Dunkin' Donuts
Date Incorporation: 1954
Franchising Since: 1955
Headquarters: Canton, Massachusetts
Business Description: A Dunkin' Donuts Store sells coffee, donuts, bagels, muffins, compatible bakery products, sandwiches, as well as other food items and beverages compatible with the franchisor’s concept.
Franchise Offer: The franchise offered is for the right to operate a Restaurant, selling doughnuts, coffee, bagels, muffins, compatible bakery products, croissants, pizzas, snacks and other sandwiches and beverages that Dunkin’ Donuts approves. Dunkin’ Donuts encourages franchisees to develop a network of Restaurants within a targeted area or areas under the Store Development Program.
Financial Assistance: The franchisor facilitates through third party lenders, financing for qualified franchisees. The amount of financing and period of repayment varies by program, circumstances, and creditworthiness of the applicant.
Training and Assistance: Franchisees (one person) must attend a 3-day franchise business course prior to opening first Restaurant, which is conducted throughout the year in the Boston, Massachusetts area. The Dunkin’ Donuts Core Initial Training program takes a minimum of 24 days to complete the classroom/instructional phases. This does not including web-based training, in restaurant practice (typically in the franchisee’s home market) or travel time. Franchisees must attend and require their employees to attend further training as Dunkin’ Donuts may from time to time require.
Territory: The franchisee is not granted an exclusive territory. Dunkin’ Donuts has the absolute right to distribute (or license others to distribute) products identified by its trademarks (or by any other name or trademark) anywhere and in any form (e.g., in packaged form or otherwise), regardless of the proximity to the franchisee’s location, through any distribution methods or channels.
Term of Agreement and Renewal: The length of the franchise term is 20 years. The renewal term will be specified by the franchisor at a future date.
Obligations and Restrictions: The franchisee must devote continuous best efforts to the development, management and operation of the franchised business. This means devoting sufficient time and resources to ensure full and complete compliance with the franchisees obligations to the franchise. The franchise granted is limited to one location and all sales must be made from that location. Franchisees are not permitted to sell or distribute goods or services through the use of the Internet or other electronic communications.
Total Number of franchises Units: 10,100
Investment Tables:
Initial Investment
For Freestanding – Ground Up Store (Costs for Several Other Options Available in FDD)
| Type of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $40,000 | $80,000 |
| Building Costs | $182,000 | $582,000 |
| Site Development Costs | $40,000 | $400,000 |
| Additional Development Costs | $10,000 | $100,000 |
| Real Estate Costs | Varies | Varies |
| Equipment, Fixtures and Signs | $100,000 | $245,000 |
| Electronic Cash Register / Retail Technology System | $17,000 | $35,000 |
| Opening Inventory | $8,000 | $20,000 |
| Miscellaneous Opening Costs | $9,500 | $50,000 |
| Licenses, Permits, Fees and Deposits | $3,500 | $5,500 |
| Uniforms | $400 | $1,200 |
| Insurance | $4,500 | $15,000 |
| Travel and Living Expenses While Training | $2,000 | $25,000 |
| Marketing Start-Up Fee | $10,000 | $10,000 |
| Additional Funds for First 3 Months of Operation | $114,000 | $167,000 |
| Estimated Total (doesn't include real estate costs) | $688,250 | $1,329,850 |
Ongoing Fees
| Name of Fee | Amount |
|---|---|
| Continuing Franchise Fee | 5.9% of gross sales |
| Continuing Advertising Fee | 5.0% of total gross sales |
| Franchise Transfer Fee (for a majority interest in the first 3 years) | $6,000 or 5% of the Adjusted Sales Price, whichever is greater. |
| Franchise Transfer Fee (for a majority interest, after 3 years have elapsed) | An amount based upon the Gross Sales of the Store for the 12 months preceding the date of the contract of sale. |
| Franchise Transfer Fee (for less than a majority interest) | The Then-Current Document Preparation Fee, which is currently $1,000. |
| Franchise Transfer Fee (transfer to spouse or children) | The Then-Current Document Preparation Fee, which is currently $1,000. |
| Audit Costs | The franchisors cost to audit your gross sales reports, including legal and accounting fees. |
| Immigration Status Review Costs | The franchisors out-of-pocket costs to hire attorneys or others. |
| Interest, Late Fees, and Collection Costs | Then current late fee or dishonored check fee, and if applicable, interest on unpaid amount at 1.5% per month or highest rate allowed by law. |
| Indemnification | Varies |
| SDA Transfer Fee | $10,000 |
| SDA Transfer Fee (for a less than majority interest) | The Then-Current Document Preparation Fee, which is currently $1,000. |
| SDA Transfer Fee (transfer to spouse or children) | The Then-Current Document Preparation Fee, which is currently $1,000. |
| Loan Guarantee Fee | 1% of the loan amount |
| Document Preparation Fee | The Then-Current Document Preparation Fee, which is currently $1,000 |
| Costs for tests used to approve additional supplier(s) | The franchisors out of pocket and internal costs allocated to this activity, typically $1,000 to $10,000 depending on the complexity of the testing. |
Date of FDD: 2011
The above information has been compiled from the FDD of Dunkin’ Donuts.
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