If you’re considering investing in a donut franchise, Shipley Donuts might be on your radar. A popular chain of donut shops that has been operating since 1936, Shipley Donuts is famous for its fresh, handmade donuts, kolaches and coffee. The company has expanded to 335 locations in the United States with the experience in food industry franchising of over 85+ years. Nevertheless, before taking the decision of investing in a Shipley Donuts franchise, you should be aware of initial cost, ongoing fees, and potential profit. In this article, we’ll dive into the depth of all the important factors like the franchise cost, potential profit and reviews from current and former franchisees of Shipley Donuts that will help you to take an informed decision as to whether to invest in this franchise or not.
The market for food and beverage services expanded at a compound annual growth rate (CAGR) of 5.7% from $3,559.94 billion in 2022 to $3,763.14 billion in 2023.
How much does a Shipley Donuts Franchise cost
The initial investment required to open a Shipley Donuts franchise ranges from $525,000 – $1,239,500, depending on various factors such as location, size of the unit, and other expenses. This investment includes the initial franchise fee, which is $40,000, as well as costs for equipment, inventory, and other startup expenses. Additionally, franchisees are required to pay ongoing royalties of 5% of gross sales and a national marketing fund fee of 1% of gross sales.
How much does it cost to franchise a Shipley Donuts in the United States?
The initial investment required to open a Shipley Donuts franchise ranges from $525,000 – $1,239,500, depending on various factors such as location, size of the unit, and other expenses.
| Shipley Donuts Franchise Price and Costs | |
| Franchise Fee | $525K – $1.2M |
| Franchise Cost | $40,000 |
| Royalty Fee | 5% |
| Advertising Fee | 1% |
| Term of Agreement | 15 years |
| Is franchise term renewable? | Yes |
| Renewable Franchise Fees | – |
How much do Shipley Donuts franchise owners make?
It is difficult to estimate the exact amount that the brand’s franchise owners make, as it depends on various factors such as location, competition, franchise fees, operating costs, and other economic factors. However, we can make some rough estimates based on the Average Unit Volume (AUV) of this franchise, which is $ 400,000.
What is Shipley Donuts franchise profit?
I will estimate/analyse/project the franchise profit and years to recoup the investment (ROI).
| AUV | Estimated Annual Profit (12.5%) | Estimated Annual Profit (15%) | Estimated Annual Profit (18%) |
| $ 400,000 | $ 50,000 | $ 60,000 | $ 72,000 |
| Recoup mid-point
$ 882250 |
17 years | 14 years | 12 years |
The estimated franchise profit is in the range of $50,000 to $72,000 and it will take 12 to 14 years to recoup the investment. According to industry standards, getting a return on the franchise investment willt take a very long time.
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Shipley Donuts Franchise Requirements
- Financial Requirements: Franchisees must have a minimum net worth of $600,000 and a minimum liquid capital of $200,000. In addition to these requirements, franchisees will be responsible for paying an initial franchise fee, ongoing royalties, and other fees related to operating the franchise.
- Business Experience: While prior experience in the foodservice industry is not required, Shipley Donuts does prefer candidates with prior business management experience.
- Operational Requirements: Franchisees must be willing to operate their Shipley Donuts location according to the company’s established systems and procedures such as using the company’s recipes, equipment, and marketing strategies.
- Training: Another requirement that prospective franchisees are required to fulfil is to attend a training program that will be held at the company’s headquarters in Houston, Texas.
- Location Requirements: Prospective franchisees have to meet certain location criteria such as size, accessibility and visibility set by the Shipley Donuts.
What is Shipley Donuts franchise reviews
Positive Reviews :
“I am impressed by the fact that Shipley Donuts has been in business for over 80 years, and their donuts are considered some of the best in the industry. Their customers’ loyalty is a true testament to the quality of their products, leading to their long-standing reputation.”
“For an entrepreneur like myself, the turnkey solution provided by the franchise model excites me. With the support and ample training given by Shipley Donuts to franchisees, success in the business is inevitable.”
“The recognized and well-respected brand image of a franchise has piqued my interest as I consider investing. My belief is that this could aid in the attraction of customers and differentiate the franchise from its rivals, thereby increasing profits and achieving prosperity.”
Negative Reviews :
“As someone considering investing in a Shipley Donuts outlet, I am aware that while the company is known for their delicious donuts, the food industry is highly competitive, which could pose a challenge in standing out from other similar businesses.”
“I’m concerned that Shipley Donuts requires franchisees to purchase all ingredients and supplies through approved vendors. While this may ensure quality control, it limits the ability to source ingredients locally or negotiate better prices, potentially affecting the flexibility and profitability of the business.”
“I’m concerned about the high startup costs associated with investing in a franchise. It could be challenging for some entrepreneurs to raise the necessary funds, and it’s important to carefully consider these costs before making a final decision.”
Shipley Donuts Franchise Rankings
The franchise was ranked #131 in the year 2023.
What is the Shipley Donuts?
Shipley Donuts is a popular chain of donut shops that was founded in 1936 in Houston, Texas. The company has since expanded to over 300 locations across the United States, including in states such as Texas, Louisiana, Alabama, Mississippi, Tennessee, Arkansas, and Georgia. Shipley Donuts is known for its freshly made, handcrafted donuts, kolaches, and coffee. The company uses high-quality ingredients and a proprietary recipe to create their signature donut flavours, such as glazed, chocolate-iced, and apple fritters. Shipley Donuts is a franchised business model, which means that individuals can invest in and operate their own Shipley Donuts franchise location.
Is Shipley Donuts a Franchise Opportunity?
Yes, Shipley Donuts is a franchise opportunity. The company offers interested investors the chance to open their own Shipley Donuts outlet location, with the support of the company’s established brand, business systems, and training programs.
Facts That Nobody Told You About Shipley Donuts
- Shipleyz Donuts was one of the first donut chains to offer customers a drive-thru option.
- The company’s original glazed donut recipe has remained unchanged since 1936.
- Shipley Donuts is still family-owned and operated, with Lawrence Shipley III serving as the current CEO.
- Shipley Donuts has been featured on several food and travel shows, including “Diners, Drive-Ins, and Dives” and “Man vs. Food.”
- In addition to donuts and kolaches, Shipley Donuts also offers a variety of breakfast sandwiches, pastries, and coffee drinks.
- Shipleys Donuts has a mobile app that allows customers to place orders and earn rewards points for future purchases.
| Shipley Donuts Franchise Review and Information | |
| Industry Type | Food & Beverage |
| Sub Category | Doughnuts, Baked Goods, Breakfast/Brunch Restaurants |
| Year Established | 1936 |
| Company Name | Peak Rock Capital |
| Founder/Management Head | Clifton Rutledge |
| Franchising Started | 1987 |
| Employees at Company H.O | 61 |
| Franchise Expansion Plan | Throughout the US |
| Number of Units | 335 |
| Number of Franchise Units | 324 |
| Social Media Handles | |
| Youtube | |
| Company Office location | 5200 N. Main St.
Houston, TX 77009 |
Shipley Donuts Training to Franchises
Shipleys Donuts offers a comprehensive training program for new franchisees, which includes both on-the-job training and classroom training. The on-the-job training component consists of 136 hours of hands-on training, during which new franchisees will work alongside experienced Shipley Donuts staff members to learn the ins and outs of running a successful donut shop.
In addition to on-the-job training, Shipleys Donuts also provides 24 hours of classroom training, which covers topics such as food safety, customer service, inventory management, and financial management. This classroom training is designed to provide franchisees with a solid foundation of knowledge and skills that they can apply to their own Shipley Donuts location.
Shipleys Donuts Operations to Franchises
Shipleys Donuts requires a hands-on approach to franchise ownership, which means absentee ownership is not allowed. Franchisees must be actively involved in the day-to-day operations of their Shipley Donuts location. Additionally, the franchise cannot be run from a home or mobile unit, and it requires a full-time commitment. The franchise requires a minimum of 10 employees to run, including managers, bakers, and service staff.
Shipley Donuts does offer exclusive territories to its franchisees, which means that franchisees are granted a protected area to operate their franchise and prevent competition from other Shipley Donuts franchises. Overall, potential franchisees should be prepared for a significant time and financial investment to operate a successful Shipleys Donuts franchise.
How is Shipley Donuts Territory Granted to Franchises
Franchisees are granted exclusive territories by the company to operate their franchise. This protected area is determined on the basis of various factors such as population density, competition and other economic and locational factors. The company helps its franchisees to select the best possible location to establish their outlets and also ensures that market area is significant to the location of the franchise.
What is the Franchise Term of Agreement and Renewal?
The term of the franchise agreement offered by the franchisor is 15 years, which can be renewed subject to the terms and conditions of the company.
Does Shipley Donuts provide Financial Assistance to Franchises?
The brand does not provide any in house financing, however, it has established connections with external entities that provide financial assistance for the following purposes: equipment, payroll, etc.
Pros & Cons of owning a Shipleys Donuts Franchise
Pros of owning a Shipleys Donuts Franchises
- Established brand: Shipleys Donuts has been in business for over 80 years and has a strong reputation for serving high-quality, fresh donuts and other baked goods.
- Support from the franchisor: Shipleys Donuts provides comprehensive training and ongoing support to its franchisees, including assistance with site selection, marketing, and operations.
- Profit potential: With the right location, marketing strategy, and management, a Shipleys Donuts franchise can be a profitable investment for potential franchisees.
- Exclusive territories: Shipleys Donuts offers its franchisees exclusive territories to operate their franchise, which can help reduce competition and increase profitability.
Cons of Owning a Shipleys Donuts Franchises
- High initial investment: The initial investment required to open a Shipley Donuts franchise can be significant, ranging from $394,400 to $1,006,000.
- Ongoing fees: In addition to the initial investment, franchisees are required to pay ongoing royalties and national marketing fund fees.
- Time commitment: Running a Shipleys Donuts franchise requires a significant time commitment, and franchisees must be actively involved in the day-to-day operations of their location.
- Limited flexibility: Franchisees must follow the franchisor’s established policies and procedures, which may limit their ability to make decisions and operate the franchise in their own way.
Shipleys Donuts Franchise Success and Failure Rate
The below table will highlight the Shipleys Donuts franchise’s franchise success and failure rate for the last 3 years. This will supplement your decision-making process.
| Year | Format | Start | End | Change |
| 2020 | Franchise Owned | 290 | 317 | +27 |
| Company Owned | 12 | 10 | -2 | |
| 2021 | Franchise Owned | 317 | 332 | +15 |
| Company Owned | 10 | 0 | -10 | |
| 2022 | Franchise Owned | 332 | 324 | -12 |
| Company Owned | 0 | 11 | +11 |
Competition Analysis of Shipleys Donuts Franchise
| Shipley Donuts | Cost to Franchise | Franchisee Fees | Royalty + Ad fees | Expected Profit | Recoup of Capital | FD Rating |
| Shipley Donuts franchise | $525K – $1.2M | $40,000 | 5% + 1% | $50,000-$72,000 | 12-17 years | 3.9/5 |
| Twisted sugar | $139,700 – $390,500 | $ 35,000 | 6% + 2% | $ 277,777.77 – $ 400000 | 0.66-0.95
years |
4/5 |
| SomiSomi Franchise | $250,000- $500,000 | $35,000 | – | – | – | 4/5 |
| Ice Cream Delight
Franchise |
– | – | – | – | – | 3.5/5 |
| Insomnia Cookies
Franchise |
$65,500 – $111,400 | $ 25,000 | – | – | – | 3.5/5 |
| Nothing Bundt Cakes Franchise
Franchise |
$440,800 – $636,500 | $35,000 | 5% + 4% | – | 2-3 years | 3.5/5 |
The Franchise Deck rating for the Shipleys Donuts franchise is 3.9/5.0.
Franchise Deck Analysis and Overview
If you’re considering a franchise investment, Shipley Donuts is a well-established brand with a strong reputation for high-quality baked goods. The franchisor provides comprehensive training and support to help franchisees succeed. With exclusive territories, franchisees have the potential to reduce competition and increase profitability. However, it’s important to consider the high initial investment and ongoing fees associated with owning a Shipley Donuts franchise.
Franchisees must also be prepared to commit a significant amount of time to the day-to-day operations. While there may be limited flexibility in decision-making, potential profitability with an AUV of $400,000 makes it a worthwhile investment to consider with careful analysis and financial projections.
Potential Risks to consider before investing in a Shipleys Donuts franchising
Potential risks to consider before investing in a Shipley Donuts franchise include the high initial investment, ongoing fees and royalties, competition from other donut shops, and the risk of low sales if the franchise is located in an area with low demand for donuts. Franchisees must also be prepared to commit a significant amount of time and energy to running their franchise and following the franchisor’s established policies and procedures. Conducting thorough market research and due diligence can help mitigate these risks and ensure a successful investment.
Is the Shipleys Donuts franchise Profit Worth the Cost?
While the potential for profits with a Shipley Donuts franchise may be attractive, it’s important to consider the significant upfront investment required and ongoing fees. However, the Average Unit Volume (AUV) of $400,000 suggests that the franchise can potentially be profitable for those who are willing to put in the hard work and meet the requirements. Ultimately, careful analysis of the franchise agreement and financial projections can help determine if Shipley Donuts is a worthwhile investment.
Conclusion: Should You buy a Shipley Donuts franchise for sale?
In conclusion, investing in a Shipley Donuts franchise can be a lucrative opportunity for those who are willing to commit the time and resources needed to succeed. With over 80 years of experience and a strong reputation for quality, the company offers franchisees extensive support and exclusive territories to operate in. However, the high initial investment and ongoing fees may be a barrier to entry for some potential franchisees. It’s important to carefully weigh the costs and benefits, including the potential for profitability with an AUV of $400,000, before deciding to invest in a Shipley Donuts franchise. Overall, with the right location, marketing strategy, and dedication, a Shipley Donuts franchise has the potential to be a successful business venture.
Entrepreneurs who want to open a franchise in the food and beverage category franchise opportunities categories can look at
- Twisted Sugar Franchise
- SomiSomi Franchise
- Ice Cream Delight Franchise
- Insomnia Cookies
- Nothing Bundt Cakes Franchise
- The Crumbl Cookies Franchise
- Great American Cookies franchise
- Millies Cookies Franchise
- Cookie man franchise
- Auntie Anne’s Franchise
- Black Rifle Coffee Franchise
Frequently Asked Questions (FAQs)
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Is the Shipleys Donuts franchise profitable?
The Average Unit Volume (AUV) of $400,000 suggests that the franchise can potentially be profitable for those who are willing to put in the hard work and meet the requirements.
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Can you make money owning a Shipley’s Donuts?
It is difficult to estimate the exact amount that the brand’s franchise owners make, as it depends on various factors such as location, competition, franchise fees, operating costs, and other economic factors. However, we can make some rough estimates based on the Average Unit Volume (AUV) of this franchise, which is $ 400,000.
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Is Shipleys Donuts a franchise?
Yes, Shipley Donuts is a franchise opportunity. The company offers interested investors the chance to open their own Shipley Donuts outlet location, with the support of the company’s established brand, business systems, and training programs.
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How much is a Shipleys Donuts franchise?
The initial investment required to open a Shipley Donuts franchises ranges from $525,000 – $1,239,500, depending on various factors such as location, size of the unit, and other expenses.
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How do the Shipleys Donuts franchise make money?
Shipley Donuts franchisees make money by selling high-quality, handcrafted donuts, kolaches, and coffee to customers at their franchise locations, generating revenue through sales.
