by Donut King
last updated 22/07/2019
Make Your Life Sweet
by Donut King
last updated 22/07/2019
Donut King delivers smiles on the faces of customers and franchisees
Craig Watson worked in the shopping centre industry for 28 years with senior management roles at Westfield and as Head of Leasing for AMP Australia & New Zealand. That gave him a pretty clear understanding of what works and what doesn’t. So when it came to starting up his own business, he knew what he wanted – Donut King.
‘Everybody loves donuts, and Donut King has an extremely successful business model specifically designed for shopping centres,’ Craig says. ‘I’d seen a lot of franchisees do very well, so when I got the opportunity to take up the New Zealand master franchise for Donut King, I jumped at it. There’s such a gap in the New Zealand market – no-one was really doing the same thing in the shopping centre environment here, offering fun and tasty treats in the same way. We know our appeal – we’re a donut kiosk which serves coffee, not a café that serves donuts.’
Donut King opened its first store in Sydney in 1981. While the business model has gone through plenty of changes to keep up with the times, the brand has endured and grown. There are now over 300 stores globally, with 4 in New Zealand and more to come.
Proven in New Zealand
Taking on the master franchise in 2012, Craig opened the first three stores here himself before later franchising them as going concerns. ‘I decided the right way to do it was to put my own money into it first, test all the systems and establish the supply chains, and make sure the model worked as well in New Zealand as it has in Australia before asking franchisees to invest,’ he says. ‘That worked well: we’ve made operational and marketing tweaks over the years for maximum efficiency and profitability, and created a very solid proposition.’
How solid? ‘To give you an idea, our Palmerston North franchisee is someone we originally employed in our first store here. He graduated first to baker then to manager, then having seen for himself how well the system worked and how profitable it was, after two years he bought a franchise of his own.’
No experience required
To become a franchisee, you don’t need baking experience, says Craig. ‘We provide all the training you need to cook and present the product properly, and the systems make it a very easy business to manage. Most franchisees employ a baker so that they can concentrate on serving the customers and the financial side, but some do the baking themselves – it just means an early start. Whoever is serving needs good communication skills to befriend the customers, but some franchisees prefer to take on the back-of-house jobs.
‘The return depends on volume – once you are turning over more than $10,000 a week, you don’t have to staff up more and your fixed costs remain the same, so $100,000 extra turnover a year can mean $50,000 extra profit. We also encourage multi-unit ownership, with some franchisees in Australia operating up to four or five units and doing pretty well out of them.’
Right product, right place, right price
As always in food retail, the trick is to combine a popular product with the right location – two factors that Craig is happy Donut King can get just right.
‘People’s eyes light up when they see a cabinet full of freshly-baked products from classic cinnamon donuts to iced cakes, glazed and novelty items. We have something for all ages from three up, through university students and parents to 70-year-olds who want a nice treat and a coffee. Then there are hot dogs, ice creams, drinks and character cakes from Disney, Pixar and Marvel – even Star Wars. Put those in the right location and the business can fly!’
The right location is something that the vastly-experienced Craig knows all about. ‘Apart from a network of contacts I understand the property part of the equation and that can make a big difference – not just in getting the best site but doing the best deal. The investment for a fully-equipped turn-key kiosk is around $280,000 +gst, but with purchasing power and landlord contributions, it’s possible for under $200,000 in some places, and some of that can be financed.
‘That includes finding the site, lease negotiation, design, council and franchise fees, fit-out, equipment and all the training you’ll need to be able to run a profitable business. We also provide opening support to ensure you get off to the best possible start.’
Prime sites available now
Donut King is now looking for franchisees for carefully-chosen locations all over New Zealand. ‘We have sites ready to go in Auckland, Wellington, Christchurch, Queenstown and Dunedin, and other opportunities, too,’ says Craig.
‘If you would like to find out more about joining an enduring brand with a proven and stable business model, we would love to connect with you and discuss the opportunity.’
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