there's the high fees that owners MUST pay to the franchise corp before a franchisee even pay himself and staff. Secondly, the high rent cost because you MUST be in a well-trafficked location/area, otherwise you will close permanently in less than a year. Thirdly, the preparation time required to make the products you will sell that day hours before you even open the doors to customers means you're already money losing money on staff wages and I bet that the profit margins for the owners are very small. Obviously, there's more negatives and that these things apply to almost any type of franchise, but DD seems to be one of the worst investment to make. Not worth the stress.

  14. How do we look at store revinues online? I am doing market reserch and want to know how much buisiness the local krispy creme does.

  15. The book "Dunk'd" really gives a look behind the curtain here. I narrowly avoided getting pulled into a 3 store deal commitment with them where I was required to have a Baskin Robbins and a Togos sandwich store in each as well. Guess which multi stores no longer exist?

  16. Most of the Dunkin Donuts in Boston are owned by a single company run by a board of local lawyers. They invested in building the company in the early '90s when they practically had no real competitive threats. I can't even imagine the amount of money they made before starbucks was a thing.

  17. The problem with a franchise is you buying a job. A true entrepreneur build his own brand. An have the freedom to call the shots.

  18. I appreciate that you showed the gross income figures but it will be much more helpful to show the net income figures. As some franchises micros more but their bottom line might actually be less

  19. Here in nyc, it seems like all Dunkin donuts are owned by Indians. I'm talking all stores. Same with Subway and Wendy's. Indians love franchise stores.

  20. They are such rats for suing an owner. Just avoid. The franchise fee and royalties are way too high a price to pay. I once considered but changed my mind in the nick of time.

  21. After an uncharacteristic night of drinking, I wandered over to the Dunkin Donuts across the street from my apartment. While selecting what donuts I wanted, I noticed a cockroach walking on the donuts. Then I saw another cockroach on the shelving bars, then another! "Jesus Christ", I loudly exclaimed, "You've got roaches all over this place!" I left, itching all the way home. I should note that this DD (part of a multi-store franchise operated by Asians) was in a good residential neighborhood. It did not bake its doughnuts on site, but at a central bakery several miles away. I have never gone back to that DD, and usually avoid Dunkin altogether.

  22. How is this content free? These videos are ridiculously useful. I get that they're advertising for your business, but there are consultants who charge 200 an hour for less information per minute than your videos!

  23. There is literally one in a gas station and one as a stand alone right next to each other. I'm pretty sure it's got to be a fucking gold mine

  24. I haven't had a donut from Dunkin Donuts in over 3 years. I have to say that the multigrain bagel they sell is delicious. I have tried bagels from New York Delis and the multigrain bagel that Dunkin sells is delicious. In terms of their coffee I would count it as average, I prefer ice coffee to hot coffee. Overally I think Dunkin is a good investment. The town I live in has three Dunkin Donuts and I think it is safe to say that the New England area is one of the best spots to open a Dunkin Donuts. I would consider investing in a Dunkin Franchise though I still need a lot more capital.

  25. I have never been to a dunkin donuts that is efficient or has happy employees. and even new or completely renovated stores seem stuck in 1980.

  26. There are too many DD stores in my area. I have a store about 5 mins from my house and There are four other stores less than a mile of my house. It's like every 10 to 15 mins you pass one. On the main road near me, there are three stores in less than a three-mile drive. Before you even think about opening one, take a drive or use google map to see how bad it is. Now my local store "less than 5 miles near me" no longer makes donuts in store and is closed from 12am to 5 am. they get donuts once a day at 5 am and when they are out, they don't get any more :/ We went two weeks ago to DD at 1130am and all they had was glazed donuts and some odd ones that cost about 60 cent more than a normal donut. they do have an ice cream area but really who goes to DD for ice cream? lol and DD is always hiring workers and managers, it has a huge turn over rate

  27. In the NYC area. All or at least most of the Dunkin Donuts stores are owned by far eastern people. Indian, Bangladesh, Pakistan. I hear that the US goverment gives them money to come to the US and when they get citisenship. They are given the money to open stores like Dunkin Donuts. And other franchises.

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