It wasn’t exactly “go big or go home” for Berwyn’s Janet Malin and Josh Morey when the couple sought a challenge they could do together, something that would suit their already full schedules and inspire their two young sons.
More like go small and have fun.
Last summer they became franchisees and acquired a 10-by-15-foot kiosk for The Dapper Doughnut, a made-to-order, mini-doughnut franchise that debuts Saturday, Jan. 27, at Plymouth Meeting Mall across from the popular Legoland Discovery Center.
The couple are among 23 franchise owners across the country for the brand that opened stores last year and is expanding, thanks partly to social media, according to Dapper’s co-owner and general manager, Brian Pappas. “It’s absolutely been a game-changer for the franchise industry,” he said. “You can build up excitement and a huge database before you even open.”
Pappas said six more franchises were coming on board by the end of next month, taking the total to 29. By the end of the year, he hopes to have 80 to 100 – including locations in Canada and the United Kingdom. Prospective franchises are being vetted in Thailand and the Philippines.
The fried-dough confection is a happening space, with Dunkin’ Donuts, Duck Donuts, Krispy Kreme, Hurts Donuts, and Philly’s Federal Donuts enticing big fan bases. “What amazes me is that the American public is enamored with doughnuts even while Type 2 diabetes is rampant, so many are obese, and the whole health-food-concept movement with everyone looking for healthier eating,” said Barry Falcon, senior strategy consultant for iFranchise Group. “I see many [doughnut] franchisees on a regular basis rolling out new concepts.”
What sets The Dapper Doughnut apart is its petite product, averaging 80 calories before the fixings. The only other competitor franchising that mini concept is Peace, Love & Little Donuts out of Ohio, Pappas said.
A franchise developer and doughnut lover since college, Pappas discovered the mini-doughnut in early 2015 in a shop called Beavers Coffee & Donuts out of Chicago under then co-owners Gabriel Wiesen and Jimmy Nuccio.
In 2016, Pappas and his brother, Jeff, acquired all of Beavers’ intellectual property rights — including recipes, toppings, and systems — and rebranded it as The Dapper Doughnut for $200,000. Pappas said someone already purchased the URL rights to the words Dapper Donut, so they went with The Dapper Doughnut.
He said part of the attraction of becoming a franchisee is the low cost of a kiosk or truck.
“The out-of-pocket expense is well under $100,000, assuming the owner leases the truck or kiosk – that includes working capital, grand-opening advertising, training, and all signage, plus an additional $27,000 for the franchise fee, which allows you to move to an ROI [return on investment] much faster because it’s so much lower than a retail location,” he said. “A Dapper Doughnut store in a strip center is going to cost $200,000 to $250,000.”
Kiosks are becoming increasingly popular with mall owners, said Ken Perkins, president of Retail Metrics Inc., who ticked off several reasons: “Low cost to set up, provides brands with an opportunity to test new products and get a feel for what consumers are interested in. Landlords see them as a potential traffic-driver.”
About half of the current Dapper Doughnut franchises are in malls. A kiosk opens at Galleria Mall in Dallas in three weeks, Wolfchase Galleria in Memphis and Lenox Square in Atlanta on April 1, and Natick Mall just outside of Boston on May 1.
Malin and Morey, who met through a mutual friend in high school, are both 39 and with successful day jobs. Malin is a merchandising executive with Philadelphia-based Urban Outfitters, while Morey co-owns Prismworks Technology, an IT firm in Berwyn.
Each had never worked in the food industry, but now they are about to launch both the kiosk and the catering side of their Dapper Doughnut business (catering is expected to account for about 25 percent of sales) where they will travel to events with their fryer, which can make up to 1,200 mini-doughnuts an hour (the kiosk fryer can make 2,400).
This month the couple began training employees. The kiosk can fit up to four people: the greeter, doughnut maker, and two others serving coffee and drinks.
Malin said social media gives small entrepreneurs the power to reach out to consumers directly without the need for a big corporate marketing budget.
For about $360 a month for a Facebook ad campaign, she said, she can reach about 4,000 people.
A customer pulls up to The Dapper Doughnut counter, orders from among 14 flavors from cinnamon sugar to blueberry lemon, watches as a 375-degree fryer makes the doughnut, and then selects the sauces and toppings.
A package of six mini-doughnuts costs $4.99; a 12-pack is $7.99; a 24-pack is $14.99; and a 48-pack costs $27.99.
Malin and Morey had a choice of operating a food truck, a free-standing store, or a kiosk — as many as they think can work — in their franchise territory, which covers 16 zip codes, stretching from the Main Line to Phoenixville and Plymouth Meeting.
The couple signed lease papers with mall owner Pennsylvania Real Estate Investment Trust in July with their broker, MSC’s Dana Zamparelli. They then underwent Dapper’s in-house training, hired a manager to run day-to-day operations, and had a soft opening two days after Christmas.
Morey said he was encouraged by early results. “People are responding overwhelmingly positively.”
Courtney Durbin, 33, a fourth-grade teacher on maternity leave from Conshohocken, purchased a six-pack of doughnuts last week during a shopping trip with her 3-month-old son, Cian Durbin, and mom, Carol Mowry, 62, of Media.
“They were tasty,” Durbin said after biting into a turtle caramel chocolate and pecan-flavored doughnut while Mowry had the Nutella, a hazelnut spread with a slice of fresh strawberry. “I definitely recommend eating them warm – which makes them stand out.
“For all those weight watchers out there, it’s perfect,” she said. “One or two bites to satisfy your sweet tooth and you don’t have to commit to a whole doughnut.”