Donut King- Low Res

8/3/2019 Donut King- Low Res

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Over 30 years of customer satisfaction

and growth

Brand Franchise Opportunity



Table of contents

A message rom the Managing Director, Mr. A.J. (Tony) Alord ............................................ 3

Introduction to Donut King .............................................................................................................. 4

Advantages o a Donut King Franchise ....................................................................................... 5

Donut King Support System ........................................................................................................ 12

Are you ready to take the wheel? .............................................................................................. 13

Want to join the Donut King team? ........................................................................................... 14

Frequently Asked Questions........................................................................................................ 27

Happy Franchisees ........................................................................................................................ 29

Contact ............................................................................................................................................. 30

1



2



A message from theManaging Director

Mr A J (Tony) Alford

3

Dear Prospective Franchisee,

Retail Food Group is the ultimate owner o the Donut King, Brumby’s,

Michel’s Patisserie and bb’s cae ranchise systems throughout

Australia and New Zealand.

On behal o Retail Food Group, and the Donut King ranchisor, we

welcome the opportunity to introduce ourselves and our proven

ranchise systems and thank you or your inquiry.

Since its inception in 1989, Retail Food Group has successully grown

rom a small ranchisor with less than 50 stores to become one o the

largest Australian ranchisors with our (4) ranchise systems, boasting

in excess o 1050 stores.

Each o our ranchise systems oers an opportunity to embark upon a

unique ood retailing experience.

We are o the opinion and belie that our systems are some o the most

respected systems in Australasia, remaining unsurpassed in terms o

being ully-integrated ranchise systems, all oering quality products

and market leadership in each o the brand’s our target markets.

We attribute this to the ongoing dedication and loyalty o our ranchisees

whose businesses are nurtured by a ranchisor who provides business

education, marketing and operational systems as well as ongoing,

continually improving support systems which have been developed,

enhanced and maintained over many years.

This development increasingly takes advantage o group economies

and synergies which a large ranchise network can command.

The commissioning o a retail business is the culmination o an individual

or amily ‘dream’ o becoming an ‘entrepreneur’ and controlling your

own nancial destiny. Assuming control o one’s nancial destiny

however, also involves a degree o risk which varies according to both

the type o business participation as well as the risk aversion prole

o the individual.

The resolve to become a small business owner involves the consideration

o many issues other than purely nancial aspects. To protably and

productively conduct a retail business, there are two other important

investments, apart rom the nancial, which require determination:

• Lifestyleinvestment–thetime,commitmentanddedicationneeded

to successully conduct the business; and

•Emotional investment – the investment in such a business will,

almost without exception, have an impact upon or eect on more

than one person.

We are o the opinion that Retail Food Group has assembled our quality

ranchise systems, where a buyer can thoroughly investigate the rightsystem and business or themselves, to ensure they;

a) satisy their nancial, liestyle and emotional investment criteria, while

b) acknowledging the risk which is present in any business pursuit.

From our perspective, we are desirous o procuring ranchisees who

display a genuine capacity and capability o contributing to the ongoing

enhancement and growth o the relative system they join.



4

Ideally, a ranchisee will possess the ollowing personal attributes:

•CommunicationSkills

•Honesty

•Integrity

•PositivePersonality

•Self-Motivation

•FinancialCompetence

•Goal-Oriented

•LeadershipQualities

•TeamPlayer

I we have just described your personality, outlook and aspirations we

seriously encourage you to consider the benets and advantages o

investing in one o our proven-quality ranchise systems.

Those personal attributes, when combined with our strong group

identication, excellent product ranges, comprehensive initial training

programmes, access to the extensive resource bases as well as the

ongoing support that each o our ranchise systems oer, provides a

substantial platorm rom which ranchisees can strive or and achieve

business, nancial, liestyle and emotional wellbeing or “success”.

Success is a term too oten used and, in our belie, neither well-dened

nor understood. Success as a ranchisee is measured and determined by

reerence to the degree by which your actual perormance matches all

those benchmarks previously established or your business.

Success thereore, rom our perspective, is the degree by which the

ranchised operation can, and does, assist you in the achievement o your

personal goals and aspirations.

The majority o people work and become business owners to assist in the

achievement of non-businessobjectives – thoseobjectives areusually

ocused around liestyle and amily. Put another way, the achievement o

liestyle and amily goals will almost always be related to the success o

your ranchised operation.

Every person involved in a Retail Food Group ranchise system has made a

signicant investment, whether it be monetary, emotional or other means.

We are condent that the systems which Retail Food Group has developed

and assembled over the past 19 years can assist you not only in protecting

your various investments, but assisting you to prosper in what is a very

competitive industry.

Finally, we consider that the acquisition o a Retail Food Group ranchise is

not just a means to achieving liestyle, nancial and emotional objectives

–itwillbecomepartofyou.

Yours Sincerely

A J (Tony) Alord

Managing Director / Chie Executive Ocer

RETAILFOODGROUP(AUSTRALIA)



Introduction to Donut King

5

The rst Donut King store was opened in Sydney in 1981 and

the concept was shortly thereater developed into a rudimentary

ranchise system.

The Donut King Franchise system has since evolved into a network

o over 310 stores throughout all Australian states and territories, the

vast majority o which are owned and operated by ranchisees.

The Donut King System is generally concerned with the retail sale

o specialty donuts (yeast and cake), espresso coee, hot and cold

beverages, signature quakeshakes, sot serve icecream, breakast

toasts and hot dogs.

In 2007 Retail Food Group established a Central Manuacturing Facility

(or CMF) to service the donut product needs o its ranchisees and

deliver urther liestyle benets to store owners. The CMF program is

now being rolled out throughout Australia.

DonutKingSystemPtyLtdACN097339645istheFranchisorofthe

Donut King ranchise system.



6

Advantages of Donut King

Franchise

Specialty ood retailing has expanded rapidly as consumers demand

more convenience, choice and value. The number o new brands and

systems is testament to this growth.

However, with growth comes complexity. Certain parts o the

category are crowded with many stand alone stores, chains and

international brands all vying or a piece o the market. Thus marks

theDonutKing difference– a simpleproduct with ahefty prot

margin which is easily produced and allows or multiple sales and

marketing opportunities.

As a treat the world over, donuts appeal to people o all ages and

demographics. Their simple style and easy acceptability makethem the cornerstone o the Donut King System. When combined

with a range o complementary products, the major strength o the

Donut King system can be seen easily as operational simplicity and

consumer acceptability. The Donut King brand, image and products

have all developed over many years into a powerul retail entity. The

brand itsel enjoys over 90% consumer recall!

Market research has proven that our popularity is not segregated to

one or two consumer groups but in act pervades all ages and spends.

The unique dierence o a Donut King outlet is easily identied and

attractive to our consumers.

The fexibility o our store design means that, through minor

modications, it can be easily adapted to a broad range o locations.

So, be it a small kiosk or large in-line shop with tables, our operational

needs can be met.

Our growth and the strength o our brand ensures that Donut King

remainsasoughtaftertenant–providingopportunityinthehighly

competitive retail leasing market.

The simple production o the donut oer means ranchise owners are

able to ocus more time on systematically growing their businesses

using local knowledge, strategic area marketing and excellent

customer service.

Donut King is a happy place to shop or anyone, oering a rangeo donut products along with signature cold drinks and ice creams

as well as a tasty range o hot dogs. Donut King easily translates

the ocus o the business - an aordable place or singles, groups

or amilies, young, old or in between to indulge in one o lie’s little

rewards or treats anytime.

Add to this reshly ground coees and designer hot beverages and

the Donut King ormula starts to take shape.

As a business package, Donut King is the “King” o opportunity

providing all support systems, marketing and operations manuals

and training along with ongoing eld advice and coaching to assist

ranchisees.



BUSINESSDEVELOPMENTMANAGER(BDM)

The Business Development Manager is your constant business coach

and mentor throughout your time with Donut King. They will assist

inmanaging, marketing and operatingyour business– helpingyou

maximize the potential o your investment and realize your business

plans. BDM’s are an integral part o any ranchise system and the

relationship they enjoy with ranchisees is both complex and rewarding.

NATIONALHEADOFFICE

Based on Queensland’s Gold Coast, Retail Food Group has a sta o

industry specialists in Marketing, Operations, Procurement, Administration,

Human Relations, Training, Finance and Business Planning that is

complemented by pragmatic ‘hands-on’ olk, all passionate about retailand the success o their brands and systems.

PROPERTYANDLEASING

Over 19 years o retail leasing and store placement means a very

strong national presence and recognition amongst premier retail centre

developers and landlords. The Donut King ootprint is easily identiable.

The brand image has been established over many years and the Sales

andLeasingDepartmentleverageboththismarketimageandtheirstrong

relationships with national lessors to the advantage o ranchisees.

MARKETING AND PROMOTIONThe Donut King brand has over a quarter o a century o history with the

Australian public. The look and eel o Donut King is highly recognisable

and adds immense brand value to the ranchise. Marketing contributions

rom ranchisees orm the bulk o the marketing budget while negotiated

trade agreements also include marketing support rom a range o

suppliers. These combine to und on-going proessional marketing

support in national campaigns across most media. Television, Radio,

Print and Direct Response strategies are all employed to help achieve our

communication objectives. These range rom driving sales, dollar spend

and consumer demand to improving Donut King product awareness,

visit requency, customer count, loyalty and more. In addition to national

campaigns, you will receive throughout the year targeted Point O Sale

marketing tools or use at store level. You will also be equipped with

a variety o local marketing and promotional strategies that can be

employed to implement local area marketing campaigns. These include

certain targeted communications such as:

•Storeopeningstrategies

•Undernewmanagement

•VIPCards

•Boxsalesdrivers

•Productsamplingloyaltydrivers

•Plannedfrequency&purchasedrivers

Marketing also provides a national benchmark Recommended Retail

Pricing (RRP) structure as a tool and guide or your business.

Throughout the Donut King network the marketing department seeks to

share resources and eedback on product development and improvement.

This ensures Donut King is at the oreront o innovative new ideas,

productdevelopmentandtechnology.Uniquesupportisprovidedfrom

a creative design department housed at our National Oce, providing

ranchisees with access to a catalogue o proessional material that is

usually only available through more expensive external sources.

TRAINING ACADEMY

All Donut King ranchisees attend a comprehensive yet relaxed training

programme at our academy on Queensland’s Gold Coast. Franchisees

are able to learn in a happy and positive environment rom specialist

training sta. The curriculum covers every acet o your business rom

the obvious operational and technical skills to conceptual planning o

your business, customer service and marketing. Support continues via

‘reresher’ training seminars delivered around the country at Franchise

Enhancement Council meetings and one-on-one with BDM’s.

Donut KingSupport System

7



FINANCIALDEPARTMENT

Donut King’s nancial and operational inormation systems are enviable.

They will assist you to run your business eciently and provide timely,

relevant inormation to help ormulate business decisions.

CENTRALMANUFACTURINGFACILITY(CMF)

The CMF was established in order to supply pre-made donuts to stores

with limited in-store preparation areas. Orders are placed and supplied

to stores on a regular basis. The CMF rozen donut programme has now

been implemented and used by the majority o stores in our system.

It provides added liestyle benets given reduced product preparation

times.

COMPETENCY-BASED TRAINING

Competency-based Training (CBT) is an approach to teaching that

places emphasis on being able to utilise the skills learned once back in

the work place. CBT is comprised o modules broken into segments and

designed to ensure each trainee has achieved all the outcomes (skills

and knowledge) required by each.

Progress in CBT is not based on time. Once you have achieved the

outcomes required in a module, you can move to the next module. In

this way, trainees may be able to complete a programme more quickly.

The Gold Coast Academy utilises CBT and will provide you with the

skills, techniques and expertise required to own and operate a Donut

King ranchised outlet. Regardless o previous experience, you will

receive all the necessary support and learn all technical, operational and

management skills necessary to operate a Donut King outlet.

FRANCHISEENHANCEMENTCOUNCILS(FEC)

Each year you will have the opportunity to attend state-based technicaland business management training sessions conducted by suppliers and

national oce representatives. These meetings will ensure that you are

kept up-to-date with current Donut King Procedures and developments

within the system.

For urther inormation regarding ranchising at Donut King, please go to

our website: www.rg.com.au

orcalltheHeadOfceon1800067619.

8

Donut KingSupport System

(continued)



Ultimatelyyourdestinyisinyourhands!ThesuccessoftheDonutKing

brand depends on our ranchisees.

I you possess the ollowing skills;

•Selfmotivation,

•Strongdesiretoachieveandsucceed,

•Haveapositiveattitude,

•Strongverbalandwrittencommunicationskills,

•Agenuineinterestinpeople,

•Theabilitytodeliveroutstandingcustomerservice,

•Abletorelatewelltoemployees,

•Haveahighlevelofenthusiasmandenergy,

•Wishtobeactivelyinvolvedinyourownbusiness,

•Arewillingtoworkthenecessaryhours,

•Willbecomfortableworkingwithinafranchisesystem,

•Arewillingtocomplywithstringentoperatingstandards,and

•Haveapassionforretailing?

Then you meet the initial criteria o a successul Donut King Franchisee.

Are you ready to

take the wheel?

9



Want to join the

Donut King team?

STEP1 ENQUIRYANDINFORMATIONPACKAGEISRECEIVED

STEP2 FIRSTINTERVIEWCOMPLETEDWITHSTATECONSULTANT

STEP3 APPLICATIONFORMCOMPLETED

DISCLOSUREDOCUMENTPROVIDED

STEP4 SEEKINDEPENDENTLEGALANDFINANCIALADVICE

(OPTIONAL)

STEP5 STOREVISITS

MEET EXISTING FRANCHISEES

INTERVIEWWITHRFGREPRESENTIVE

STEP6 PROSPECTIVEFRANCHISEECONSIDERSFINANCE OPTIONS

APPLICATIONAPPROVALORDECLINE

STEP7 FORMALAPPROVALANDTRAININGADVICELETTER

10

Once you have committed to selecting a Donut King ranchise, we support you through a structured application process, openly exchanging inormationand orming a pro-active, positive relationship rom the outset.

STEP8 COMPLETEFINANCE

STEP9 FRANCHISEAGREEMENTISSUED

STEP10 SHOPFITTER’SCONTRACTCOMPLETED

STEP11 SEEKMANDATORYINDEPENDENTLEGALADVICE

(ITISALSORECOMMENDEDTHATYOUSEEK

FINANCIALANDBUSINESSADVICEATTHISTIME).

STEP12 SIGNANDRETURNFRANCHISEDOCUMENTATION

STEP 13 TRAINING

STEP 14 STORE OPENING

The oregoing is a guide only. The application process is

dependant on individual circumstances.



Frequently Asked Questions

11

Q: What is the total cost o establishing a Donut King outlet?

A: The total cost o establishing a new store varies rom $230,000

to $407,000 + GST depending on the location and t-out. Accurate

estimates will be established and provided to you prior to you

having to sign any binding Agreement. The total cost will include

all equipment, the entire store t-out, your initial ranchisee ee, your

training ee, your opening stock, ranchisor legal ees, design and

approval ees, council/other authorities costs, initial working capital,

and initial promotional campaign costs.

Q: How much cash will I need to purchase a Donut King store?

A: The nancial ratios vary according to your personal circumstanceshowever; the ollowing ‘Rule o Thumb’ percentages can be used or

initial assessment.

a. A minimum o approximately 25% o the total ranchise cost is

preerred.

b.Youmay(ifapproved)beabletoborrowupto60%ofthetotal

ranchise cost using the value o the business as security.

c. You will be required to demonstrate your ability to service all

borrowings.

Q: Ater purchasing a Donut King store, what on-going ees are

required?

A: A Franchise Service Fee equal to 7% (plus GST) o your total

gross sales is payable in connection with a traditional Donut King

ranchise. ‘Express’ concept ranchises require the payment o a

Franchise Service Fee equal to 9% (plus GST) o your total gross

sales. A Marketing Contribution equal to 3% (plus GST) o your total

gross sales is also payable into an independently audited marketing

und. This und is used to collectively promote increased customer

awareness and provide each store with promotional material and

ongoing marketing services to acilitate constant attraction o new

customers, increased average dollar sales and the requency o

purchase.

Q: Will I have to pay a deposit? I so, when and under what

circumstances, would I lose my deposit or any part o it?

A: A deposit is payable. Deposit monies are reunded i the

Franchisee’s application is not approved. The Franchisor may,

however, deduct rom the deposit its reasonable expenses incurred

in considering your Application or Franchises. See Section 13 o the

Franchisor’s Disclosure Document or more detail.

Q: What Initial Franchise Fees will I be required to pay?

A: An Initial Franchise Fee o $50,000 plus GST is payable in

connection with a traditional Donut King ranchise. ‘Express’ concept

Initial Franchise Fees are $17,500.00 plus GST. An Initial Training

Fee o $13,000 plus GST is also payable together with an Initial

Marketing Activity Fee o $3,000 plus GST.

Q: How much working capital will I require?

A: We recommend all ranchisees budget between $20,000 -

$40,000 or their rst year’s trading.

Q: Do you have any nance schemes to assist new owners?

A: We are an approved ranchise system with ANZ, Westpac,

and Commonwealth Bank o Australia - this means that potential

ranchisees that achieve bank approval may be able to borrow

between50%-65%ofthetotalestablishmentcostonthevalueof

the business.



Q: What detail can you provide in gross prot, expense

items and turnover that will help me prepare budgets?

A: It is inappropriate or us to make any representation

to you on the potential levels o sales and protability

on any existing or new store. We will provide proorma

budget layouts that you can test and budget or the

various levels o sales that you decide are appropriate.

You should also obtain independent nancial advice in

connection with these matters.

Q: Where are Donut King Stores currently located? A: As the numbers are growing annually we can either

email you a list or you can retrieve this inormation rom

your States telephone directory or our store locater on

theDonutKingwebsite–www.donutking.com.au.The

Franchisor’s Disclosure Document also provides you

with this list o existing Donut King Stores.

12



Happy Franchisees

In the six years that we have had our Donut King Franchise we have

ound that the system is excellent. We would not put our name to thistestimonial i we did not believe in this ranchise and its systems.

Our advice to new ranchisees is to put their aith in a tried and true

system that has been improving in the 25 years since its inception. I

you do not have the condence to do so, then you should not purchase

this ranchise. Donut King is a partnership, not only with RFG but with

ellow ranchisees around the country and is indeed a ‘team eort’.

There will be times, as in any partnership, that you will eel that it

could be done better, but this is only natural and you should discuss

your doubts.

Our only complaint is that we did not buy a Donut King 15 years ago

aswewouldprobablyhave5or6bynow,butatourstageinlifeone

is certainly enough, a hobby as well as an income.

Alan&LorraineBeeby

Donut King - Glendale

We, Don and Pam Orth o Dubbo, opened our rst Donut King store

in October 1993, with the opening o our second store in December1993.

From this time on we have seen many improvements in the

Franchising system or Donut King, not only in the Marketing

Department, but also in the technology or recording sales and data,

improvements in the product and its ongoing development or better

quality and appearance, orever trialing new and dierent items and

seeking acceptable costs etc or the betterment o each ranchisee.

The training department is now excellent with experienced persons

able to put us on the right track. Every month seems to have an

added area or the betterment o ranchisees.

Retail Food Group, now controls the ranchising system or bb’s,

Brumby’s and Michel’s Patisserie as well as Donut King. In all this

makes a powerul entity to administer all aspects o their expertise to

each ranchise. When support is needed, it is given. We are proud to

be part o the “amily”.

Don and Pam Orth

Donut King - Dubbo

13



Thank you for taking

the time to read

this document.

If you are interested in

taking the next step

please call the DK

Franchise Recruitmentnumber for further

information.

I

I

14

Retail Food Group Key Personnel

Gavin Nixon

Head o Strategy - Emerging Markets

Greg Masterson

National Development Manager

Faith Manning

NationalSales&LeasingCo-ordinator

Franchise Recruitment

Free Call:1800067619

Email: [email protected]

Web: www.rg.com.au



Documents

Donut King- Low Res