YOUR BUSINESS AUTHORITY
Springfield, MO
It’s time to make the doughnuts again in Springfield.
The longtime Dunkin’ Donuts advertising slogan is pertinent as the national franchisor plans a return to the southwest Missouri market. An Aug. 31 property purchase on South Campbell Avenue first reported by Springfield Business Journal kicked off the buzz on social media.
But Hurts Donut Co. operators say they’ve been making their boutique doughnuts by the truckload since opening downtown to much fanfare in late 2013. Now, their “Emergency Donut Vehicle” is headed to the south side.
On the same day a Dunkin’ Donuts franchisee committed, Hurts Donut owners Tim and Kas Clegg signed a five-year lease for their second Springfield store, this one in the Gallery Eleven center.
Competition is rising in the doughnut business, and the timing of the moves pits locals Hurts and St. George’s Donuts against national chains Dunkin’ and Krispy Kreme. Until consumers vote with their wallets when both stores are open by year’s end, they’re voting with social media comments, likes and shares.
“I will take Dunkin’ Donuts over Krispy Kreme any day” was among the comments in favor of the New England-based chain, part of the Dunkin’ Brands Group Inc. (Nasdaq: DNKN) that now markets, “America runs on Dunkin’.”
Others cut through the Dunkin’ fanfare: “Boo, we love Hurts Donut” and “No matter what, St. George’s will be the king of donuts around these parts.”
Aside from the pleas for Dunkin’ to open in nearby towns – Joplin, Bolivar, West Plains – fans often tagged other friends to let them know about the news.
“I’ve had six calls since the article came out thanking me for helping bring them back to Springfield,” commercial broker Ross Murray of R.B. Murray Co. said in an email two days after capping off the Dunkin’ property deal for undisclosed terms. The new owners bought the shuttered Back Yard Burgers at 4020 S. Campbell Ave. with plans to open after renovations in December – hopefully, before Christmas, according to Cory Roebuck, the Dunkin’ franchisee with his father, Thomas, in Ozark Donuts LLC.
Sugar buzz
SBJ’s breaking news about Dunkin’ Donuts coming to town was viewed by over 20,500 people and shared 174 times on its Facebook page. The story was picked up across the Ozarks by KY3, KSPR and Springfield News-Leader.
KY3 quickly posted “Springfield Business Journal reports Dunkin Donuts will open in Springfield” and the Aug. 31 Facebook post garnered over 2,000 likes and 1,200 shares. Its second most popular post that day – a story about Moonshine Beach reopening – had 765 likes.
News of Hurts Donut Co.’s second shop ignited more of the friendly doughnut wars. After the SBJ report, the News-Leader story on the Cleggs’ new lease of 1,600 square feet Sept. 1 received 457 likes on Facebook and 138 shares.
“We’ve been trying to get them down here for a few months,” said real estate agent Anita Zimmerman of Wilhoit Properties Inc., who brokered the deal.
Hurts Donut is moving into the former Dagwood’s Sandwich Shoppes space with a listed rent of $2,600 per month, or $19.50 per square foot. Zimmerman said the lease agreement makes Gallery Eleven fully occupied.
Kas Clegg said she wasn’t worried about the news of Dunkin’ Donuts re-entering the market about a mile away from the south-side store she hopes to open within 60 days.
“It’s completely different from us, so it doesn’t bother us that they are coming to town. We are excited for them. It’s kind of like Outback [Steakhouse] and Flame. They both serve meat, but they’re completely different,” she said.
With a name that plays on the classic joke – “hurts, don’t it?” – the company made a splash in Springfield with gourmet doughnuts topped with M&M’s to Fruity Pebbles to bacon. It generated roughly $600,000 in its first seven months in business, according to SBJ archives.
Hurts currently operates three stores – one each in Springfield, Norman, Okla., and Wichita, Kan. – and Clegg said an Iowa City, Iowa, store should open within 40 days. She said franchise stores in Oklahoma, Texas and Florida also are being considered.
“We just can’t believe that in two years we are growing and expanding this much,” she said.
Doughnut wars
The incoming competition has over 30 years of experience in the restaurant and retail industries.
A veteran of the theme park industry, Cory Roebuck’s LinkedIn page identifies him as the director of operations for Silver Dollar City, White Water and Wilderness Campground. Ozark Donuts committed to opening three Dunkin’ stores in Springfield, and Roebuck is working with Murray to locate the other sites for the Canton, Mass.-based brand that sells over 1.7 billion cups of coffee per year and has 11,400 locations in 39 countries.
“There are a couple of Facebook pages dedicated to bringing a Dunkin’ Donuts to Springfield,” he said.
Now, Roebuck is doing just that.
According to corporate records, the last Dunkin’ store in Springfield closed in 1999, said Patrick Cunningham, senior director of franchising.
“We are excited for our return to the market,” he said via email. “As we expand to both new and existing markets around the country, our growth would not be possible without our enthusiastic and dedicated franchisees.”
Ozark Donuts is spending up to $200,000 on exterior and interior renovations to its South Campbell Avenue building. In addition, the initial franchise fee was $40,000, Cunningham said, noting typical franchisee net worth starts at $500,000 with liquid assets of $250,000.
According to the company, Dunkin’ franchise opportunities are available in Joplin and Tulsa, Okla. To help fuel the company’s growth in Missouri and Oklahoma, special development incentives include reduced royalty fees for three years and up to $5,000 in local marketing support for timely openings.
Marty Witt, owner of Ray’s Donuts at 3654 S. Campbell Ave., said he isn’t worried about the competitors.
“For a while now, I’ve been right next door to Krispy Kreme and that hasn’t impacted me,” Witt said. “I think there is enough business to go around.
“Everybody has their own niche in the market.”
Meanwhile, the Facebook fans continue to cheer: “Springfield will soon be the donut capital.”
Angel Animal Hospital relocated; Great Dave’s Coffee Co. expanded with a brick-and-mortar shop in downtown Monett; and the Missouri Job Center began moved.