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Over 30 years of customer satisfaction
and growth
Brand Franchise Opportunity
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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
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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.
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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)
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Introduction to Donut King
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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.
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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.
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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
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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.
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Donut KingSupport System
(continued)
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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?
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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
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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.
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Frequently Asked Questions
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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.
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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.
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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
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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
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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