Dunn Brothers Coffee® Franchise Cost, Revenue & Review 2026
- Investment
- $456K – $799K
- Disclosed sales
- $600K
- gross sales, not profit
- SBA charge-off
- 23.1%
- on 30 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Dunn Brothers Coffee is a specialty coffee franchise that roasts beans in-store and serves espresso drinks and light food. Franchisees run the cafes, managing roasting, baristas, and counter service.
FranchiseVerdict summary · 2026
A DUNN BROTHERS COFFEE® franchise requires a total initial investment of $456K – $799K, including a $40K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $600K[2]. SBA 7(a) loans show a 23.1% charge-off rate across 30 loans[1]. FranchiseVerdict grade: F (Weakest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $456K – $799K
- 71st pct Service Resta…
- Avg gross sales
- $600K
- Outlet subset7th pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 48
- 64th pct Service Resta…
- SBA charge-off
- 23.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $456K – $799K including a $40K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $600K/year (median $570K) (reported for a subset of outlets rather than the whole system).
- RISKVerdict F (Weakest tier), verdict score 25/100 (higher is better). SBA loan charge-off rate of 23.1% across 30 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -5 franchised outlets in the latest year (1 opened, 6 closed) (Item 20).
- DECLINESystem contracting at -17.0% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Dunn Bros Franchising, LLC
- Parent company
- Dunn Bros Parent, LLC
- FDD Item 1, page 8 of the 2025 FDD
- Ultimate parent
- Gala Family, LP
- FDD Item 1, page 8 of the 2025 FDD
- Predecessor
- Dunn Bros Coffee Franchising, Inc.
- Prior franchisor entity
- CEO title
- Chairman and Chief Executive Officer
- Anand Gala
- Incorporated in
- DE
- HQ
- 5412 W. Plano Pkwy., Suite 100, Plano, Texas 75093
- Auditor
- Baker Tilly Advisory Group, LP / Baker Tilly US, LLP
- Audited financials
- Franchisor revenue
- $3.0M
- vs $2.7M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- DBC Gift Card
- Dunn Bros Alternative Channels
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1, page 8
1 other brand on this site name Gala Family, LP as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Anand Gala
- Headquarters
- TX
- Founded
- 2022
- FDD year
- 2025
- States available
- 7
Can you afford it, and what does the money buy?
Entry cost runs 29% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Architecture Design, Approval and Permit Fees | $5K | $26K | |
| Leasehold Improvements | $188K | $300K | |
| Sewer and Water Access Charge | $0 | $10K | |
| Prepaid Rent, Security Deposit, Utility Deposits, Business Licenses and Attorney Fees | $9K | $16K | |
| Furniture, Fixtures and Equipment | $151K | $293K | |
| Roaster and Associated Leasehold Improvements for Venting | $27K | $27K | |
| Travel Expenses While Training | $500 | $4K | |
| Opening Inventory | $9K | $12K | |
| Grand Opening Expenses | $10K | $10K | |
| Insurance Premiums | $3K | $7K | |
| Additional Funds - 3 Months | $15K | $54K | |
| Total initial investment | $456K | $799K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $456K – $799K
- Bottom third — review vs category
- Liquid capital req'd
- $15K – $54K
- Top 40% of category vs category
- Franchise fee
- $40K – $40K
- Middle of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $300 |
| Transfer fee | $20K |
| Renewal fee | $10K |
| Inventory (initial) | $9K – $12K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 38% below the quick-service restaurants norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for DUNN BROTHERS COFFEE® until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$662K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one DUNN BROTHERS COFFEE® unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $600K
- Per unit, per year
- Median gross sales
- $570K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales quartile
- Sample size
- 27 outlets
- vs category median 19
- Range (low → high)
- $309K→$1.1MCited, not corroborated — printed on page 48 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $366K→$854K
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 781 Quick-Service Restaurants brands
Revenue is only 1.0x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $600K/year in gross sales. Revenue-to-investment ratio: 1.0x. Reported for a subset of outlets rather than the whole system.
Fee burden
Total ongoing fee load of 8.0% (near the Quick-Service Restaurants median).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -17.0% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Dunn Brothers Coffee® Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 48
- Opened
- 1
- Last reporting year
- Closed
- 6
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 4
- Term expired, not renewed (per Item 20)
- Turnover rate
- 12.5%
- Company-owned
- 4
- Corporate units in the system
- % franchised
- 92%
- vs corporate-owned
- Net growth (3-yr)
- -17.0%
- Net unit change over 3 years
- 3-yr CAGR
- -17.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 4
- Transferred
- 3
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 2
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Indiana
- Michigan
- Minnesota
- North Dakota
- South Dakota
States where the franchisor is registered to sell new franchises (FDD registration filings).
Where the owners are · Item 20 owner list
43 current owners across 6 states; 6 former (terminated, transferred or not renewed) listed separately.
- MN 26
- IA 5
- SD 5
- ND 3
- WI 3
- MO 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 30
- Loan volume
- $10.3M
- Median loan
- $261K
- 50th percentile
- Charge-off rate
- 23.1%
- on 30 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 76.9%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 6
- Typical loan rate
- 5.6%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 509
- 5.0 per loan
- Lender concentration
- 30%
- top lender's share
Borrower mix: 22% went to startups / new businesses, 78% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Top lenders financing Dunn Brothers Coffee® franchisees
Showing 3 of 12 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Dunn Brothers Coffee® from SBA 7(a) FOIA data.
- Principal loss rate
- 11.1%
- Avg SBA guarantee
- 71%
- Avg interest rate
- 5.63%
- Avg chargeoff amount
- $190K
- Lender concentration
- 30.0%
- Job velocity
- 5.0 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 509
Top SBA lendersTop lender holds 30% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | American National Bank | 9 | $1.5M | 44.4% |
| 2 | Kensington Bank | 7 | $2.3M | 14.3% |
| 3 | Sunrise Banks National Association | 5 | $2.8M | 0.0% |
| 4 | Sunflower Bank National Association | 1 | $400K | 0.0% |
| 5 | Wells Fargo Bank National Association | 1 | $565K | 0.0% |
| 6 | MidWestOne Bank | 1 | $794K | 0.0% |
| 7 | Stearns Bank National Association | 1 | $450K | 100.0% |
| 8 | First Interstate Bank | 1 | $290K | 0.0% |
| 9 | KodaBank | 1 | $540K | N/A |
| 10 | Granite Bank | 1 | $135K | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| MNMinnesota | 27 | 6 | 26.1% |
| SDSouth Dakota | 1 | 0 | 0.0% |
| TXTexas | 1 | 0 | 0.0% |
| WIWisconsin | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 23.1% charge-off rate means roughly 1 in 4 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 23.1% — 44% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation required to be disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Baker Tilly Advisory Group, LP / Baker Tilly US, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited FY ended December 29, 2024. Total revenues $2,950,933 comprised of royalty income $1,194,751, marketing fees $730,203, franchise fees $353,767, rebate income $672,212; no separate other income in 2024.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 25 / 100 verdict
- 01MEDUnit decline of 10.2% year-over-year indicates shrinking franchise system despite mature brand
- 02MEDNet income not disclosed in Item 19 — inability to assess actual profitability or franchisee ROI
- 03MINORAverage revenue of $600k against $455k-$799k investment suggests thin margins with high failure risk
- 04MINORRoyalty escalation clause (5% to 6% for non-compliance) is punitive and indicates potential franchisor cash flow problems
- 05MED48 total units is extremely small system with limited support infrastructure and purchasing power
- 06MED10-year term locks franchisees into declining brand with limited exit flexibility
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 2 |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Plano, Texas (within 50 miles of franchisor's principal place of business) |
| Jury trial waiver | No |
| Governing law | TX |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 20 hrs
- On-the-job training
- 36 hrs
- Training location
- Plano, Texas, or a location we specify; new shop opening training at franchisee's Shop
- Ongoing training
- Required
- Time to open
- 10 mo
- From signing to launch
- Site selection
- Franchisee selects; franchisor approves
- Franchisor financing
- Not offered
- Item 10
- POS system
- Qu POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Qu POS System
Item 20 · call current owners
Franchisee Contacts
49 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a DUNN BROTHERS COFFEE® franchise?
The total investment to open a DUNN BROTHERS COFFEE® franchise ranges from $456K – $799K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do DUNN BROTHERS COFFEE® franchise owners earn?
According to Item 19 of the DUNN BROTHERS COFFEE® FDD, the average gross sales per unit is $600K. The median is $570K. Important context: Reported for a subset of outlets rather than the whole system. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns DUNN BROTHERS COFFEE®?
DUNN BROTHERS COFFEE® is franchised by Dunn Bros Franchising, LLC. Its parent company is Dunn Bros Parent, LLC. The ultimate parent named in the FDD is Gala Family, LP. Source: FDD Item 1, 2025 filing.
What is Item 19 in the DUNN BROTHERS COFFEE® FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the DUNN BROTHERS COFFEE® FDD and qualifies whose outlets they describe.
What is DUNN BROTHERS COFFEE®'s franchise failure rate?
Based on SBA 7(a) loan data, DUNN BROTHERS COFFEE® has a charge-off rate of 23.1% across 30 loans, meaning 23.1% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many DUNN BROTHERS COFFEE® franchise locations are there?
As of their most recent FDD filing, DUNN BROTHERS COFFEE® has 48 total units in the United States, including 44 franchised units and 4 company-owned units. 1 new units were opened in the latest reporting year.
Is DUNN BROTHERS COFFEE® a good franchise to buy?
FranchiseVerdict rates DUNN BROTHERS COFFEE® as a F-grade franchise with a verdict score of 25 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.