Shipley Do-NutsFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $503K – $1.0M
- 38th pct Retail
- Avg gross sales
- $928K
- 13th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 366
- 37th pct Retail
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Retail · color = vs category peers
Green = >15% above Retail avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 0.0% of 27 SBA loans charged off, well below the 16% franchise average.
Franchising since 1987. Systems this mature have refined operations and brand recognition.
Franchised units fell from 355 to 326 over 3 years. Investigate why operators are leaving.
39% cash-on-cash return (based on EBITDA). Above the 20% threshold most investors target.
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 39% cash-on-cash return (based on EBITDA).
- Verdict A (Top Quintile) with a risk score of 41/100. SBA loan charge-off rate of 0.0% across 27 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Shipley Franchise Company LLC
- Parent company
- SDC Holdco, LLC
- Ultimate parent
- SDC Parent, LLC
- CEO title
- Chief Executive Officer
- Flynn Dekker
- Incorporated in
- DE
- 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
Franchisees operate quick-service donut and coffee shops, managing daily production, customer service, inventory, and staffing. The model relies on early morning operations (high donut production volumes) and drive-through/walk-in retail sales, with ancillary beverage and breakfast item sales. Success depends on location quality, operational efficiency, and brand consistency across the 366-unit system.
- CEO
- Flynn Dekker
- Headquarters
- TX
- FDD year
- 2025
- States available
- 12
FDD Item 7 · 2025 filing · 14 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.
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
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $503K – $1.0M
- Better than avg vs category
- Liquid capital req'd
- $25K – $40K
- Better than avg vs category
- Franchise fee
- $40K – $40K
- Better than avg 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.
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
- 39.4%
- Based on EBITDA / investment midpoint
- Item 19 type
- gross_sales
- Sample size
- 318 units
- vs category median 49 · large
- Range (low → high)
- $181K→$2.8M
- Cohort dispersion (min → max)
- Quartile band
- $489K→$1.5M
- Bottom 25% → top 25%
- Transparency
- 10 / 5
- vs category median 2 / 5 · above
Compared against 304 Retail brands
vs Retail averages
How Shipley Do-Nuts Compares
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 (yr3)
- +5.3%
- Net unit change last year
- 3-yr CAGR
- +8.9%
- Compounded over last 3 years
3-year detail · Item 20
- 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
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 27 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Shipley Do-Nuts presents moderate-to-cautious risk: a mature franchise with slowing growth, active litigation signaling franchisee disputes, undocumented financial claims, and high capital requirements relative to net income reliability.
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 41 / 100 rating
- 01MINORSlow unit growth of only 5.3% YoY suggests market saturation or system challenges in a mature 366-unit chain
- 02HIGHMultiple active litigation cases including trademark infringement, breach of contract, and landlord disputes indicate franchisor-franchisee relationship tensions and operational control issues
- 03MINORNo Item 19 (Financial Performance Representations) available limits ability to validate the advertised $301,254 average net income across unit types and locations
- 04MEDHigh investment range ($503K-$1M) paired with modest 33% net margin leaves limited buffer for underperformance or economic downturns
- 05MINORTrademark infringement and deceptive trade practice claims suggest brand protection and compliance enforcement challenges
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 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 risk score of 41 out of 100, 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.
For franchisors
Are you the franchisor?
If you represent Shipley Do-Nuts, you can request corrections or provide updated information.
Claim this brandOther Retail franchises
Compare similar franchise opportunities in the Retail category
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.