A Guide to Dunkin’ Donuts Startup Costs
If you want to open a Dunkin’ Donuts franchise, you need to familiarize yourself with Dunkin’ Donuts startup costs so you can create a solid financial plan. This article will break down all the expenses and tell you which small business loan options you have.
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One-Time Costs of Opening a Dunkin’ Donuts Franchise
Business assistance, brand recognition, and buying power are three reasons why franchising can be more lucrative than establishing independent businesses. However, you still need to have a clear financial plan for your business to work. You must calculate how much money you need for the initial launch.
Below are the expenses you should take into account:
| Costs | Price Estimation |
|---|---|
| Initial franchise fee | $40,000–$90,000 |
| Licenses and deposits | $500–$5,500 |
| Building costs | $19,500–$600,000 |
| Site development costs | $0–$350,000 |
| Additional development costs | $4,700–$90,000 |
| Restaurant technology system | $9,700–$95,000 |
| Equipment, signs, and fixtures | $57,000–$300,000 |
| Opening inventory | $4,000–$20,000 |
| Marketing startup fee | $0–$10,000 |
| Uniforms | $0–$1,200 |
| Additional funding for the first three months of operation | $0–$105,000 |
| Other opening costs | $9,500–$70,000 |
| Estimated total | $1,700,000+ |
You might need to invest more money depending on where you open your franchise. These are a few factors that may have a significant effect on your startup cost:
- Location of businesses
- Land’s square footage
- Number of restaurants you want to run
- Real estate development
The franchise cost will also vary depending on the types of the establishment:
- Freestanding
- Storefront
- Convenience store/gas station restaurant
- Cart or kiosk
You can get a discount for the initial franchise fee if you commit to operating multiple restaurants.
Military veterans get a 20% discount for purchasing a right to five or fewer locations.
Recurring Costs of Running a Dunkin’ Donuts Franchise
Dunkin’ Donuts franchisees need to pay a recurring percentage of the restaurants’ gross sales. These payments go to:
- Royalty fee (2–6%)
- Advertising fee (5%)
The money will be used as a budget for branding, market research, and the development of your Dunkin’ Donuts franchise. You need to pay these fees weekly.
Dunkin’ Donuts also requires the remodeling of restaurants every ten years.
Other ongoing expenses you should take into account are:
- Staff salary ($11–$15 hourly)
- Training expenses ($2,000–$35,000 regularly)
- Inventory restock ($3,000–$4,500 monthly)
- Utilities ($680–$28,365 monthly)
- Insurance ($4,500–$16,000 annually)
- Cash reserves ($20,000–$35,000 monthly)
How To Start a Dunkin’ Donuts Franchise
Before applying for a Dunkin’ Donuts franchise ownership, you need to have at least:
- $500,000 of net worth and $250,000 in liquid assets
- Experience in retail or food service management
Once you’ve met the criteria, you need to apply by following these steps:
- Find and research an available market
- Gather your financial statements
- Submit your online application
Dunkin’ Donuts will review your online application and evaluate your background. You can expect a response within 60 to 90 days of registration. If you pass, it will take additional 8–15 months for Dunkin’ Donuts to find a suitable site, get it inspected and approved, construct your restaurant, and open it.
How To Finance a Dunkin’ Donuts Franchise
If you would like to take out a startup loan for your Dunkin’ Donuts franchise, you have a few options to choose from:
| Types of Loans | Description |
|---|---|
| Dunkin’ Donuts’ preferred lenders | Dunkin’ Donuts does not offer direct funding for franchisees, but you can borrow money from their partner lenders |
| Small Business Administration (SBA) Loan | You can get a $5,5 million loan from the Small Business Administration. The requirements vary based on programs, but most of them require you to:
|
| Bank loans | Franchisees might be able to secure funding by taking out a bank loan if they have:
|
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