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]. 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
- 42nd pct Retail
- Avg gross sales
- $928K
- 13th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 366
- 39th pct Retail
- SBA charge-off
- N/A
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
- COSTTotal investment $503K – $1.0M including a $40K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $928K/year (median $849K), with an estimated 22% cash-on-cash return (based on EBITDA $301,254 / EBITDA % 20.5%).
- RISKVerdict A (Strongest tier), verdict score 78/100 (higher is better).
- FLAGBankruptcy 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
- $17.4M
- vs $13.7M 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%
- typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
- Payback period
- 4.6 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 |
| Inventory (initial) | $22K – $33K |
| 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 land near the retail norm.
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 Shipley Do-Nuts 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
$797K
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
FDD-reported earnings
The FDD reports $301K as EBITDA $301,254 / EBITDA % 20.5%. This is a disclosed figure, not our estimate — we publish no modelled profit for Shipley Do-Nuts.
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 Shipley Do-Nuts 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
- Avg gross sales
- $928K
- Per unit, per year
- Median gross sales
- $849K
- Avg ebitda $301,254 / ebitda % 20.5%
- $301K
- Reported as EBITDA $301,254 / EBITDA % 20.5% in FDD Item 19
- Cash-on-cash
- 21.7%
- Based on EBITDA $301,254 / EBITDA % 20.5% / 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
- 309 outlets
- vs category median 46 · large
- Range (low → high)
- $181K→$2.8M
- Cohort dispersion (min → max)
- Quartile band
- $489K→$1.5M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 10 / 10
- vs category median 3 / 10 · above
Compared against 278 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 9.0%.
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 12 · 12 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
12
states with franchisees (per FDD Item 12)
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
- N/A
- no resolved loans yet — rate needs a terminal outcome
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.
What could kill this investment?
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)
Franchisor total revenue reflects Royalty fees, Marketing cooperative, Franchise fees, and Other revenues per audited income statement (in $000s, converted to dollars).
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 78 / 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 |
| Termination groundsℹ | 17 |
| Curable defaultsℹ | 3 |
| 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
- Ongoing training
- Required
- Site selection
- franchisee proposes, franchisor approves
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
394 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 Item 19 in the Shipley Do-Nuts 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 Shipley Do-Nuts FDD and qualifies whose outlets they describe.
What is Shipley Do-Nuts's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Shipley Do-Nuts (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
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 78 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
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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.