Shipley Do-Nuts Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Shipley Do-Nuts is a Texas-born franchise serving fresh-made donuts, kolaches, and coffee. Franchisees run early-morning shops with drive-thru and walk-in service, managing high-volume donut production and staffing.
FranchiseVerdict summary · 2026
A Shipley Do-Nuts franchise requires a total initial investment of $503K – $1.0M, including a $40K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $928K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 27 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $503K – $1.0M
- 41st pct Retail
- Avg gross sales
- $928K
- 14th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 366
- 38th pct Retail
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail avg · 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
- Total investment $503K – $1.0M including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $928K/year (median $849K), with an estimated 22% cash-on-cash return (based on EBITDA).
- Verdict A (Strongest tier), verdict score 81/100 (higher is better). SBA loan charge-off rate of 0.0% across 27 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Shipley Franchise Company LLC
- Parent company
- SDC Holdco, LLC
- Ultimate parent
- SDC Parent, LLC
- Predecessor
- Shipley Franchise Company (Texas S corporation)
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Flynn Dekker
- Incorporated in
- Delaware
- HQ
- 55 Waugh Dr. Suite 1200, Houston, Texas 77007
- Auditor
- Weaver and Tidwell, L.L.P.
- Audited financials
- Franchisor revenue
- $13.7M
- vs $17.4M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Flynn Dekker
- Headquarters
- TX
- Founded
- 1957
- FDD year
- 2025
- States available
- 12
Can you afford it, and what does the money buy?
Entry cost runs 86% above the typical retail franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown14 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Travel and Living Expenses While Trainingnot refundable | $1K | $10K | |
| Lease Deposits/Payments | $8K | $20K | |
| Equipment, Furnishings, Technology and Computer Systems, including POS Systemnot refundable | $134K | $231K | |
| Leasehold Improvementsnot refundable | $219K | $511K | |
| Signagenot refundable | $15K | $65K | |
| Opening Inventory - Food Itemsnot refundable | $20K | $30K | |
| Opening Inventory - Non-Food Itemsnot refundable | $2K | $3K | |
| Grand Opening Advertising Campaignnot refundable | $20K | $20K | |
| Utility and Other Security Depositsnot refundable | $3K | $6K | |
| Insurancenot refundable | $1K | $2K | |
| Architectural/Legalnot refundable | $15K | $45K | |
| Business Licenses/Permitsnot refundable | $1K | $4K | |
| Additional Funds/Working Capital - 3 Monthsnot refundable | $25K | $40K | |
| Total initial investment | $503K | $1.0M |
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
- $503K – $1.0M
- Middle of category vs category
- Liquid capital req'd
- $25K – $40K
- Top 40% of category vs category
- Franchise fee
- $40K – $40K
- Top 40% of category vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
- Payback period
- 2.5 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $0 |
| Transfer fee | $20K |
| Renewal fee | $10K |
| Total fee load | 6.0% of rev |
A 6.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 8% below the retail norm.
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$84K
9.0% margin
Unlevered ROIC
10%
EBITDA / total invested capital
Payback
9.5 yrs
cash-on-cash, unlevered
Financial Performance
- Avg gross sales
- $928K
- Per unit, per year
- Median gross sales
- $849K
- Avg ebitda
- $301K
- Reported as EBITDA in FDD Item 19
- Cash-on-cash
- 21.7%
- Based on EBITDA / investment midpoint
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
- Sample size
- 318 units
- vs category median 47 · large
- Range (low → high)
- $181K→$2.8M
- Cohort dispersion (min → max)
- Quartile band
- $489K→$1.5M
- Bottom 25% → top 25%
- Transparency
- 10 / 10
- vs category median 3 / 10 · above
Compared against 307 Retail brands
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 $928K/year in gross sales. Revenue-to-investment ratio: 1.2x.
Fee burden
Total ongoing fee load of 6.0% — below the Retail average of 8.9%.
Disclosure
Transparency score 10/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 8.9% CAGR over 3 years across 366 units — operators are staying and new ones are joining.
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 Retail averages
How Shipley Do-Nuts Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 366
- Opened
- 24
- Last reporting year
- Closed
- 6
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.6%
- Company-owned
- 11
- Corporate units in the system
- % franchised
- 97%
- vs corporate-owned
- Net growth (3-yr)
- +8.9%
- Net unit change over 3 years
- 3-yr CAGR
- +8.9%
- Compounded over last 3 years
3-year detail · Item 20
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 17
- Projected new
- 48
- Franchisor's next-year forecast
- Transfer rate
- 4.6%
- Owners selling to other franchisees
- Termination rate
- 0.3%
- Franchisor-initiated terminations
- Ceased ops
- 1.6%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 27
- Loan volume
- $18.0M
- Median loan
- $666K
- average
- Charge-off rate
- 0.0%
- 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)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 19
- Defaults
- 0
Vintage analysis
Shipley Do-Nuts charge-off rate by loan vintage
Top lenders financing Shipley Do-Nuts franchisees
Showing 3 of 19 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.
Premium insight
SBA Lending Report
Deep-dive into Shipley Do-Nuts's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 8 states
- Startup risk premium and job creation velocity
Instant access. No subscription.
With a 0.0% charge-off rate across 27 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower 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
Seven litigation matters, but the franchisor is plaintiff in most (breach/trademark suits against former franchisees, with counterclaims), and financials are very strong (net worth $91.3M, net income $2.27M on $17.4M revenue). Across 366 units, 7 suits is moderate; no going-concern or bankruptcy. Litigation as plaintiff is the notable-but-modest concern.
Litigation (Item 3)
Shipley Franchise Company LLC and Shipley Do-Nut Flour and Supply Co LLC are involved in 4 pending litigation cases against former franchisees. Cases involve claims of trademark infringement, unfair competition, deceptive trade practices violations, and breach of contract. All defendants have filed counterclaims alleging wrongful termination and violations of the Arkansas Franchise Practices Act. Defendant counterclaims in 3 cases (Sonny Ros, Botny Heang, Llina Lab) have been dismissed by the Court. One case (Jeffrey Ek) is stayed due to defendant's Chapter 7 bankruptcy filing. Discovery is ongoing in active cases. Attorney fees of $7,607.80 were awarded in one case.
Bankruptcy (Item 4)
Disclosed in last 7 years
Jeffrey Ek (Grandpa's Donuts franchisee defendant) filed for Chapter 7 bankruptcy, resulting in automatic stay of litigation in Case No. 60CV-22-2903.
Audited financials (Item 21)
Yes · Weaver and Tidwell, L.L.P.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 81 / 100 verdict
- 01HIGH7 litigation matters (franchisor mostly plaintiff)
- 02MINORStrong financials: net worth $91.3M, net income $2.27M
- 03MINOR366 units (suits proportionate to size)
- 04MEDItem 19 disclosed, no going-concern
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.0% 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 | Radius |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 9 |
View Item 3 litigation summary
Shipley Franchise Company LLC and Shipley Do-Nut Flour and Supply Co LLC are involved in 4 pending litigation cases against former franchisees. Cases involve claims of trademark infringement, unfair competition, deceptive trade practices violations, and breach of contract. All defendants have filed counterclaims alleging wrongful termination and violations of the Arkansas Franchise Practices Act. Defendant counterclaims in 3 cases (Sonny Ros, Botny Heang, Llina Lab) have been dismissed by the Court. One case (Jeffrey Ek) is stayed due to defendant's Chapter 7 bankruptcy filing. Discovery is ongoing in active cases. Attorney fees of $7,607.80 were awarded in one case.
Items 10, 11
Training & Operations
- Classroom training
- 104 hrs
- On-the-job training
- 136 hrs
- Training location
- On-site and off-site
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
99 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Shipley Do-Nuts · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Shipley Do-Nuts franchise?
The total investment to open a Shipley Do-Nuts franchise ranges from $503K – $1.0M, 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 Shipley Do-Nuts franchise owners earn?
According to Item 19 of the Shipley Do-Nuts FDD, the average gross sales per unit is $928K. The median is $849K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Shipley Do-Nuts's franchise failure rate?
Based on SBA 7(a) loan data, Shipley Do-Nuts has a charge-off rate of 0.0% across 27 loans, meaning 0.0% 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 Shipley Do-Nuts franchise locations are there?
As of their most recent FDD filing, Shipley Do-Nuts has 366 total units in the United States, including 355 franchised units and 11 company-owned units. 24 new units were opened in the latest reporting year.
Is Shipley Do-Nuts a good franchise to buy?
FranchiseVerdict rates Shipley Do-Nuts as a A-grade franchise with a verdict score of 81 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.
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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.