Hurts Donut Franchise Cost, Profit, Payback Period 2024

Are you planning to own a Hurts Donut franchise and curious about what to expect? Hurts Donut is a quite popular donut shop, but it has a lot of competition, and it might not be certain whether it’s a good idea to open a Hurts Donut franchise.

If you are planning it and are looking for some answers as to whether it would be worth it, you are in the right place. In this article, we will go over everything about Hurts Donut’s franchise system, associated costs, training, and everything else you can expect.

Hurts Donut Franchise Cost

About Hurts Donut and Hurts Donut History

Hurts Donut is a fast-casual restaurant franchise specializing in donuts, offering a variety of them with headquarters in Missouri.

In addition to their donuts, they also offer pastries and beverages. Their donuts can be customized, gourmet, and classic traditional variations.

The company was founded in 2013 and started to franchise in 2015 to increase its exposure to the market.

Currently, they have over 20 locations, and over 90% of them are franchised. They are still offering franchises to interested parties with an established franchising system.


Franchise Model Table

Cost Or FeesAmount
Initial Investment      $502,000-$819,000
FranchiseYES
Franchising Since2015
Franchise-Fee$35,000
Royalty-Fee7%
Liquidity$250,000
Estimated Outlets20

How Much Does it Cost to Open a Hurts Donut Franchise?

The expected total cost for one Hurts Donut franchise is between $502,000 and $819,000. It includes things like equipment, payroll, real estate, a $35,000 franchise fee, construction, and any other potential startup costs.

These numbers are from the company’s FDD, and they came up with this number from past experiences and current prices. The actual number might vary depending on a variety of factors, such as the size and the location of the store.


Franchise Requirements

hurts donut franchise requirements

In the company’s FDD, there is no specific mention of having to have a professional background in the industry or as a franchise manager. Even though it is probably beneficial to have the related background experience, it doesn’t seem like it’s necessary.

On the financial side, the franchisees must showcase a minimum net worth of $500,000 and a liquid cash of at least $250,000. These are necessary requirements that the franchisees must meet.


Hurts Donut Franchise Profit & Revenue

According to the latest financial report published by Hurts Donut in their FDD, the company had a total revenue of $1.7 million in 2021. $1.6 million of it was gross profit, and they made a net profit of $670,000.

So, if we take the gross annual revenue of the Hurts Donut franchise as $1,056,500 and assume a profit margin of 15% as per the industry standard, then we can calculate that a Hurts Donut Franchise owner makes $158,475 in annual profits. Here’s how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1056500.00
Rent10.63%(112253.13)
Insurance5.31%(56126.56)
Salaries21.25%(224506.25)
Franchise Royalty Fees5.31%(56126.56)
Utilities2.13%(22450.63)
Cost of Goods Sold (COGS)26.56%(280632.81)
Labor (Variable)13.81%(145929.06)
Total (Expenses)85.00%(898025.00)
Net Profit15.00%158475.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Hurts Donut Franchise Overall Sales

In the same financial report, the company’s data show that a Hurts Donut franchised outlet had an average gross revenue of $1 million.

The highest-earning store made $1.5 million, and the lowest made $613,000, with the average being $1,056,500. About 37.5% hit or went above the average revenue.


Hurts Donut Franchise Payback Period

To find out the payback period of Hurts Donut franchise, have a look at this table below:

AVERAGE INVESTMENT$660,500
AVERAGE REVENUE PER OWNER$1,056,500
AVERAGE PROFIT PERCENTAGE15%
AVERAGE PROFIT PER YEAR$158,475
AVERAGE PAYBACK PERIOD4 Years

PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR

= 660500/158475 = 4.1, Approximately 4 years based on median.

The average investment for a Hurts Donut Franchise is $660,500.

With an average profit percentage of 15%, the average profit per year is $158,475.

This means that the average payback period for a Hurts Donut Franchise is 4 years, and the total investment of $660,500 would be recouped within this period.


Hurts Donut Franchise Training and Support

Hurts Donut Franchise Training and Support

There is an initial training before the opening and a continuous training that happens on a schedule after the opening. The initial training consists of 128 hours of on-the-job training, and the franchisee is given 136 pages of manual to learn. This training takes place in Springfield, in the franchisor’s location.

As part of the support package, there is quarterly training that aims to keep the franchisee and the managers up to date with the latest additions and technologies. The franchisor also helps with site selection, construction of the real estate, inventory, and finding suppliers. There is also marketing support that involves a majority of needed help for local marketing.


Terms of Agreement and Renewal

The initial term of the franchise agreement is for four years. Once the four years are over, the franchisee can renew the agreement for an additional 5-year term. The franchisee must give 120 days’ notice and sign a new franchise agreement for the renewal.


Obligations and Restrictions

Hurts Donut does not allow for absentee ownership. This means that the franchisee must always be present in the operation of the store. In certain cases, there could be a designated manager appointed that is approved by the franchisor.

The franchised outlet is also obligated to be open 24 hours, 7 days a week. In the store, only items approved and specified by the franchisor can be sold. No other product or service can be sold without prior approval.

Additionally, the items and products that Hurts Donut wants the franchisee to sell must be prepared and sold according to the specifications Hurts Donut outlines in the manual and the training.


Financial Assistance

Hurts Donut offers both direct and indirect financial assistance. Direct financial assistance only covers a portion of the franchise fee and is subject to certain requirements by the franchisor.

Hurts Donut works with third-party sources that can offer indirect financing for the startup costs and the franchise fee. Each source has its own system for granting the financing, and it is not guaranteed that the franchisee will get financial assistance.

Entrepreneurs considering a venture into the bakery franchise sector might explore options such as  Cinnabon Franchise, Panera Bread, Nothing Bundt Cakes, Swiss Farm, and 85 °C Bakery franchises.


Hurts Donut Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Duck Donuts$40,0005%$289,066-$474,991
Krispy Kreme$12,5004.5%$622,500-$1.7 million
Hurts Donut$35,0007%$502,000-$819,000

Conclusion

In the end, Hurts Donut offers a great franchise package both for first-timers and experienced entrepreneurs. They offer a comprehensive training and support system, offer both direct and indirect financial assistance, and have rather shorter terms of agreement. Additionally, the initial investment costs are somewhat low compared to other competitors.

The only issue is the saturated market with big names like Krispy Kreme or Dunkin’ Donuts. This depends on your local area, whether these big names are working there or not. Otherwise, Hurts Donut looks like a great opportunity.


FAQs

Who owns Hurts Donut?

Tim and Kas Clegg own Hurts Donut. The duo inherited the actual business from Tim’s father.

How many locations does Hurts Donut have?

There are about 20 Hurts Donut locations open right now. However, this number is constantly changing as new franchised outlets are opening all the time.

Where is the headquarters of Hurts Donut?

Sources

https://www.entrepreneur.com/franchises/directory/hurts-donut-company/336110#overview
https://www.franchimp.com/?page=pdf&f=108529_2022.pdf

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