Hurts Donut Company Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$502,000

-

$819,000

LOCATIONS

20

Emily

Updated

April 11, 2024

Is

Hurts Donut Company

a franchise?

Yes,
Hurts Donut Company
currently
accepts
franchise
applications

Hurts Donut Company, established in 2013, is headquartered in Springfield, Missouri. The franchise offers a unique twist on traditional donuts, providing a wide array of inventive flavors and toppings. Aspiring franchisees undergo a comprehensive application process, including training at the company's headquarters, ensuring they're well-prepared to operate their own Hurts Donut location.

Hurts Donut Company is an innovative and rapidly expanding franchise known for its unique approach to the traditional donut. The company was founded on November 17, 2013, by Tim and Kas Clegg, driven by Kas's love for donuts and the couple's entrepreneurial spirit.

Remarkably, they made their very first donut just twelve hours before opening their first store, with no prior experience in donut-making except for tutorials they watched on YouTube. They started with a shoestring budget, with less than $7 in their bank account, and have since expanded to 16 stores across the United States.

The brand distinguishes itself with its creative and unconventional donut offerings, which they describe as "the rebel of all donuts." Each donut flavor is considered a "love letter" to their customers, breaking the norms with non-uniform toppings and bold flavors. This distinctive approach has garnered a loyal following and significant growth for the company.

How many

Hurts Donut Company

franchises

are there?

In 2022, there were
20
outlets in
the United
States, of which
18
are franchises, and
2
are corporate-owned.

What are the

Hurts Donut Company

franchise

fees?

Advertising fee

2.00%

Initial Franchise Fee

The Initial Franchise Fee for a single unit is $35,000, payable upon signing the Franchise Agreement. For those opting for a Multi-Territory Addendum, the fee is $90,000 for three territories or $125,000 for five territories, provided they are purchased simultaneously.

Initial Training Fee

A fee of $10,000 is charged after the completion of the initial training at the franchisee's store, ensuring the franchisee is well-prepared to operate their franchise.

Display Cases

Franchisees are required to purchase two display cases for $6,000, which must be in place before the opening of the shop, to ensure a consistent customer experience.

Royalty

A weekly Royalty of 7% on Gross Revenues is payable every Monday, contributing to the ongoing support and development of the franchise network.

Marketing Royalty

In addition to the regular Royalty, a Marketing Royalty of 2% of weekly Gross Revenues is required, funding marketing and promotional efforts for the brand.

Training Fee

A Training Fee of $10,000 is charged, payable upon invoice, covering the cost of additional training sessions or support as needed.

Support Fee and Help Line Fee

For specialized support, a fee of $80 per hour is charged, providing access to expert advice and assistance when required.

Resale Fee

Before the resale of a franchise, a Resale Fee of $17,500 is payable, facilitating the transfer process and ensuring continuity of service.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Hurts Donut Company

franchise?

It costs between
$502,000
and
$819,000
to start a
Hurts Donut Company
franchise.
Type of Expenditure Amount
Franchise Fee $35,000
Rent & Security Deposit $10,000 - $15,000
Initial Training Fee $10,000 - $10,000
Leasehold Improvements $200,000 - $350,000
Architectural/Engineering $6,000 - $15,000
Opening Inventory and Food Ingredients $40,000 - $70,000
Equipment and Smallwares $125,000 - $175,000
Furniture $9,000 - $12,000
Computer Hardware, Software, and POS System $2,000 - $5,000
A/V Equipment $1,000 - $5,000
Vehicle and Wrap $10,000 - $15,000
Signage/Art Package $15,000 - $40,000
Insurance $7,000 - $12,000
Travel and Living Expenses to Attending Initial Training $2,000 - $5,000
Retail Merchandise $25,000 - $35,000
Total $502,000 - $819,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Hurts Donut Company

provide

training

to its

franchisees?

Yes,
Hurts Donut Company
provides
training

Hurts Donut Company provides comprehensive training for franchisees, designed to equip them with the necessary skills and knowledge to operate their store effectively.

Initial Training Program

The training program is conducted over three weeks and includes both classroom instruction and hands-on training at a designated training location in Springfield, Missouri, or at the franchisee's store. This program is led by experienced instructors Timothy Clegg, Kasondra Clegg, and Scott Bussard, who have significant experience in the field and with the franchisor.

Mandatory Orientation and Training Course

Franchisees and their Store Managers are required to attend a mandatory initial orientation and training course lasting up to 14 days, provided at the franchisor's headquarters or another designated training location. An additional training segment of up to 5 days is provided at the franchisee's store before and after the commencement of the Franchised Business.

Training Requirements

Franchisees and any Store Managers must attend and successfully complete the training program to the franchisor's satisfaction and obtain a certificate of occupancy from the applicable jurisdiction before opening an HDC Store. Training for franchisees who have purchased an existing HDC Store may be condensed based on their in-store experience. Training requirements may be waived for equity holders not responsible for store operations.

Continuing Education Programs

Hurts Donut Company may offer continuing education programs related to the operation or promotion of the HDC Store on an optional or mandatory basis. These programs might be offered by third parties who may charge a fee. Franchisees are responsible for any travel, lodging, meals, and other incidental expenses incurred during training.

Does

Hurts Donut Company

provides

territory

protection?

The Hurts Donut Franchise Agreement does not grant franchisees exclusive territorial rights. Franchisees are permitted to operate within a specified area but should not expect protection from other franchisees or company-owned outlets entering the same area.

The franchisor retains the right to establish additional franchises or other distribution channels within any franchisee's operational area, which may include direct competition from other Hurts Donut locations or through alternative distribution methods such as online sales.

This approach allows the franchisor flexibility in expanding the brand and opening new locations, but it means that franchisees may face competition from within the Hurts Donut network in their local market. Franchisees are encouraged to focus on delivering high-quality products and customer service to differentiate themselves and succeed in potentially competitive markets.

Can a

Hurts Donut Company

franchise

be run as

a passive

investment?

The Hurts Donut Franchise Agreement emphasizes the franchisee's active participation in the day-to-day operations of the business. The documents include an acknowledgment where the franchisee must agree that the success of the franchise largely relies on their abilities as an independent business person and their active involvement in daily operations.

This suggests that the franchisor expects franchisees to be hands-on in managing their franchise and does not explicitly endorse a purely passive investment model where the franchisee would not be involved in the day-to-day operations.

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