Operations

Federal Donuts lands funding from Duck Donuts investor

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April 6, 2022

Federal Donuts, a Philadelphia-based fast casual brand serving donuts, fried Chicken and coffee, has received funding from NewSpring Franchise. The firm has invested in over 180 companies, including Duck Donuts, a 101-unit doughnut shop and will help Federal Donuts grow throughout the Mid-Atlantic area.

Founded in 2011 by five Philadelphians — Tom Henneman, Steve Cook, Michael Solomonov, Felicia D'Ambrosio, and Bob Logue — Federal Donuts has 11 locations, including those inside Whole Foods Markets and sports and entertainment arenas. By partnering with NewSpring, it will gain access to capital, infrastructure, technology and additional resources need to facilitate growth, said Henneman, who is also the CEO of Federal Donuts.

"In 2011 when Steve, Mike, Bobby, Felicia, and I bootstrapped this business on a quiet corner in South Philadelphia, we couldn't have imagined what Federal Donuts would become," he said in the release. "We have a product that people love and we love to serve. Since 2020, we've opened three beautiful new stores in Center City that we're really proud of. Taking this next step to partner with NewSpring will give us the opportunity to be a part of so many more neighborhoods and fulfill our potential."

The chain offers a solid culinary and customer experience with proven unit-level economics, said NewSpring Franchise General Partner Satya Ponnuru.

"Combined with the James Beard award-winning excellence Michael, Steve, and Tom bring to the table, the company is well-positioned to broaden its consumer demographic in new and existing markets through geographic and product expansion," he said in the release.

Henneman, Solomonov and Cook will maintain ownership in the business and will stay involved in strategic and day-to-day operations. As part of the transaction, Ponnuru, NewSpring General Partner Patrick Sugrue and Jeff Benjamin, the co-founder and COO of Vetri Management Corp, will join the Federal Donuts Board of Directors.