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The marketing slogan that Dunkin’ uses to attract franchisees is “invest in the name that all coffee fans know”.
That’s actually a pretty fair assessment.
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After 70 years of history, Dunkin’ is quick to point out that it has ranked #1 among coffeehouses in the Brand Keys Customer Loyalty Index for 13 consecutive years. With over 11,000 locations in over 60 countries, including 8,500 in 41 US states, it’s hard to imagine there’s a bigger name in coffee, donuts and breakfast on the go. .
The good news for ambitious entrepreneurs looking to get in on the action is that 100% of it is owned by franchisees – but those entrepreneurs better have the cash to back up the ambition.
If you want to ride in the wake of one of the biggest brands in the world, it will cost you.
To even be considered by Dunkin’ Guardians, you need to have a net worth of at least $500,000, depending on your market — and that’s per restaurant. You will also need to prove that you have $250,000 in cash.
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What type of investment is required?
For a traditional location of 1,200 to 2,600 square feet, you will have to pay franchise fees between $40,000 and $90,000, but it doesn’t stop there. You’ll also have to pay an ongoing franchise fee of between 2% and 6%, not to mention the 5% advertising fee – all those Dunkin ads you see on TV, after all, benefit your location as much as anyone else. any other.
In total, Dunkin’ estimates that your overall investment will be between $526,900 and $1,787,000.
Is there a cheaper option?
Non-traditional pitches start at 500 square feet. While the $500,000 minimum net worth requirement isn’t changing, the overall investment is much lower — between $121,400 and $972,800, according to Dunkin’. This includes franchise fees of $1,000 to $2,250 per year and an ongoing franchise fee of 5.9%. The 2.5% advertising fee is half of what it is for a traditional opportunity.
If you’re still short but hoping Dunkin will float the difference to you on some sort of payment arrangement, think again. Although the company will be happy to refer you to preferred lenders, Dunkin’ does not offer any type of financing.
You may need to consider:
- SBA Guaranteed Loans
- Business Acquisition Loans
- Equipment loans and rentals
- Home loans
In some cases, with special circumstances, Dunkin’ may reduce or even defer your initial charges, your ongoing charges or both. Some benefits are available to qualified veterans and you may have a lower investment per location if you franchise multiple locations.
So what does it get me?
You’ll need to earn a lot of money to recoup an investment of this size – so the question, of course, is what you can expect to earn once you’re up and running. Dunkin’ does not speculate on what individual franchisees can earn; but, if you complete an application, the company will send you a Franchise Information Document (FDD) which contains information on the earnings of current franchisees. According to franchise development company Fransmart, the Dunkin’ FDD report states that the average franchisee earns $124,000 per year.
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