How to Open a Dunkin' Donuts Franchise

Preparing to Open a Dunkin’ Donuts Franchise

Ensure you have adequate capitalization. In order to open a Dunkin’ Donuts franchise, you must have a net worth of $500,000 and at least $250,000 in liquid assets. Having the necessary capital available is essential for applying to become a Dunkin’ Donuts franchise owner. The requirements for international franchising are slightly different, requiring at least $1,500,000 in liquid assets and $3,000,000 in minimum net worth as well as the intention and capital required to develop at least 20 restaurants.

Appreciate the investment required for a franchise. While you will be required to pay an initial franchising fee that ranges from $40,000 to $90,000 (depending on the type of unit you are looking to franchise), the costs will not stop there. You will also need to consider building and real estate costs, the cost of equipment and signs, the costs of licenses and permits, the cost of uniforms, the cost of insurance, etc. Expect to spend between $134,600 and $1,611,100 as your initial investment for a new restaurant. This does not include real estate costs.

Evaluate your prior experience and strengths. Dunkin’ Donuts looks for candidates for franchising that have prior restaurant management or food service operations experience. In addition, they look for candidates that demonstrate the ability to recruit, train, maintain, and motivate a high-performing team as well as experience managing profit and loss operations. Finally, they also want applicants who have an understanding of real estate development. You will want to thoroughly evaluate your prior business experience before applying to become a Dunkin’ Donuts franchise owner.

Determine if you qualify for the VetFran Incentive. The Veterans Transition Franchise Initiative offers a 20% discount on the initial franchise fee to qualified Veterans who purchase a Store Development Agreement for 5 or fewer stores. Dunkin’ Donuts was ranked #15 in the 2011 “Franchise500” ratings for most popular franchises, and is #4 on the top ten list of popular franchises for military veterans.

Recognize the values of the Dunkin’ brand. Dunkin’ Donuts expects their franchisors to exhibit superior character. They focus on several key qualities found to be important to successful franchising. These qualities include: honesty, transparency, humility, fairness, respect, responsibility, and integrity. Before applying to open a Dunkin’ Donuts franchise, it is important to evaluate your own interaction with these values to make sure you will be a good fit for the company and the brand. Ask yourself: are these values important to me? If possible, evaluate the ways in which you exemplify these values, particularly in the workplace. This will help you get a position as a Dunkin’ Donuts franchiser.

Assess market availability. You will want to look at the market availability for Dunkin’ Donuts franchises and see if there are available markets in your location of interest before proceeding with the franchising application. Markets are available in both the USA and Canada, with “highlighted markets” of particular interest in California, Minnesota, Michigan, Missouri, and Louisiana. There are some locations considered “reserved markets.” This includes most of New England, Pennsylvania, Florida, Nevada, Delaware, Maryland, and Washington, DC. This means that the markets are reserved for existing franchisees. Some locations (including Washington, Oregon, Idaho, Montana, Wyoming, Nebraska, and Alaska are considered to be “future markets.” These are markets in which Dunkin’ Donuts has not opened yet and in which there are currently no development opportunities. There are also opportunities for international franchising. Dunkin’ Donuts has franchises in over 60 countries and is looking for additional growth around the world.

Attend franchise events. These events are planned by Dunkin’ Brands for prospective franchisees, and provide the opportunity to meet franchising managers, find out how new franchises are awarded, and learn more about the Dunkin’ Brands company.

Applying for a Franchise

Access the franchising application. You can access the application for domestic franchising here: http://franchisinginformation.dunkinbrands.com/Application.

Decide your location. In particular, the application will ask if you want to open a “traditional store” or a “non-traditional store.” Non-traditional stores are unique venues (including airports, mass transit terminals, stadiums, hospitals, grocery stores, casinos, military bases, and universities) in which you can open a Dunkin’ Donuts store. These non-traditional sites are designed to be placed in high-traffic venues or places where people dwell for extended times or are “captured audiences.”

Disclose your financials and experience. You will be asked questions about your approximate total net worth and the approximate amount of your liquid assets. Next, you will be asked to discuss (in a free-form paragraph) your relevant restaurant experience. You will also have the opportunity to attach a resume. This will be helpful if you have experience that you feel will be attractive to those reviewing your application. You will be asked if you have a corporation (and if so, to provide information about it) and will be asked to list any additional partners.

Submit your application. After providing this information, you will have the option of reviewing and submitting your application. Your application will be reviewed by the Dunkin’ Donuts franchise team. You will be emailed a confirmation receipt upon reception of your online application. This email will include details regarding the next steps in the application review process.

Review the Franchise Disclosure and Qualification Package. You will receive the Franchise Disclosure Document (FDD), which contains information about the franchisor, the franchise system, and the agreements that will be required to open a franchise. Specifically, the FDD contains Dunkin Donuts financial statements, the franchise agreement, franchisee contacts, cost breakdowns, initial franchise fees, royalties and advertising fees. This is designed to assist in you in making an informed decision about opening a Dunkin’ Donuts franchise.

Provide proof of citizenship and proof of assets. You will be required to produce proof of your citizenship as an American citizen or provide your Permanent Resident/Alien Registration Card. In addition, you will be asked to provide proof of your assets so that the company can ensure that you have the financial resources and stability required to open a franchise. You will also be required to submit to a credit and background check as well.

Receiving Approval

Interview with the franchise manager. After your initial screening (done through the application) is complete, you will meet with the franchise manager. Through communication with the franchise manager as well as other franchise owners, you will begin to understand how to develop a business plan for your Dunkin’ Donuts franchise, which is an essential part of becoming a franchise owner. Consider what questions you may want to ask to the franchise manager and to other franchise owners. In particular, other franchise owners will be able to provide you with their personal experiences owning a Dunkin’ Donuts franchise and may be able to provide advice on what to do and what not to do.

Prepare a business plan. Your business plan is an important part of demonstrating your ability to run a successful Dunkin’ Donuts franchise. You will be required to submit this business plan to the franchise manager. Your financial review will be done based on the information that you include in this business plan. You will find out more about the detailed requirements of the business plan as you go through the application process, but it should include the following general information: Details about the local market where you will open your franchise. Information about competitors in your area. Facts about what you will bring to the company and your expertise, including previous experience in the restaurant industry. Your financial model for managing your franchise.

Undergo financial review. A thorough review of your financial plan for your franchise will be conducted based on your business plan. You must have a detailed financial model for running your franchise to present to the franchise manager. As long as you have included a detailed financial plan in your business plan, you will not have to do anything more as you undergo review.

Opening Your Franchise

Receive franchise approval. You will receive franchise approval once your financial and background checks are completed, after you have had a financial review, and after you have completed and submitted your business plan. Approval will only be given to candidates who meet all the requirements of franchise owners.

Sign your Store Development Agreements (SDA). This agreement sets out the geographic areas for the development of your new Dunkin’ Donuts restaurant or restaurants. When you sign the SDA, you are agreeing to develop the minimum number of restaurants specified for that location. This number is determined by Dunkin’ Donuts.

Attend the necessary training. Before you open your first restaurant, you will be required to attend a 3-day training course held in Boston, Massachusetts. After completing this course, you must complete the Dunkin’ Donuts Core Initial Training program. This program is held in Braintree, Massachusetts or Orlando, Florida or in a designated training restaurant. More details regarding the training required by Dunkin’ Donuts can be found in the FDD.

Enroll in Dunkin’ Donuts additional training programs. These programs are designed to teach you about the brand and about restaurant management in general. Topics that will be covered include an overview of Dunkin’ Brands, information about restaurant management systems, and an explanation of manufacturing and production.

Consult real estate and construction experts. These professionals will help you to identify and develop your new restaurant’s location. The demographics and lease requirements for a Dunkin’ Donuts restaurant can be found here: https://www.dunkinfranchising.com/content/dam/franchisee/Process/sitereuirements/DD-Site-Demo-Lease-Requirements.pdf. Pay attention to the specific requirements for preferred demographics and traffic count. In addition, note the typical lease requirements and make sure that you are able to abide by these terms before agreeing to open a franchise.

Meet Dunkin’ Donuts restaurant requirements. Dunkin’ Donuts will require you to abide by certain terms and meet certain minimums in your restaurant. For example, there are specific requirements for electricity, the HVAC system, the water piping, utilities, and restrooms. All of these requirements can be found here: https://www.dunkinfranchising.com/content/dam/franchisee/Process/sitereuirements/DD-Site-Demo-Lease-Requirements.pdf.

Plan your grand opening. After you finalize your lease or purchase, your store is built, and your crew is hired, you will be ready for your grand opening. You will want to make this event a celebration to attract attention and draw crowds to your store. You may want to decorate your store in the theme colors of Dunkin’ Donuts, orange and pink. You can offer prizes or incentives for attending your grand opening. For example, you may want to reward the first customer at your drive-through with a gift card to Dunkin’ Donuts. This can help you gain and keep customers. If you want to get out of a franchise agreement, review the contracts. See if there are any stipulations on getting out of a franchise contract and then proceed. You may need the help of an attorney.