The Dunkin’ franchise brand is one of the most recognizable franchises around the world—from its signature donuts and coffee to its sponsorship programs and charitable efforts. Investing in any type of business can be an overwhelming and daunting process, and investing in a franchise such as Dunkin’ is no different. Here is an overview of the frequently asked questions that new or potential franchisees will have when considering investing in a Dunkin’ franchise.
1. What is the fee structure?
When you purchase a Dunkin’ franchise, there is an initial start-up fee of $40,000. You are also required to pay 5% of your total sales in royalty fees, as well as an additional $12,500 per year in marketing and advertising fees. For any non-traditional locations, such as kiosks and food trucks, the fees will differ and are discussed on a case-by-case basis.
2. Is there a required financial commitment?
Yes—in order to purchase a franchise, the franchisor will require a financial commitment from you. This typically includes an initial start-up fee, as well as an asset investment in the form of equipment, supplies, and other related costs. The franchisor will also require that you have a certain amount of working capital and/or collateral to cover the costs of business operations until your franchise begins to generate revenue.
3. What is the process for obtaining a franchise?
The franchise application process typically includes seven steps: initial inquiry, preliminary review, application and review, financial review, training and operations review, agreement signing, and post-agreement review. The time it takes to complete this process can vary depending on the franchisor and the type of franchise being purchased.
4. Are there any governing bodies or laws that must be adhered to when buying a franchise?
Yes—there are a variety of state and federal laws that must be observed when owning and operating a franchise in the United States. Additionally, most franchisors have a Code of Ethics and/or Rules and Regulations that franchisees must adhere to in order to remain a part of the franchise system.
5. Are there any geographic restrictions when purchasing a franchise?
Most franchisors restrict the geographic area in which you can purchase and operate a franchise. This helps to protect the overall brand and ensures that all franchisees are following the same rules and regulations.
6. Are there any special requirements or restrictions for investors from certain countries?
The U.S. Immigration and Customs Enforcement (ICE) requires that all foreign buyers of a franchise meet certain requirements in order to qualify for a business visa. Additionally, some franchisors have special requirements or restrictions for foreign investors, such as the need for a co-signer on the franchise agreement, additional fees and/or documentation, and/or restrictions on the type of business that a foreign investor can purchase.
7. Are there any ways to finance a franchise purchase?
Yes—while the franchisor typically does not provide financing for a franchise purchase, there are a variety of financing options available. These include conventional loan products, such as a Small Business Administration (SBA) loan, as well as other specialty lenders that are experienced in financing franchise purchases.