Duck Donuts

Food & Beverage

FDD Year: 2025

Item 19 Available

Duck Donuts^®

Food & Beverage • Year: 2025

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Business Model Overview

Duck Donuts franchises operate quick-serve outlets offering fresh, made-to-order donuts prepared on the premises, along with other breakfast items, gourmet coffee, and merchandise. The business serves the general public in a quick-serve setting for on‑ and off‑premises consumption. Significant revenue streams identified in the FDD include sales of donuts and other breakfast items, gourmet coffee, and retail merchandise.

Pros & Cons Analysis

Pros

Very large franchised network (133 franchised units, substantially above industry) — strong brand scale, support network and resale/liquidity potential.

Robust Item 19 sample size (96, substantially above industry) — more reliable sales data for assessing unit-level profitability.

Lower incremental training/fee burden: training cost per trainee is zero (substantially below) and the initial fee covers more people than peers (4 people, substantially above) — reduces some add-on upfront costs.

Cons

Minimal territory protection (territory_size_value substantially below peers) — higher risk of market overlap and competition among units.

Higher initial franchise fee (low end $30,000, substantially above industry) — increases upfront capital required and lowers initial return on investment.

Elevated outlet terminations (5, substantially above industry) — indicates greater closure risk and potential operational or unit-level performance issues.

Legal Risk Score

69/100

NORMAL

A 2022 California consent order resolved claims the franchisor ran Google click ads and offered a franchise while its Disclosure Document wasn’t effectively registered; Duck Donuts paid a $5,000 penalty and agreed to comply. This isolated regulatory misstep suggests modest compliance risk, but prospective franchisees should monitor registration and marketing practices.

Territory Protection Score

19/100

POOR

The franchisee receives a 'protected' but not exclusive territory, a common but less safe arrangement. However, the franchisor can reduce the territory for non-performance and sell online into the area, and the franchisee lacks a right of first refusal—undermining exclusivity and yielding a weak score (19/100).

Training & Support Score

60/100

NORMAL

Rated 60, Duck Donuts' (2025) training and support is standard: it includes on-site training and a solid amount of instruction (about 80 hours) for up to four people, which supports launch readiness; however, on-site support incurs additional fees and living expenses are not covered, increasing franchisee outlays.

Executive Summary

This opportunity requires a substantial upfront investment — beyond a non‑refundable $40,000 initial franchise fee, material build‑out and equipment costs are large (leasehold improvements $270k–$405k; FF&E $110k–$137k), making total startup capital costly. Performance data (Item 19) show average gross sales of $577,748 and a median of $548,298 across 96 outlets, but wide dispersion (low $202k, high $1.32M; top quartile ~$848k, bottom quartile ~$373k) and a modestly low stability metric indicate variable outcomes and a high‑risk performance profile for some operators. Operational and structural risks are noteworthy: territory protection is weak (score 19) with the franchisor able to sell online and shrink territories, training/support is adequate but carries extra fees and mandatory personal management/full‑time requirements, and a 2022 regulatory consent order (small penalty) raises a moderate compliance flag. Taken together, the brand shows noteworthy growth and topline potential for strong locations but also meaningful capital, territorial and execution risks that could affect returns.

Performance Analysis

For None, the total_units_growth chart (None total units growth from 2022 to 2024) documents the change in overall unit count across the period, and the unit_mix chart (None unit mix from 2022 to 2024) shows how that change was allocated among different unit types. Prospective franchisees should use the total_units_growth trend to assess whether the brand is in an expansion, plateau, or contraction phase and review the unit_mix to determine if growth is broad‑based or concentrated in particular formats—information that signals scalability, market momentum, and potential operational or competitive risks.

Key Performance Indicators

None total units growth from 2022 to 2024

None unit mix from 2022 to 2024

Financial Performance Analysis (Item 19)

Average Gross Sales:

$577,748

Median Gross Sales:

$548,298

High Gross Sales:

$1,324,408

Low Gross Sales:

$202,576

Sample Size:

Audited:

Franchise vs Corporate Performance: Franchised outlets (96 outlets) reported an average gross sales of $577,748 and a median of $548,298 for calendar year 2023. The single affiliate-owned outlet reported gross sales of $722,946 and disclosed cost percentages (food 23.4%, labor 31%) — the affiliate outlet’s top-line is above the franchised average, but only one corporate/affiliate outlet is reported, so it is not a representative corporate performance sample.

Performance Variability Analysis: Performance is widely dispersed: the highest franchised outlet had $1,324,408 in gross sales while the lowest had $202,576. Top 25% (24 outlets) averaged $848,510, the middle 50% (48 outlets) averaged $547,328 (near the median), and the bottom 25% averaged $373,145. The mean exceeds the median modestly, indicating a right-skew driven by higher-performing locations.

Data Scope and Limitations: The Item 19 sample covers 96 franchised outlets that were open and operated continuously during 2023; 22 franchised outlets and several non-traditional outlets (mall, food trucks, arena, international) were excluded. No audited financial statements or an overall average percent of outlets attaining the average are provided. Food and labor cost percentages are shown only for the single affiliate-owned outlet; other expense categories and net income figures are not disclosed.

Investment Requirements

Total Outlets:

134

Company Owned Units:

Franchised Units:

133

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