🍩 Want to Open a Donut Franchise But Need Capital?
You’re not alone. Starting a donut franchise can cost anywhere from $150,000 to over $500,000, depending on the brand, format, and location. While some investors are self-funded, many successful franchisees get started with external financing — including SBA loans, equipment leasing, and franchise-specific lenders.
In this guide, we break down how to secure financing for your donut franchise and what options are available for U.S.-based and international investors.
💼 Common Financing Options for Donut Franchises
1. 🏦 SBA Loans (Small Business Administration)
One of the most popular and accessible options in the U.S., SBA loans are backed by the government and designed specifically for small business owners — including franchisees.
Key Programs:
- SBA 7(a) Loan – Ideal for startup capital, equipment, and working capital
- SBA 504 Loan – Good for real estate or large fixed assets
Typical Terms:
- Loan amounts: $50,000 – $5 million
- Interest: ~6%–10%
- Terms: Up to 25 years
- Down payment: As low as 10%
✅ Best for: First-time franchisees with strong credit, U.S. citizens or residents
2. 💳 Franchise-Specific Lenders
Some lending institutions specialize in working with franchisees and understand the unique structure of franchising.
Top Franchise Lenders:
- Guidant Financial
- FranFund
- Boefly
- ApplePie Capital
These lenders often partner with franchise brands and can pre-qualify you based on the brand’s track record.
✅ Best for: Franchisees working with established brands like Duck Donuts or DonutNV
3. 🛠️ Equipment Leasing & Finance
Rather than paying upfront, many donut franchisees lease ovens, fryers, espresso machines, and other equipment.
- Low upfront cost
- Lease-to-own options available
- Faster approval than traditional loans
✅ Best for: Reducing startup capital or managing cash flow
4. 🏠 HELOC or Home Equity Loans
If you have home equity, you can borrow against it to fund your donut franchise.
- Low-interest rates (variable or fixed)
- Use funds as needed
- Requires personal asset risk
✅ Best for: Homeowners confident in the franchise’s return on investment
5. 🤝 Investor Partnerships or Friends & Family
Some franchisees raise funding by forming an LLC and partnering with investors or family members.
- Flexible arrangements
- Shared risk
- Consider equity vs. loan structure
✅ Best for: Multi-unit ambitions or early-stage investors
📊 Sample Investment Scenario (Duck Donuts)
| Expense Category | Approximate Cost |
|---|---|
| Franchise Fee | $40,000 |
| Equipment & Fixtures | $150,000 |
| Leasehold Improvements | $100,000 |
| Working Capital | $50,000 |
| Total Investment | $340,000 |
With an SBA 7(a) loan covering 80% of costs, your down payment might be as low as $68,000.
🔍 Tips for Securing Franchise Financing
- ✅ Have a credit score of 680+ (for best loan terms)
- ✅ Prepare a business plan with cash flow projections
- ✅ Highlight the strength of the brand you’re franchising with
- ✅ Get a Franchise Disclosure Document (FDD) from the franchisor
- ✅ Work with lenders familiar with franchise businesses
🌎 What About International Investors?
If you’re investing in a donut franchise outside the U.S., options include:
- Local small business loans
- Microfinance banks
- Government entrepreneurship funds
- Strategic partners for capital
Star Brands Consulting Group can help connect you with the right lenders or co-investors depending on your country.
⭐ How Star Brands Consulting Group Can Help
At DonutFranchiseMaster.com, powered by Star Brands Consulting Group, we guide investors through:
- Choosing the right brand
- Estimating realistic startup capital
- Connecting with trusted franchise lenders
- Structuring deals with minimal personal risk
📞 Need Help Finding Franchise-Friendly Lenders?
We’ve partnered with top U.S. and global lending institutions to make your funding journey smooth and secure.
👉 Contact Us to Apply or Get Prequalified »
🎁 Bonus Download
📥 “Franchise Financing Toolkit” – Includes SBA checklist, loan comparison sheet, and sample business plan template.