Has the entrepreneurship journey always been a donut for you? If so, Shipley Do-Nuts is the franchise you want to invest in. Offering over 60 varieties of fried doughy pastry, this company has been in business since 1936. The founder, Lawrence Shipley Sr.’s unique recipe for donuts only required yeast and water – making it easier and less expensive to produce than most of its competitors. The company has stayed true to its roots, keeping the same recipe and processes for over 80 years. Today, Shipley Do-Nuts operates 300 franchises across America. So, if you’re ready to take the next step in your career and open a donut shop, consider Shipley Do-Nuts franchise.
Opening a Shipley Do-Nuts franchise costs between $455,000 and $811,500. This includes the initial franchise fee of $40,000, equipment, real estate, and build-out costs. Additionally, you will need a working capital of between $50,000 and $100,000 to cover the first few months of operation.
However, before we get into the nitty-gritty of the cost of starting a Shipley Do-Nuts franchise, it’s crucial to know where to get reliable cost estimates for your startup. Let’s go over a few ways you can use to get an accurate estimate for your business.
Franchise Disclosure Document (FDD)
The FDD is a legal document that a franchisor should provide to a prospective franchisee. It contains key information about the franchise, such as the initial investment, franchise royalty fees, and other important details. The FDD will also outline the franchisor’s site selection, build-out, and equipment requirements.
It’s important to note that the FDD is not a guarantee of success. However, it can give you a good idea of what you can expect to spend when starting a Shipley Do-Nuts franchise.
Franchise Consultant
Seeking professional help is always a good idea when starting a business. A franchise consultant can help you navigate the franchising process and provide detailed information about the costs of starting a Shipley Do-Nuts franchise.
Engage Existing Franchisees
Engaging with existing franchisees is a great way to get an accurate estimate of the costs of starting a Shipley Do-Nuts franchise. Existing franchisees will have hands-on experience with the franchisor and can provide you with insights about the business. They will also be able to tell you about any unexpected costs you should prepare for.
With this information in hand, you can make an informed decision about whether or not starting a Shipley Do-Nuts franchise is the right move for you.
Now, let’s look at a detailed breakdown of the costs you will incur when starting a Shipley Do-Nuts franchise.
Initial Franchise Fee
The franchising fee for a Shipley Do-Nuts franchise is $40,000. This fee gives you the right to use the company’s name, trademark, and business model. It also includes access to Shipley Do-Nuts’ operational manuals, marketing materials, and training programs.
Leasehold Improvements
Once you have secured a location for your franchise, you will need to build out the space to meet Shipley Do-Nuts’ specifications. This includes installing the required equipment and fixtures and any necessary renovations. The cost of leasehold improvements will vary depending on the size and location of your franchise. However, you can expect to spend between $250,000 and $650,000 on leasehold improvements.
Working Capital
While you are still getting your footing in the business, you may not realize any profits in the first few months. For this reason, it’s important to have a working capital of at least $50,000. This will help you cover the day-to-day expenses of running your business, such as payroll, rent, utilities, and inventory.
Equipment
Like any other business, you need the proper equipment to start a Shipley Do-Nuts franchise. The equipment cost will vary depending on the size and location of your store. The cost of equipment is likely to range between $120,000 and $200,000.
Monthly Royalty
The franchisor will collect a monthly royalty fee when your business starts operating. The royalty fee is based on a percentage of your store’s gross sales. For Shipley Do-Nuts, the royalty fee is 5%. So, if your store generates $100,000 in sales monthly, you will owe the franchisor $5,000 in royalty fees.
Advertising Fee
You need to invest in marketing and advertising to create awareness for your franchise and attract customers. The franchisor will collect an advertising fee from all franchisees to fund these efforts. The advertising fee is 3% of your store’s gross sales.
The cost of starting a Shipley Do-Nuts franchise can range between $455,000 and $811,500. And with the help of a franchise consultant and by engaging with existing franchisees, you can better understand the costs involved. This will allow you to make an informed decision about whether or not starting a Shipley Do-Nuts franchise is right for you.