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Review of the Shipley Donuts Franchise Opp and Startup Costs

Do you love a good donut in the morning? Would you love the opportunity to provide your community with a tasty product that is incredibly easy to bake in your store? That’s exactly what you’ll get with a Shipley Do-Nuts franchise! When you become a franchisee, you’ll gain access to a proprietary recipe that offers over 60 variations of product from one donut mix that requires water and mixing to make. If you have the ability to turn on a mixer, you have the skills to become a successful franchisee.

If you are prepared for a high volume food industry location that has primarily morning hours, then you’re ready to look more in-depth into this investment opportunity. You really can produce a high volume of product without losing customers that demand variety and quality.

What Are the Initial Investment Costs?

In order to get started with your Shipley franchise, you’ll need to first consider the $50k franchise fee that is associated with this franchise. There are also your local real estate costs that can be variable based on the size of the store, whether you need to lease or own, and the improvements that you may need to make. In order to qualify, you’ll need to prove a net worth minimum of $500k and there must be $150k of that is liquid capital assets.

If you’re thinking about a North or Central Texas location for your franchise, these requirements are slightly lower. You’ll only need a $350k net worth and liquid capital of $80k to get going on your new franchise.

Depending on where you’d like your location, you may be working with an authorized franchising provider instead of the core organization. The requirements are the same and you’ll still have the same location flexibility that allows for co-branding opportunities, but you’ll be working in a sub-franchising model – especially in the American South. The low estimate for a total investment into a Shipley franchise is $216k, while the high estimate is $416k. The one benefit, however, is that as a subfranchising arrangement brings with it a potential discount in the initial franchise fee of up to 20%.

Once you achieve your grand opening, there is a required ongoing royalty of 3% from your gross sales. This fee is collected weekly. You must be directly involved with the daily operations of this franchise and the on-site manager must be a principal of the franchise. The franchise term under this model is 15 years.

What Kind of Support Is Received?

A relationship with Shipley Donuts brings with it a level of support services that is unique and works with you to build your own success story. From the moment your signature hits the dotted line, you become a partner in the task of creating a successful plan of development for your new franchise. The goal is pretty simple, yet still profound: to provide each franchisee, including you if you become one, with the skills and understanding that is needed to make this opportunity become a successful one.

It all starts with the location of your new franchise. You’ll receive help selecting the right piece of real estate using the latest in local demographic data so you can maximize the level of traffic your new franchise will receive. Once the site is selected, you’ll receive assistance with the leaseholder improvements that need to be made in both design and appearance so your operation can be simple and efficient.

When you’ve got the improvements starting, you’ll be brought into the organization’s comprehensive training program that provides 3 full work weeks of hands-on training in one of the company’s training stores. You’ll go through the expectations of daily operations, how to control inventory for the franchise, service and production needs, and even discuss the most effective ways to run your new shop. The training program is designed to help each franchisee immediately maximize their potential no matter how strong their business experience happens to be.

If you start a North or Central Texas franchise, you’ll receive another 120 hours of hands-on training in Waco, TX after you’ve completed your training at corporate headquarters.

Once you achieve your grand opening, you’ll be able to spend your marketing money on your own needs because there isn’t the standard brand recognition and development royalty that you’ll find in other businesses. The goal is to customize your marketing needs with this relationship so you can target your local market in the best possible way. You’ll also receive guidance to help centralize your production, get involved with community events, and even start a catering side-business if you wish.

Is This the Right Investment To Make?

The one issue that creeps up with a Shipley Donuts franchise opportunity is the limits of the protected territory that you’ll receive. The agreement stipulates that you will receive either a 1 mile radius for your shop that is protected or a population center that is 25,000 – whichever is smaller. This limits the level of exclusivity that you’ll have in your local community and could cut into your overall profits.

If you’re looking to invest into multiple units, you may also find this to be a struggle under this franchising agreement. Shipley tends to prefer successful proof of your concept before awarding multiple units and because of the requirement for on-site management, this is generally not feasible for a solitary investor.

If you’re looking for a new brand of donuts for your community and one that is extremely easy to bake in your shop, then you could have the right investment opportunity on your hands right now. Even if people don’t admit it, everyone loves a good donut every now and then and when you’ve got freshly baked goods with their smells wafting from your store in the morning, you’ll make stomachs growl and that means profits! If you can meet the financial and involvement requirements, then speak with Shipley today about starting your own franchising opportunity.

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