Local, artisanal, and craft products seem to dominate the foodservice industry these days, but when it comes to doughnuts, many Americans have been left to debate about which corporate giant is superior: Dunkin’ Donuts or Krispy Kreme. Until now – because specialty doughnuts peddled by a well-dressed duck could be coming soon to a city near you.
Since 2006, Duck Donuts has offered made-to-order cake doughnuts decorated with eleven coatings, six toppings, and four drizzles. Customers are encouraged to choose one of each to make their own flavor designs, but may also choose from some of the most popular combinations, including maple and bacon, lemon and coconut, and peanut butter with a chocolate drizzle. Select locations also offer breakfast sandwiches and warm doughnut sundaes.
Duck Donuts isn’t the only specialty doughnut shop in America to set tongues wagging, but it may be the first that’s managed to capitalize on its fan base with a massive franchising effort. Duck Donuts opened its original locations in Duck, Kitty Hawk, and other cities on the Outer Banks of North Carolina. With the help of franchisees, the operation has grown to nearly 150 in-development and open locations stretching from Texas to New York.
Build-Your-Own Success Story
Russell DiGilio founded Duck Donuts and operates it with several family members, but the doughnut shop wasn’t his first experience owning a business.
“I started my career in the health care industry working for others,” says DiGilio. “Eventually, I wanted to pursue entrepreneurship and go out on my own. I built my own management company and acquired or built senior care facilities [for] retirement and assisted living. I developed a lot of experience in the service industry and learned how to develop good relationships.”
While on vacation in the Outer Banks, DiGilio realized that the Duck Donuts concept could satisfy the area’s need for specialty doughnuts.
“My wife and I and some friends were craving boardwalk-style doughnuts because there were no doughnut shops at that time in the area,” says DiGilio. “The entrepreneur in me saw an opportunity, and I wanted to have some fun.”
Although he didn’t originally plan to expand Duck Donuts with franchised locations, DiGilio says it became a natural next step in the company’s evolution.
“Our growth is entirely organic—people taste a Duck doughnut in the Outer Banks or in New Jersey or Virginia and immediately ask how they can bring this treat to their hometown,” says DiGilio. “We began to be inundated every year with people who wanted us to franchise. I didn’t want to at first, but the demand was so compelling I thought if I didn’t at least try, I would regret it.”
DiGilio, who sold his other businesses to focus on Duck Donuts, discussed the company’s concept and explained why folks have been flocking to try the “warm, delicious, and made-to-order” doughnuts.
On finding the perfect cake doughnut recipe. “It took quite a bit of time to finally feel good about the cake recipe. Then, what made a considerable difference was the shortening the doughnut was cooked in. It was amazing how the flavor of the doughnut changed when cooked in different oils.”
On whether Duck Donuts offers “craft” doughnuts. “I think that the term ‘craft’ implies that the craftiness is attributed to the company. In our case, if you wanted to use that term, it really belongs to the customer. We provide an incredibly delicious warm donut as a blank canvas, if you will… The combinations we offer are almost limitless and they can be very creative.”
On the future of specialty doughnuts. “We were concerned early on whether the concept would play in non-resort/non-vacation areas [and] found out quickly that it could. We believe that the made-to-order doughnut concept will always play well in the food market.”
On the early days of Duck Donuts. “Today, we have 18 on our corporate staff, [but] early on there were only four of us, all working out of our homes. The strength of the corporation comes from my strong family support, and the fact that we all worked at the original Duck Donuts.”
On working with franchisees. “There is no greater purpose for us than to work for our franchisees [by] protecting our brand and helping them achieve the dream of business ownership and be profitable. There are 25 to 40 new jobs created with each franchise opening, and we’re excited to contribute to so many local economies. With 150 contracted locations, that’s more than 6,000 jobs.”
On what customers can expect when visiting a Duck Donuts location. “We try to make the process fun and family friendly, and that reaches customers on an emotional level. There is an experience to be had. Friendly customer service, watching the entire donut-making process, noticing the colorful, interesting environment—it all adds to the experience. We want to create an environment where every day our employees say, ‘I can’t wait to get to work.’ We sell donuts with a side of smiles!”
On overseeing the company’s long-term growth. “Every entrepreneur has obstacles to overcome and processes to develop. I can’t say we’ve had significant set-backs, and we’re successfully navigating the challenges of federally mandated nutrition guidelines and FDA regulations. We are racing to keep up with new technologies so that our infrastructure is sound, and we can continue to be competitive as a doughnut company in an ever-changing food market.”
On turning a cool concept into a bustling business. “We do not focus on number of operating units or stress about reaching franchise goals. What we do focus on is the process to make our franchisees successful. If we stick with that vision, then the numbers will take care of themselves. The bottom line is, whether you really believe in something or just stumble onto an idea that works, you must embrace it and be prepared for failure. Risk is always part of the adventure, which makes it all the more interesting. You never know how the story is going to unfold or end.”