This annual list of the best donut franchises was posted on September 17, 2022.
It’s not just Homer Simpson who loves a donut. Around 10 billion donuts are made in the US every year and consumed by over 200 million donut consumers. Donuts have become such an important breakfast and snack food that they represented over 20% of total pastry sales in 2015.
This has produced a powerful industry including a large number of franchised stores. Donut stores in the US are worth $7.5 billion per year, as of 2022. They employ over 100,000 staff in over 13,000 businesses.
The industry has seen significant growth in the past decade. It rose from $5.5 billion in 2012 to $7.5 billion in 2019. The COVID-19 pandemic put a dent in this value, and it’s taken the industry two years to recover, but it’s now back to where it was pre-pandemic, if not slightly ahead. Annualized growth of 0.8% over the past five years doesn’t reflect the true strength of the industry, which is recovering well from a significant setback. Globally, the industry is expected to see 4% annualized growth through to 2025, with North America making the largest contribution to the industry’s revenues.
Franchises are in a powerful position to hop onto this trend, as consumers instinctively head for stores whose names they recognize. 87% of donut consumers buy them at national chains, including franchises.
High levels of coffee consumption are helping to fuel the growth of donut stores. Coffee sales are increasingly important for donut stores as they try to attract more customers and to make bigger sales to each person who walks through the door. Nearly 40% of donuts are paired with coffee, as customers who pop in for one product also buy the other.
Donut stores have relatively stable revenues and are less vulnerable to an economic downturn than some other discretionary goods. Because of the low costs of a donut, it’s the sort of treat that people are likely to keep consuming even during hard financial times. If the economy struggles over the next few years, as seems likely, then this will have a negative effect on donut franchises, but less so than on some other sectors.
Regardless of which way the economy goes, there are opportunities for donut stores. Hectic lifestyles have contributed to the growing sales of foods like donuts, thanks to stress eating and cravings for comfort food. According to the US Department of Agriculture (USDA), Americans prefer foods that require little preparation, leading to an increase in the consumption of convenience foods. Donuts take no preparation by the consumer and feel like a substantial treat, making them an ideal food for modern America.
Growing awareness of allergies and increasing customer consciousness about the ingredients in food have led to a diversification in the products that the donut industry offers. Gluten-free, dairy-free, and nut-free options are increasingly common, letting more people eat donuts and offering a way for businesses to market to a wider audience. 77% of consumers are interested in healthier donut options, and this has created another way for franchises to market themselves. Health consciousness could theoretically push donut consumption the other way, as people reduce the number of unhealthy foods they eat, but there’s little sign yet of this significantly affecting the industry.
A growing range of flavors and fillings has also contributed to the growth of the industry. Novelty and variety keep consumers coming back regularly. They pick out favorites to eat repeatedly or return to the same store to try its full range. Some chains are now focusing on that variety and on an ever-changing menu to keep customers engaged. This is a convenient way to get less popular flavors off the shelves in favor of something new.
Donut outlets are a fragmented market, with few dominant players, meaning that there’s plenty of space for new franchise outlets to find a foothold. If you’re interested in a food franchise with a relatively stable economic outlook, then donuts could be for you.
The Top 10 Donut Franchises of 2022
1. Dunkin’
Dunkin’ is without doubt the king of donut franchises. Brand loyalty is what continues to fuel their motto, America runs on Dunkin’. Many fans can be counted on to stop at Dunkin’ seven days a week, twice a day. In fact, Dunkin’ has earned the number-one ranking for brand loyalty in the coffee category by Brand Keys for 14 years in a row. Highly concentrated in the northeastern states, the chain’s continued growth is steadily marching westward.
The company also started rolling out its Next Gen location design back in 2018, which includes greener features that make each one 33% more energy-efficient than previous stores. The latest location to get the Next Gen makeover is the original location where it all started more than 70 years ago in Quincy, Massachusetts.
Dunkin’ sells 3.3 billion donuts and donut holes (Munchkins) every year, with 70 varieties available. The company has also kept up with digital trends. Most stores have dedicated mobile order pickup areas, and its mobile app has been downloaded 12.7 million times.
Founded by Bill Rosenberg in Quincy, Massachusetts in 1950 and franchising since 1957, the number of locations has continued to climb in recent years from 10,200 in 2012 to the current total of 12,957 (up from the previously reported total of 12,800), of which none are company-owned and 3,713 are located outside the US.
2. Tim Hortons
Tim Hortons is the largest quick-service restaurant chain in Canada. It started out as Tim Horton’s Donuts, and although “donuts” was later dropped from the name (along with the apostrophe), the breakfast treat remains an important part of the menu. While the company’s presence throughout Canada is huge, it has yet to get a strong foothold in the US beyond its 637 locations largely clustered in states bordering the Great Lakes region (New York, Pennsylvania, Ohio, and Michigan).
With the rise in popularity of iced coffee, the chain’s inability to come up with a lid that doesn’t leak has been an amusing and frustrating preoccupation of many customers. On a brighter note, the company still sets aside a week in September each year for its Smile Cookie campaign. The treats are available at $1 each and 100% of the proceeds are donated to specific local and regional charitable organizations, most of which are focused on serving the needs of children.
Founded by legendary Canadian hockey player Tim Horton and his business partner Jim Charade in Ontario, Canada in 1964, according to the parent company’s annual report, at the end of 2021 there were 5,291 locations (up from the previously reported total of 4,949), of which four were company-owned and 4,654 are located outside the US.
3. Krispy Kreme
Krispy Kreme fans are fiercely loyal about what they perceive as the superior quality of the chain’s doughnuts, and they have a point. The brand’s classic Original Glazed Doughnut recipe emerged in 1937, and while the recipe was tweaked a bit in the early years, it hasn’t changed since 1945. After all, you don’t mess with perfection, right? The secret is in the glaze, as well as frying the doughnuts (a true doughnut should never be baked).
Freshness is also a key to quality, which is why the doughnuts Krispy Kreme makes available for sale in grocery stores simply aren’t as good as a truly fresh doughnut. Aware of the 12-hour freshness window, most locations have two batches made per day, one in the early morning and another produced mid-day. Many locations feature a Hot Light. When it’s on, it means a fresh batch of doughnuts is available. In the digital age, there is an app for that to alert fans when the Hot Light is on.
Founded by Vernon Rudolph in Winston-Salem, North Carolina in 1937 and franchising since 1947, the number of locations has grown in recent years from 711 in 2012 to the current total of 1,600, of which 971 are company-owned and 1,227 are located outside the US and Canada.
4. Shipley Do-Nuts
Shipley Do-Nuts takes a fun approach to serving up more than 60 varieties of its self-styled do-nuts. Customers who have trouble deciding what to get can spin the chain’s online do-nut-doohickey and see what they land on. The chain’s secret do-nut mix is a blend of whole wheat and potato flour.
Something that sets Shipley apart from other donut chains is their devotion to kolaches, their form of the Czech klobasnek pastry in which a filling (meat, cheese, eggs, etc.) is baked into kolache dough to create a savory finger food like a sausage roll or pig-in-a-blanket.
The company has also turned its name into an acronym (SHIPLEY) standing for all its core values: service, hospitality, integrity, passion, leadership, energy, and yummy!
Founded by Lawrence Shipley in Houston, Texas in 1936 and franchising since 1987, the number of locations has expanded in recent years from 289 in 2012 to the current total of 335 (up from the previously reported total of 332), of which 11 are company-owned and all are located in the US.
5. Duck Donuts
Duck Donuts and its lovable duck mascot, Ollie, have been serving up made-to-order donuts since 2006. It starts with their signature vanilla cake donut made fresh throughout the day as customers place orders. Patrons can then go plain or select a coating (cinnamon sugar, powdered sugar, glazed, or icing – chocolate, vanilla, strawberry, peanut butter, maple, lemon, blueberry). Next up is selecting the desired topping (rainbow sprinkles, chocolate sprinkles, graham cracker crumbs, chopped peanuts, chopped bacon, shredded coconut, Oreo cookie pieces). Finally, customers can have a drizzle applied to their creation (hot fudge, marshmallow, salted caramel, raspberry). Donut lovers can also choose various seasonal favorites and fan favorites.
Founded by Russ DiGilio and Robin Griffith in Duck, North Carolina in 2006 and franchising since 2013, the number of locations has quickly grown from 8 in 2014 to the current total of 113 (up from the previously reported total of 105), of which one is company-owned and two are located outside the US.
6. Peace Love & Little Donuts
is a donut chain with a distinct hippie branding vibe, and they are in fact smaller than a standard donut, which many fans say is the perfect size. They’re also very creative with their Funkadelic, Far Out, and Groovy flavors.
In the Funkadelic category, customers will find many standards, along with funky creations like Banana Crunch, Choco Pancake, Dirt, Fruity Pebbles, and Magically Delicious. Funkadelic flavors with nuts include Buttafinga, PB&J, Snick Jagger, and Shaka Pecan, among others. Far Out frostings include banana, chocolate, lemon, maple, raspberry, mocha, strawberry, and vanilla. Groovy coatings include cinnamon sugar, ginger sugar, honey glazed, powdered sugar, maple sugar, and Saigon cinnamon.
Founded by Ron and Marci Razete in Pittsburgh, Pennsylvania in 2009 and franchising since 2016, the number of locations has quickly grown to 30 (up from the previously reported total of 28), of which three are company-owned and all are located in the US.
7. Randy’s Donuts
Randy’s Donuts is an icon of Los Angeles culture because of the giant rooftop donut on the original location dating back to 1952, which has appeared in various movies and is sometimes a stopping point for movie stars and other celebrities. Only recently has the franchising program been rolled out, and locations are springing up throughout southern California, as well as internationally in South Korea, the Philippines, and Saudi Arabia.
There are 57 varieties of donuts listed on the menu, some of which are quite creative. They’re also all made by hand by a team of bakers, not machines, which is quite a feat given the flagship location sells upwards of 13,000 donuts each day!
Founded in Los Angeles in 1952 but only franchising since 2019, the number of locations currently stands at 20, of which seven are company-owned and nine are located outside the US.
8. Hurts Donut Company
Hurts Donut Company was started on a wing and a prayer. There was a running joke between Tim Clegg and his wife about her donut addiction. He said it would be cheaper to just open their own donut shop to support her habit. Then they decided to do it, buying all their equipment on Craigslist and teaching themselves how to make donuts from YouTube videos, literally the day before they opened for business, with a whopping $7 left in their bank account. Needless to say, they’re quite happy with how the company has grown since then.
The menu features more than 70 different fanciful oversized varieties with names like Andes Mint, ET, English Gentleman, White and Nerdy, Cotton Candy, and many more. They also occasionally offer gluten-free donuts.
Founded by Kas and Timothy Clegg in Springfield, Missouri in 2013 and franchising since 2015, there are now 20 locations (down from the previously reported total of 23), of which two are company-owned and all are located in the US.
9. DonutNV
DonutNV is an on-the-go franchise where the mobile unit makes and sells hot, fresh mini donuts, taking advantage of the explosion in food truck popularity in recent years. With a mobile operation, franchisees are free to book as many events (fairs, carnivals, parties, corporate events, sporting events, and so on) as they desire and work local community locations as a food truck on non-event days. Flexibility to operate as much or as little as a franchisee wants is very appealing to many.
In addition to mini donuts, locations also produce fresh-squeezed lemonade, bagels, and bagel sandwiches.
Founded by Alex and Amanda Gingold in Pennsylvania in 2014 and franchising since 2018, there are currently 12 locations (up from the previously reported total of five), of which one is company-owned and all are located in the US.
10. Doughnuttery
Doughnuttery is another hot, fresh, mini-doughnut chain, but what sets them apart is their proprietary sugar blends made with high-quality local and exotic ingredients. This allows them to create many fun and delicious flavors, and customers get to see it all happen. With many of the classic donut flavors on tap, customers will also find some intriguing concoctions, including Coco Mint Pattie, Chai Me to the Moon, Coco Loco, Flower Power, Purple Pig, Bam Berry, Spicey Rooster, House of Cardamom, and Pumpkin Pie Brûlée, among others.
Founded by Evan Feldman in New York City in 2012 and franchising since 2018, there are currently 5 locations (down from the previously reported total of 7), of which four are company-owned and all are located in the US.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.
