by Donut King
last updated 11/12/2019
by Donut King
last updated 11/12/2019
Donut King has opportunities for single stores and multi-unit operators around New Zealand
Everybody loves donuts, and Donut King has an extremely successful business model specifically designed for shopping centres,’ says Craig Watson. ‘There is currently a huge gap in the New Zealand market and we are in a hurry to get Kiwis with the same vision to fill it right now!’
Craig is the New Zealand master franchisee for Donut King, having taken up the role after 28 years in the shopping centre industry working in senior management roles at Westfield, and as Head of Leasing for AMP Australia & New Zealand. ‘That gave me a pretty clear idea of what works and what doesn’t work, and one thing I can tell you for sure – Donut King works!’
Martin Malcolm agrees. Martin has owned the Donut King in Palmerston North for five years and has seen his business grow and grow.
Martin started with the company as a part-time baker in its first New Zealand store, then found himself managing it, too. ‘When the existing Palmerston North store came on the market, I took a long hard look at it, saw the potential and we struck a deal.’
Learning from scratch
Martin admits he knew little about business when he took over his own store. ‘It had always been an ambition to own my own business, and joining Donut King was an ideal springboard. I know baking and food inside out, but I wasn’t really prepared for the business aspects – I knew very little about costings, bottom dollars, negotiating with suppliers etc. But Donut King made all that learning so much easier, gave me the tools, and I put them to good use. In fact, as well as running my own store I’ve also trained other new franchisees as they’ve come on board.
‘Donuts weren’t very big in New Zealand when I started but there’s been a massive expansion in awareness of the product in the last five years,’ Martin continues. ‘What is unique, and what I love about Donut King, is that everything is freshly cooked on site every morning – you’re not just serving a pre-cooked item that has been supplied centrally. Donut King has stuck to a proven formula of “fresh is best” and it’s paid off. Today, I have five full-time staff and a thriving business.’
In food retail, the trick is to combine a popular product with the right location – two factors that Craig says Donut King has got just right.
‘Walk into any of our stores and you’ll see a cabinet full of freshly-baked products from classic cinnamon donuts to iced cakes, glazed and novelty items. Then there are hot dogs, ice creams, drinks and character cakes from Disney, Pixar and Marvel to ensure we have something for all seasons and all ages from 3 up to 70-year-olds who want a nice treat and a coffee. Put those in the right location and the business can fly!’
The right location is something that Craig knows all about. ‘Getting the property part of the equation right 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.
‘The return depends on volume and, 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. It means that $100,000 extra turnover a year can result in $50,000 in extra profit. It’s a model that has been tried and proven all over Australia and New Zealand.’
No experience needed
To become a franchisee with Donut King you don’t need baking experience, says Craig. ‘We provide all the training you need to cook and present the product properly, with systems that make it a very easy business to manage. Most franchisees employ a baker so that they can concentrate on customer service and the financial side although some, like Martin, still like to do some of the baking themselves.
‘No matter whether you bake, serve at front of house or prefer the back office, you will need good communication skills as you’ll need to be able to switch roles, befriend customers and handle staff.’
You’ll also need an eye for opportunity. ‘Several of our Australian franchisees are now operating as clusters, with up to four or five units in key locations, and they are doing very well out of them indeed,’ says Craig. ‘So by starting with a single store, you can choose to grow a sizeable business. We’d love to discuss the potential with you, so contact me to find out more.’
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