2018 Dynamic Dozen No. 1/Judge’s Choice: Hurts Donut Co.

Hurts Donut Co. began as a single doughnut shop in downtown Springfield less than five years ago. It’s more than doubled its revenue every year since opening. It’s franchisees stretch to Wisconsin, Tennessee, Texas and Arizona. The owners have their sights on $30 million in 2018.

SBJ: What has been key to your recent growth?
Tim Clegg: Our social media presence. The way that we’ve been able to manage our social media, engage in our customers and engage in our clients has really assisted us in other markets. Our first location was here in Springfield. Our second one we decided to put five hours away in Oklahoma, which had its own challenges. And then the year after we did that, we started franchising. For us to be contacted by someone in Tempe, Arizona, wanting franchising of something we’re doing here in the Midwest was pretty surreal. Also, just the way that we present our business to the communities that we serve. We don’t ever want our brand to feel overly corporate and not regional at all so we make sure that there is definitely a connection to the community with the franchises that we serve. We do a lot within the community as far as fundraising with different charity events. We have a partnership with the [National] MS Society, so we donate funds to them 365 days out of the year. We think that it’s our corporate responsibility to give back. The community is what’s made us successful.

SBJ: What are your top issues when it comes to managing growth?
Clegg: We have to manage our growth carefully so we’re not opening a store somewhere on the East Coast one week and the West Coast one week. Right now, we’re really focused on Texas. On the store level, obviously we’re an entry-level job opportunity, so we experience a lot of turnover. We’re constantly improving our employee processing, our employee relations, and just our staffing and training. We have 17 stores open currently; we will open our 18th location in Colorado Springs in a couple weeks. A few short weeks after, we’ll be opening in Kansas City.

SBJ: Is your fast growth sustainable?
Clegg: Absolutely. We’re getting tons of applications, introductions into new markets. Every time we open a store, someone experiences Hurts Donut for the first time and they’re intrigued by the concept, which causes them to do a search on franchising. We’ve never advertised franchising up until about two months ago. It’s all organic growth, which is mind-boggling to us. We’re not wanting to turn into other doughnut chains that are up on every corner. We want each experience to be unique.

SBJ: Is there a tipping point?
Clegg: I don’t think we’re close to defining what that tipping point would be. We have to look at each individual market separately. When we first started, we never thought that Springfield honestly would be a two-store market.

SBJ: How many doughnuts do you sell in a day?
Clegg: The company record we experienced, in Tulsa, was just over $24,000 in sales between 5 a.m. and midnight the first day. Roughly, in a $24,000 day, we produced 24,000 doughnuts. We had no idea how that happened.

SBJ: Why is giving back important to you?
Clegg: I was diagnosed with (multiple sclerosis) in 2013. It changed my life. I was in the military, scheduled to go on deployment to Afghanistan later that year. With that diagnosis, it disqualified me from deploying, and ultimately, it cost me my job. I had to figure out a way that I could make up lost revenue for my family. With the diagnosis, I had a lot of free time in my head to make notes, and that’s where the concept of Hurts Donut came up. I was able to address it with my wife, and said, “How would you feel about taking all of our savings from our season at Sno Biz and turn it into another business opportunity?” And that’s the birth of Hurts Donut. It’s a business that was born out of necessity. For me, it was a new beginning. I’ve had a lot of deep moments with accepting my diagnosis. I can’t say that I’m grateful to have a disease, but I’m grateful for the connections the disease has allowed me to make, and I’m grateful for the business that the diagnosis has allowed me to build.