The International Franchise Professionals Group (IFPG) is dedicated to supporting entrepreneurs as they pursue investing in franchised businesses. With this goal in mind, this article is aimed towards husband and wife combinations that are looking for the time freedom and flexibility that comes with being a franchisee. Herein, we provide answers to frequently asked questions on Dunkin’s franchise opportunities in order to give readers the information they need to make a sound investment decision.
As the world’s largest coffee and bake shop and the second-largest restaurant chain, Dunkin’ has become an icon of American culture. With over 11,200 US locations, there is no shortage of demand for this beloved brand as customers flock to Dunkin’ for donuts, bagels, coffee and other signature desserts and beverages. Given the international appeal and reliability of the franchised business model, Dunkin’ presents an attractive opportunity for investors hoping to foster their own financial independence.
What is the Financial Commitment?
The estimated initial investment for a single Dunkin’ store ranges from $247,000 to $1,441,500. This includes the initial franchise fee ($40,000) and expenses such as real estate acquisition and renovation costs, signage, and computer, kitchen and other equipment purchases.
However, in addition to financial outlays, franchise owners should take into account the time investment required to successfully open and operate a Dunkin’ business. All franchisees must certify in the brand’s Baskin-Robbins University program, and managers may be asked to complete additional training.
What is the Return on Investment?
It typically takes 3 to 5 years for a single store location to return the initial investment. Factors such as location, nearby competition, and the franchisee’s commitment to successful store operations will ultimately determine the return on investment.
Currently, 97% of all Dunkin’ franchise owners remain profitable. To date, the average Dunkin’ franchise has reported net sales of $1.3M annually, yielding a store gross profit margin of 54%.
What Territories are Available?
As a global brand with locations on 5 continents, Dunkin’ offers franchise opportunities in diverse locations. As of 2021, there remains significant availability in highly lucrative markets such as New York, Pennsylvania, California, Texas, Florida and Illinois — all of which represent sizable business potential.
In any case, the geographic restrictions of specific franchised territories should be taken into consideration prior to signing a contract and investing in a store.
What are the Requirements to Open a Franchise?
According to the official Dunkin’ website, prospective franchisees must meet the following criteria in order to qualify:
- Applicant must be at least 18 years of age and a US citizen or resident alien
- Must have a minimum net worth of $250,000 and a minimum liquidity of $125,000
- Must have prior food and beverage or retail industry experience or have completed the Dunkin’ owner/operator course
- Must possess managerial ability and business acumen
- Must sign a franchised agreement, pay a franchised fee, and adhere to all terms and conditions
To learn more about other Dunkin’ franchise requirements, check out the Dunkin’ Brand Development Center.
What Support Will I Receive from Dunkin’?
Dunkin’s Franchise Program is designed to provide unrivaled franchised ownership experience. The program includes comprehensive support services for franchisees such as field operations, training, marketing, and store profitability coaching.
In addition to these traditional services, franchisees may also take advantage of attractive incentives such as remodeling support, property acquisition discounts, and competitively priced credits.
Are There Other Investment Considerations?
When investing in a Dunkin’ franchise, it is important to consider the associated costs. These include:
- Initial franchise fee: $40,000
- On-going royalty fees: 5.9% of monthly gross sales
- On-going advertising fees: 5.9% of monthly gross sales
- Management fees: 2.5% to 15.9% depending on how many stores are owned
- Initial training and certification costs: $700 per person
- Legal and accounting fees: $2,500 to $5,000
In addition to fees, franchisees should factor in the cost of labor, rent, utilities, and insurance.
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