Top Donut Franchises in Australia – and the Legal Traps to Watch

The Rise of Donut Franchises in Australia

From shopping centres to bustling city strips, donut franchises have become a sweet staple of Australian retail. Brands like Donut King, Krispy Kreme, and Daniel’s Donuts have built loyal followings and proven profitable for the right franchisees.

But before taking the leap into this tempting business model, it’s essential to understand that franchising — no matter how delicious the product — involves serious legal obligations.

At Greyson Legal | Franchise Lawyers, we regularly assist clients looking to buy or sell food and beverage franchises, including popular donut brands.

Top Donut Franchises in Australia

Here are some of the most recognised donut franchises operating across the country:

Donut King

A true Australian icon, Donut King is one of the longest-running donut franchises. Known for its coffee and fresh cinnamon donuts, it offers a proven model but also comes with structured operational systems and marketing fees that every franchisee must understand.

Donut King's first outlet in Australia operated as a family business and opened in March 1981 in the Eastgate Shopping Centre in Bondi, Sydney. The Donut King franchise system commenced in 1991. It is now operated under licence by Retail Food Group (RFG) and forms part of a multi-brand franchisor structure.

Krispy Kreme

Globally renowned and loved for its “Original Glazed,” Krispy Kreme operates both company-owned and franchised outlets in Australia. Franchisees often face high initial investment costs but benefit from global brand recognition and established logistics.

Krispy Kreme is an American doughnut chain, was founded in 1937 in Winston-Salem, North Carolina. The first store outside the USA was in Australia — at Penrith, Sydney, on 19 June 2003. The brand currently operates approx. 35 stores in Australia.

Daniel’s Donuts

Daniel’s Donuts is a Melbourne-based donut brand founded by Daniel Bartalotta in 2016, with the first store at Springvale, Victoria. Its franchise model appeals to those seeking a smaller, Australian-grown network with room to grow.

The Legal Traps to Watch Before You Buy

Buying into a donut franchise isn’t just about sweet profits — it’s a legally binding commitment governed by the Franchising Code of Conduct and various other laws. Here are key legal issues to check before signing anything:

The Franchise Disclosure Document

Under Australian law, every franchisor must provide a Disclosure Document at least 14 days before signing. This document should outline:

• Franchise fees and ongoing royalties

• Training, marketing, and fit-out obligations

• Financial history of the franchisor

• Details of any litigation or insolvency

Failing to properly review this document may leave you exposed to hidden costs or unrealistic sales projections.

Franchise Agreement Clauses

Your Franchise Agreement defines everything — from how you operate to how you exit. Key clauses to check include:

• Term and renewal rights (Is there an option to renew?)

• Termination provisions (When can the franchisor end your agreement?)

• Supplier restrictions (Can you choose your own suppliers?)

• Marketing fund contributions (Are they transparent and audited?)

Many franchisees sign agreements without legal review and later discover they have little control or recourse if disputes arise.

Site and Lease Arrangements

Most donut shops operate in shopping centres or retail strips, often under complex subleasing or occupancy agreements coordinated by the franchisor.

You may not hold the head lease — meaning if the franchisor’s lease ends, your business could lose its premises even if you’ve met your obligations.

Costs Beyond the Franchise Fee

The initial franchise fee is just the beginning. Other costs can include:

• Fit-out and equipment

• Mandatory supplier costs

• Marketing levies

• Staff training fees

• Point-of-sale systems and software

These ongoing costs can significantly reduce profit margins if not properly budgeted.

Restraint of Trade & Exit Restrictions

Most franchise agreements include restraint of trade clauses, preventing you from opening a similar business after termination or expiry.

You may be legally prohibited from operating any donut or coffee business nearby for years after leaving the franchise — even if you built strong local customer relationships.

How Greyson Legal Can Help

At Greyson Legal | Franchise Lawyers, we provide:

• Comprehensive franchise agreement reviews

• Disclosure document assessments

• Advice on retail and commercial leases

• Dispute resolution and negotiation support

• Guidance for buying, selling, or developing a franchise system

We help you understand your rights and risks before committing — ensuring your donut business is built on solid legal foundations, not just sugar and hope.

Thinking of Buying a Donut Franchise? Get Legal Advice First

Before you buy, sell, or renew your donut franchise, get clear, practical advice from experienced franchise lawyers.

Contact Greyson Legal📍 Gold Coast | Brisbane | Sunshine Coast | Hobart

📞 Phone: 0411 248 885 📧 Email: mail@greysonlegal.com 🌐 Website: www.greysonlegal.com