Dunkin’ Donuts, now known simply as Dunkin’, was founded in 1950 by William Rosenberg in Quincy, Massachusetts. Initially named “Open Kettle,” the restaurant was renamed “Dunkin’ Donuts” after a brainstorming session with executives. The first franchise opened in 1955, and by 1965, the number of locations had grown to over 100. Today, Dunkin’ has more than 12,600 restaurants in 46 countries, making it one of the world’s leading coffee and baked goods chains.

Headquartered in Canton, Massachusetts, Dunkin’ is renowned for its wide variety of donuts, bagels, breakfast sandwiches, and an extensive range of coffee and beverage options. It differentiates itself by offering a robust rewards program, Dunkin’ Rewards, which allows customers to earn points on every purchase, enhancing customer loyalty and engagement.

In recent years, Dunkin’ has focused on transforming into a premier beverage-led, on-the-go brand. This includes a simplified menu, a greater emphasis on beverages like Cold Brew Coffee and Nitro Coffee, and the introduction of unique products such as Donut Fries. The company has also innovated with its next-generation store design, which features elements like a tap system for cold beverages and mobile order drive-thru lanes, catering to the needs of today’s fast-paced consumers.

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Initial investment

Here’s what you can expect to spend to start a Dunkin' Donuts franchise.

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Here are the main ongoing fees the franchisor will ask you to pay going forward to run the franchise.

Initial Franchise Fee

The initial franchise fee for a Dunkin’ Donuts franchise varies depending on the Designated Market Area (DMA). It ranges from $40,000 to $90,000 for a 20-year term.

Royalty Fee

The royalty fee is a continuing fee, typically based on a percentage of the franchisee’s gross sales. It is generally 5.9% of gross sales, due on or before Thursday of each week for the seven-day sales reporting period ending at the close of business on Saturday.

Marketing/Advertising Fee

The marketing/advertising fee, also known as the Continuing Advertising Fee (CAF), is 5.0% of total gross sales.

Technology Fee

The technology fee, referred to as the Restaurant Technology System cost, ranges from $12,000 to $75,000.

Transfer Fees

The transfer fee for a majority interest within the first three years is $12,500, or $20,000 if the restaurant is a combo restaurant, plus an amount based on the gross sales of the restaurant for the 12 months preceding the date of transfer.

Renewal Fees

Renewal fees vary by market and are based on the average annual rate for initial franchise fees in the relevant Development Area Type. For combo restaurants, an additional renewal fee of $10,000 is payable to an affiliate, Baskin-Robbins.

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Franchise pros and cons

The Pros:

• Quality support team: at your disposal, you will have a team of experienced and qualified professionals ready to help your franchise prosper (real estate professionals, field marketing managers, and operations managers). They provide new franchisees with site selection information, and marketing and management information to help them scale their sales.
• Recognized brand: Dunkin’ brand is well recognized in the US and worldwide. And with 98% brand recognition among consumers, the Dunkin’ brand is fast-moving. As a new franchisee, you have the advantage of selling to customers who understand your brand and what you offer. The better part is that Dunkin’, in a move to keep its brand strong, continues to market itself by partnering with global partners like Coca-Cola, JetBlue, and Saucony. 
• Plenty of available markets: Dunkin’ Donuts started its operations in the Northeast with much of its royal support found there. However, with time, it has grown to many restaurants found in the East. The brand continues to expand and plans to have over 1000 new stores in the US alone. 
• Proven business model: For more than 70 years now, the Dunkin’ brand has been in business. This gives them an upper hand in understanding the industry they operate in. They have mastered what works and how to operate for their business to succeed. 
• Franchisor’s solid financials: The franchisor Dunkin’ annual profits surpass the $1 billion mark, and the company is very profitable in its industry. What’s more is that new franchises can also break even in a relatively short period of time (see more on that later)

The Cons:

• A rigorous application process: As lucrative as the Dunkin’ Donuts franchise might look, applying and being accepted might not be easy. First, there are financial thresholds you must meet. To qualify as a DD franchise, you must have a net worth of $500,000 as well as meet the initial cost of $250,000
• Stiff competition: Another challenge that Dunkin’ franchise faces today is competition. With fast food demands, many popular multinationals occupy the space. To name a few: Starbucks, Tim Hortons, Krispy Kreme, etc. This can create pressure on prices and profits in the long run

How to open A dunkin’ donuts franchise

Opening a Dunkin' Donuts franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Dunkin' Donuts franchise.

1. Assess Your Financial Requirements

• Initial Franchise Fee: Be prepared to pay the initial franchise fee, which can range from $40,000 to $90,000, depending on the type of store and location.
• Net Worth and Liquid Assets: Ensure you meet the financial requirements, typically having a net worth of $500,000 and liquid assets of $250,000 per restaurant.

2. Research the Market and Location

• Market Analysis: Conduct a thorough market analysis to identify potential locations that will attract high customer traffic.
• Site Approval: The proposed site will need to be approved by Dunkin’ Donuts to ensure it aligns with their strategic expansion plans.

3. Submit Your Application

• Franchise Application: Complete and submit the franchise application form to Dunkin’ Donuts, providing detailed information about your financial status and business experience.
• Background Check: Expect to undergo a background check as part of the application process to verify your credentials and suitability as a franchisee.

4. Attend Training and Orientation

• Training Program: Participate in the comprehensive training program provided by Dunkin’ Donuts, covering all aspects of operating the franchise, including management, operations, and marketing.
• Support System: Utilize the support system offered by Dunkin’, which includes assistance with site selection, construction, marketing, and ongoing operations.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.