Dunn Brothers Coffee Franchise Costs, Fees & FDD

Year Business Began: 1987

Franchising Since: 1994

Headquarters: Plano, Texas

Estimated Number of Units: 50

Franchise Description: Dunn Bros Coffee Franchising, LLC is the franchisor. The franchise is the right to develop a Dunn Brothers Coffee branded shop that sells coffee that is roasted daily using state-of-the-art micro-roasting techniques and fresh bakery items such as breads, pastries, breakfast and lunch sandwiches, wraps, desserts, other similar food and beverages and related products that franchisor may designate from time to time.
Training Overview: Franchisees (or the managing owner, if a group) and their designated manager (if any) must attend and complete to the franchisor’s satisfaction the initial training program before they open their shop for business. The initial training program involves approximately 10 to 15 days of operational training at the franchisor’s corporate support center (currently located in Plano, Texas) or at a location determined by the franchisor. Franchisees must ensure that their employees receive adequate training.

Territory Granted: The franchisor will grant franchisees the right to operate a Dunn Brothers Coffee shop at an authorized location only. Franchisees will receive a designated territory, the size of which will depend on the location of the shop, population, market demographics, growth trends, and other economic factors and trade dynamics. Franchisees will not receive an exclusive territory. However, as long as franchisees are not in default under the Franchise Agreement, neither the franchisor nor its affiliates will operate or grant to third parties the right to operate a shop in the territory.

Obligations and Restrictions: If franchisees are not a natural person, each of the owners that has direct or indirect ownership of at least 10% of the ownership interests in the franchise (each a “principal owner”), must sign a guaranty of obligations under the Franchise Agreement. Franchisees, or if they are not a natural person, one of the designated and approved principal owners will be the “managing owner.” If the managing owner is not involved in the supervision of the day-to-day operations of the shop, franchisees must also designate a person, who may, but need not, be the managing owner or one of the other owners, to serve as the “designated manager.” The franchisor requires franchisees to offer and sell only those products that have been approved for sale at or from the shop. The franchisor requires franchisees to participate in any online ordering, third-party delivery, and/or catering programs it requires and specify in writing. The franchisor may set certain minimum standards for opening hours of the shop, and the franchisor may also fix or provide guidance on maximum and minimum prices franchisees may charge and advertise in connection with the operation of the shop. In addition, franchisees may only sell coffee beverages and coffee beans which have been prepared in compliance with the franchisor’s current standards.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the shop opens. If franchisees are in substantial compliance with the Franchise Agreement, they may extend the term for two consecutive five-year terms.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s loans, lease, or other obligations. The franchisor does not receive payments or other consideration for the placement of financing.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee (including training and support fees and grand opening marketing)	$40,000	$40,000
Architecture Design, Approval and Permit Fees	$5,000	$26,000
Leasehold Improvements	$187,500	$300,200
Sewer and Water Access Charge	$0	$10,000
Prepaid Rent, Security Deposit, Utility Deposits, Business Licenses and Attorney Fees	$8,700	$16,000
Furniture, Fixtures and Equipment	$150,500	$292,560
Roaster and Associated Leasehold Improvements for Venting	$27,100	$27,100
Travel Expenses While Training	$500	$4,400
Opening Inventory	$9,000	$12,000
Grand Opening Expenses	$10,000	$10,000
Insurance Premiums	$2,800	$6,700
Additional Funds - 3 Months	$14,500	$54,000
ESTIMATED TOTAL	$455,600	$798,960

Other Fees

Type of Fee	Amount
Continuing License Fee	5% of gross sales.
National Marketing Fund Contribution	Currently, 3% of gross sales.
Local Marketing Expenditure	1% of gross sales.
Local Advertising Cooperative	Currently not charged. Will vary.
Successor Franchise Fee	25% of the then-current initial franchise fee for a new shop. The successor franchise fee will increase by $5,000 if franchisees and their owners do not sign all applicable documents and pay the successor franchise fee before expiration of the-then current Franchise Agreement.
Transfer Fee	50% of the then-current or last initial franchise fee for a new shop.
Additional/Replacement Training	Currently, $500 per day per trainer.
Technology Fee	Currently, $300 to $540 per month.
Reimbursement of Vendor Payments	The actual costs, plus an administrative fee which will not exceed 10% of the amount the franchisor pays on the franchisee’s behalf.
Audit and Recordkeeping Costs	Estimated to be $5,000 plus late fees.
Management Fee	10% of gross sales plus costs and expenses.
Interest Expenses	18% per year or the maximum rate permitted under applicable law.
Late Fee	$100 per occurrence.
Insurance	Reimbursements of the franchisor’s costs plus an administrative fee. Payable only if the franchisee fails to obtain or maintain insurance, and the franchisor exercises its option to obtain or reinstate it for the franchisee.
Indemnification	The franchisor’s actual costs.
Alternative Supplier Testing Fee	Reimbursement of the franchisor’s costs plus an administrative fee of $500 per request.
Franchise Conference Fee	Currently, $100 per meeting.
Lost Revenue Damages	Will vary under circumstances.
Costs and Attorneys’ Fees	Actual costs.
Relocation Fee	$2,000
Non-Compliance Charge	If franchisees do not comply with their obligations under the Franchise Agreement, the continuing license fee will be increased to 6% of gross sales until the franchisor has determined that they have cured their deficiencies.

The above information has been compiled from the FDD of Dunn Brothers Coffee. Year of FDD: 2025.
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