Shipley Do-Nuts Franchise Costs, Fees & FDD

Year Business Began: 1936

Franchising Since: 1987

Headquarters: Houston, Texas

Estimated Number of Units: 390

Franchise Description: Shipley Franchise Company LLC is the franchisor. A Shipley Do-Nuts franchisee will operate a retail shop specializing in the offer and sale of donuts, kolaches, coffee and specialty drinks prepared on-site and related products and services.
Training Overview: The initial training program must be completed by the operating principal to the franchisor’s satisfaction no later than three months prior to the scheduled opening of the shop. The franchisor reserves the right to also require one or more of the franchise managers to also attend the initial training program. The initial training program is comprised of two components, the “Owner Training” (which must be completed by the operating principal) and the “Manager Training” (which must be completing by the operating principal and, if required, the shop managers). The Owner Training will last for approximately one to two days, and the Manager Training will last for approximately six weeks. The initial training program will take place at any location the franchisor designates (which may include a current operating Shipley Do-Nuts shop, the franchisor’s headquarters or elsewhere). For the first shop, the franchisor will also provide, at no additional expense to the franchisee, one or more training representatives for a period of between 5 and 15 days of on-site opening training during the shop's opening. The franchisor may from time to time develop additional training programs which the franchisee (if an individual), the operating principal and/or other staff or personnel designated must attend and successfully complete. The franchisor reserves the right to designate that attendance at any franchisee meeting is mandatory for the franchisee, the shop manager, assistant shop managers and/or other shop personnel.

Territory Granted: Franchisees may establish only one shop at a location which the franchisee selects and the franchisor approves. The franchisor will grant franchisees a protected territory equal to a one-mile radius around the shop location within which neither the franchisor nor any affiliate will operate or grant a franchise for a shop of the type franchised to the franchisee under the Franchise Agreement during the term thereof, except as provided by the franchisor.

Obligations and Restrictions: Franchisees must personally supervise the operation of the shop, unless the franchisor permits otherwise in writing, and devote the necessary time and best efforts for the proper and effective operation of the shop. The shop must have an “operating principal.” The operating principal must have complete decision making authority with regard to the shop and must have the authority to act on the franchisee’s behalf in all respects. If franchisees are an individual, then they must serve as operating principal. If the franchisee is a partnership comprised of multiple individuals and/or a business entity, then the franchisee must designate an individual who owns an interest in the franchise and shop to serve as serve as operating principal. Franchisees must at all times offer and sell all products, services and programs which the franchisor designates part of the system, unless franchisees are prohibited by local law or regulation from selling a product, service or program or the franchisor has granted them our advance written approval to exclude a product, service or program.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Two consecutive renewal terms of five years each are available if franchisees comply with certain conditions to renewal.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligation.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$40,000	$40,000
Travel and Living Expenses While Training	$1,000	$10,000
Lease Deposits / Payments	$8,400	$20,000
Equipment, Furnishings, Technology and Computer Systems, including POS System	$133,952	$230,532
Leasehold Improvements	$218,887	$510,692
Signage	$15,329	$64,920
Opening Inventory – Food Items	$20,000	$30,000
Opening Inventory – Non-Food Items	$1,500	$3,000
Grand Opening Advertising Campaign	$20,000	$20,000
Utility and Other Security Deposits	$2,500	$5,500
Insurance	$1,000	$2,000
Architectural / Legal	$14,893	$44,802
Business Licenses / Permits	$1,000	$3,500
Additional Funds / Working Capital - 3 Months	$25,000	$40,000
ESTIMATED TOTAL	$503,461	$1,024,946

 
Other Fees

Type of Fee	Amount
Royalty Fee	5% of previous week's gross sales.
System Brand Fund Fee	1% of previous week's gross sales.
Regional Advertising Cooperative Contribution	1% of gross sales.
Required Minimum Expenditure for Local Advertising and Promotion	2% of gross sales.
Technology Fee	Currently, $0.
Insufficient Funds Fee	$50 per occurrence, subject to state law.
Late Payment Fee	20% on overdue amounts, subject to state law.
Interest	1.5% per month, or the maximum interest rate permitted by law.
Non-Compliance Fee	$500 per instance of noncompliance, plus $500 for each week that such noncompliance remains uncured.
Relocation Fee	$10,000 plus the franchisor’s actual reasonable costs.
Delayed Opening Fee	$500 per week for each week the shop's opening date is delayed.
Financial Statement / Tax Return Late Fee	$50 per month.
Management Fee	Greater of (i) two times the compensation paid to the individual(s) assigned by the franchisor to operate the shop, or (ii) 10% of the shop's weekly gross sales, plus reimbursement of the franchisor’s actual expenses to manage and operate the shop.
Advertising and Promotional Materials Handling Fee	10% of actual cost.
Franchisor Products and Services	Varies.
Audit Fee	Full cost of audit.
Renewal Fee	25% of the then-current initial franchise fee.
Transfer Fee	50% of the then-current initial franchise fee.
Training Fee	$2,000 per trainee.
Additional On-Site Training Fee	$2,000 per training representative per week, plus reimbursement for the franchisor’s actual expenses incurred in connection with additional on-site training.
Ongoing Training Fee	$2,000 per week per trainee.
Annual Franchisee Meeting Fee	$1,500 per attendee.
Insurance / Trade Account Fees	Reimbursement of the franchisor’s actual costs.
Brand Payment Programs	The then-current fees and costs charged by third-party vendors.
Loyalty Program	The then-current cost, currently: $110 per month per shop.
Cost of Enforcement or Defense	Reimbursement of the franchisor’s actual costs.
Liquidated Damages	Royalties for remainder of term, based on prior 12 months of royalties paid or owed.

The above information has been compiled from the FDD of Shipley Do-Nuts. Year of FDD: 2025.
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