How Much Does it Cost to Open a Doughnut Shop in the UK? [Doughnut Shop Startup Costs]

How Much Does it Cost to Open a Doughnut Shop?

Doughnuts aren’t just a short-lived craze. They’re an attractive and flexible business model. Doughnuts can be served in bakeries, as part of a food truck or mobile doughnut business, or in a counter-service doughnut shop. Another option for aspiring doughnut moguls? Opening a franchise! 

The cost of opening a restaurant, especially a doughnut franchise, might be a bit more than that of a traditional shop. But the brand recognition is priceless. 

There are endless possibilities when it comes to doughnut shops… they can be cozy and classic or high-end and gourmet. Check out Donutelier in London on Instagram. The process behind making their sweet treats is drool-worthy to watch!

In the UK, the doughnut industry grew by 9% between 2016 and 2019. So, are you ready to set up your own shop and get involved? Here are all of the startup costs for opening a doughnut shop, along with expected revenue, monthly expenses, and the tools and resources you need in order to put together a successful restaurant business plan. 

Average Restaurant Startup Costs

The average cost to start a new restaurant in the UK tends to range from £150,000 to well over £1m and can vary depending on location, type of restaurant, size, renovation or building needs, and whether you rent, buy, or build.

Average Cost to Open a Doughnut Shop

This depends on whether you’re opening a new restaurant, renting, building new construction, or launching a franchise. To open a franchise like Krispy Kreme, you’ll need up to £20,000 for the franchise fee and you’ll have to pay an ongoing 4.5% of turnover. Opening your own small doughnut shop or food truck might run closer to £20,000 and £100,000 (similar to the cost of opening a cafe).

When you consider that doughnut shops can bring in  £100,000+ in revenue per year, the opening costs will prove well worth it after only a few years in business.

Doughnut Shop Startup Costs by Square Metre

When estimating the costs of your new shop by square metre, decide if you’re going to buy or rent an existing space, or undergo a new construction or renovation. 

Doughnut shops need anywhere from 120 square metres to almost 300 square metres to ensure adequate space for baking, prep, and a counter or seating area. If you’re renting, you can expect to pay around £470 per square metre in London, £280 in Edinburgh, and £50-100 per square metre in countryside towns. Building a cafe in the UK can cost you between £2340 - £2600 per square metre. And, the average capital value of commercial property is roughly £2500 – £3500 per square metre.

Standard Doughnut Shop Startup Costs

After real estate, you’ll need to consider initial startup investments like equipment and branding, along with ongoing operating costs such as staff and food supplies. 

Use a restaurant business plan to stay on budget and plan ahead for potential unexpected costs.

Doughnut Shop Startup Expenses Checklist

Use these average costs as a starting point to map out your restaurant opening budget. 

1. Utilities

Utilities for restaurants include water, electricity, WiFi, gas, and any other services that aren’t covered by your rent. If you’re renting a new property or purchasing an existing building, you may be able to find out how much the previous owners paid on an average month, or you can benchmark based on square footage and location. On average, venues in the UK spend £1,000 – £1,500 on utilities each month. 

2. Location

You can choose to sell from a brick and mortar store, a food truck, or a pop-up location that offers multiple businesses’ products. 

Research competitors in the area and find out where the existing shops are, then seek out an opportunity nearby or in a heavily populated area. 

Successful doughnut shops only need around 100 square metres of space, so you may benefit from choosing a smaller building in a more prime location. 

3. Interior Design

The biggest influence on interior design costs will be whether or not you choose to offer seating, or if you’ll operate a counter-service only shop. Restaurant interior design costs are typically between £1,000 to £3,000 per square metre. So it’ll help your budget to purchase resale furniture, or offer limited seating. A little paint and creativity can go a long way. You’ll also want a bakery display case to show off your treats, which can cost between £700- £6,000 depending on the size. 

4. Doughnut Making Equipment

Will you bake your doughnuts or fry them? Fill them with fresh cream and jam, or ice them? Different doughnutt-making methods require different equipment, and you can choose to purchase brand new equipment or rent. 

Bakery equipment to make doughnuts or coffee drinks can include:

• Doughnut fryers: Up to £12,500

• Bakery convection ovens: £1,500 to £15,000

• Coffee machine: Up to £7,000

All in, equipment costs to open a doughnut shop start around £15,000 and go up based on the number of locations and the types of doughnuts you make.

5. Pre-Opening Expenses

During the time leading up to opening day, budget for costs to train new staff, develop a marketing plan, and secure any permits needed. 

Pre-opening expenses average around 25% – 35% of food and drink sales for produce, and £2,100 per month per employee. 

6. Marketing, Branding, and PR

Marketing and branding is usually covered by franchise fees, but for independent shop owners, it’s all on you. You can choose to run your own social media accounts, or hire a restaurant-industry marketing agency to handle your marketing and communications. 

Restaurant marketing and branding can include:

• Email marketing

• Public relations

• Social media marketing

• Digital advertising

• Giveaways and contests

• Local advertising and SEO

The largest portion of a restaurant’s marketing budget typically goes towards social media ads, which can be targeted towards certain demographics and tend to be cost-effective when in the hands of an experienced strategist.

7. Restaurant or Franchise Startup Capital and Loans

Restaurant startup capital and financing should cover opening costs, six to twelve months of ongoing operations costs, and emergency funds in case of unexpected situations.

When applying for restaurant financing or loans, have a detailed business plan prepared and map out as many expenses as you can ahead of time. 

8. Exterior Design

Allocate up to £100,000 with the possibility of additional planning permit costs to design the exterior of your doughnut shop, and consider opening a counter-service window. 

Exterior design costs for restaurants can include outdoor seating areas, heaters, parking, landscaping, or signage. 

9. Restaurant Permits and Organisational Costs

Restaurants require food safety and handling permits along with the standard licenses that businesses need to operate. Depending on the exact services your doughnut shop provides, you may need £750 – £1,500 for yearly insurance, and £250 – £500 for licences. 

If you need help navigating which permits and licenses you need, consult with a lawyer or restaurant business consultant.

10. Professional Services

Professional services you can choose to outsource include legal services, marketing services, real estate scouting, competitive analysis, bookkeeping and accounting, and establishing a new business. Restaurant professional service costs can add up to £55,000 if a full suite of professionals are enlisted. 

11. Technology and Point of Sale

Today’s customers expect a digital dining experience and a seamless one at that. The tools you invest in from the start can help your doughnut shop business develop a loyal customer base. 

POS platforms like Toast are fully integrated restaurant technology solutions that make order handling easier, and provide you with insights, data and multi-location management tools. The more automated your tech and POS system, the less manual work for you and your team.

The Toast Cafe and Bakery POS System ranges in price based on services and solutions chosen, and can grow as your business scales.

12. Food Cost

The cost to make one doughnut is, on average, only 10p. Talk about an opportunity to make some serious dough! Restaurants should prepare to spend about 30% of their revenue on food items and supplies. 

13. Staffing and Management

Krispy Kreme has offered the same menu since the 1930s, and their methods can be taught to any new worker, but couture doughnuts require a more advanced pastry training program. 

Consider hiring a pastry chef or manager with experience in confections. Budget for 30% of revenue to go towards restaurant labour costs and staffing. 

Doughnut tell me you aren’t ready to get started…

The world needs more doughnuts. Always. And it’s ready for your spin! Take these actionable steps and use cost estimates to finally put together a plan that’ll bring you closer to opening a new shop.