What Are Some Common Franchise Terms?


Some Common Terms You May Come Across While Opening a Do-Nut Shop Franchise with Shipley

Opening a do-nut shop franchise with Shipley Do-Nuts is a great way to become your own boss, allowing you to be in business for yourself, not by yourself. But as you learn more about the world of franchising, you might be confused by some of its language — words and phrases that may be new to you. Here, we’ll discuss a few of the more common franchise terms you’ll come across as you move forward in your franchisee journey, what they mean, and why they’re important.

Discovery Day

A Discovery Day is a step in the franchise process that tends to come toward the end of it and that allows potential franchisees to dive deeper into a brand’s culture and value propositions. Investors spend the day at the franchise’s corporate headquarters and enjoy one-on-one time with brand leaders and team experts. This is the time to ask any last-minute questions you might have about the franchise opportunity and make a final decision about whether or not you want to invest.

Franchise Start-up Costs

Start-up costs, sometimes called an initial investment, refer to the total financial investment you’ll need to make in a franchise opportunity in order to get it up and running. Your initial investment will include expenses like the franchise fee, working capital, insurance, real estate if applicable, and so forth, and is typically represented as a range, showing low- and high-end amounts. In the case of opening a Shipley do-nut store franchise, our initial investment range is between $455,000 and $811,500 and includes our franchise fee.

Franchise Fee

A franchise fee is the one-time lump sum you’ll pay to become part of a brand family. All franchisors charge this fee, although the amount varies depending on the brand. It’s payable upon the signing of a franchise agreement, and when you open a do-nut store under the Shipley name, you can expect to pay an initial franchise fee of $40,000. This fee covers the cost of your onboarding and pre-opening training and grants you access to our proprietary materials, logos, and resources, as well as gives you the right to do business under the beloved Shipley Do-Nuts brand name.

Franchise Royalties

Royalties are the monthly fees collected by the franchisor against your gross receipts. Among other things, we use our royalties (5% of your gross sales) to fund the ongoing support we provide you, in the way of important marketing initiatives, research and development, networking opportunities, and more, and to improve operating processes on a regular basis.


Put simply, a franchisor is a company or brand that’s offering an investment opportunity, although a good franchisor is much more than that. The people behind the brand are what really determine the strength of a franchisor because those people will be the ones you’ll turn to for ongoing support. In addition to selling you the right to open locations and sell products or services using their brand name, franchisors will also be the people who make sure you’re well trained and ready to do business as you enter into this new venture.

Opening a Shipley Do-Nuts franchise is a great way to do business! To find out more, please get in touch today.

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