According to research by IBISWorld, donuts are a growing industry. The rate of growth averages 2% per year, according to IBISWorld information. It is one of the more profitable food businesses. Revenue is steady and has low volatility.
However, there is a lot of competition. In many metropolitan and high-traffic areas there is an over-saturation of donut shops — either franchise or independent. So you must choose locations carefully and just as carefully, read the disclosure document. The disclosure document should let you know how your territory will be protected.
Most donut franchises charge a royalty fee of 6 or 7% on gross sales. The royalty fee may be taken before or after taxes. Again, this should be part of the franchise disclosure document.
And you may need the advantage of unusual offerings and eye-catching branding.
Related reading: How to Open an Artisan Donut Shop.