Franchising

Shipley Do-Nuts boasting 23% lower investment costs, higher AUVs

July 1, 2024

Shipley Do-Nuts released its latest franchise disclosure document last week, outlining 23% lower investment costs and higher average-unit volumes and EBITDA, according to a company press release.

FDD highlights included:

• Lower investment costs: The chain is focused on in-line and endcap retail locations ranging from 1,400 to 2,100 square feet, reducing the total investment cost for potential franchisees. The 2024 investment range is now $496,400 to $1,029,000, representing a 23%-24% reduction in costs compared to the 2023 range of $655,000 to $1,339,500.
• Enhanced real estate flexibility: The approach offers greater flexibility in real estate options, which is particularly beneficial for markets targeted for expansion.
• Strong Profitability and AUVs: EBITDA profitability is projected at 18%-20%. The top 25% AUVs are reported at $1.4 million; Top 50% AUVs stand at $1.2 million.

In addition to posting strong unit performance numbers, Shipley has also added construction project managers, including Ryan Pullin, Shipley's director of design, and Korelle Dickson, who joined the company as construction project manager, to help franchisees.

"The construction phase can be a real pain point for franchisees, who don't typically have a strong background in the design and build part of the process," Shipley Senior Vice President of Franchise Development Keith Sizemore said in the release. "Ryan and Korelle, who often have more experience than the general contractor, can act as the franchisee's advocate to ensure that buildout is efficient and costs are kept lower."

With a focus on shorter timelines from signing to doors open, Shipley franchisees have recently opened shops in under eight months, substantially beating the industry standard of 12 months.

"Our focus on lowering investment costs, creating more flexibility in real estate and shortening our construction timelines is paying off for motivated franchisees who are opening units and seeing a strong return on their investment," Sizemore said in the release. "This is especially important as we seek to more than double our current footprint."

Founded in 1936, Houston-based Shipley Do-Nuts has over 360 company-owned and franchised restaurants.