Duck Donuts Rebuilds Trust and Growth Through Franchise Support

Duck Donuts has been around for 18 years, and franchisee Rebecca Johnson has been there 11 of them.

She and her husband previously worked in the mortgage business, and they were looking for ways to invest and diversify their income. Once the couple was told about the sweet treat concept, they traveled from Virginia Beach down to the Outer Banks to visit a store. They didn’t even try a doughnut that day, but they did notice the traffic. It was enough for them to leave a business card in case Duck Donuts felt mutual about wanting to make a franchise connection. Six months later, a call came and the ball began to roll.

Johnson was attracted to the simplicity and being part of a younger business looking to expand. The first store debuted in May 2014, and it couldn’t have been a better start. Their franchise group would go on to open units across Virginia and North Carolina.

“We blew the doors off,” she recalls. “It was insane. So we just rolled from that and kept rolling into new stores, and we enjoyed it. We enjoyed the freedom, we enjoyed being part of something young—helping them develop the brand and what we were doing and the customers. We’ve been really successful at it.”

Johnson joined at a time when Duck Donuts could best be described as a small, regional chain. It was basic in the way it operated. As franchisees, they were punching holes in boxes and placing stickers, branding everything themselves. Johnson remembers the trainers handing her a CD of all the paperwork she needed to complete.

In the years afterward, “the brand really took off,” she says, both nationally and internationally. Duck Donuts finished last year with 144 shops globally, including 13 outside the U.S.’s borders. The chain opened a net of 39 outlets across 2022, 2023, and 2024. Johnson did her part, convincing corporate to add food trucks to the system for the first time.

But as the company became bigger, so did the challenges.

“You’re trying to find the balance between the growth of the brand and how to build a franchise to how do I make sure that I take care of the stores and don’t leave them behind,” Johnson says.

It didn’t help that for several years, Duck Donuts changed its leadership team multiple times. Everyone came in with different ideas. Some of them stuck, others did not. The impact of COVID can’t be forgotten either. Everything had to be reevaluated, especially with things like the rising cost of payroll and gloves.

By the end of 2024, NewSpring Capital—the private equity company that bought Duck Donuts in 2021—decided to reshuffle the deck. Former CEO Betsy Hamm announced her resignation as others were reportedly laid off at the corporate headquarters in Mechanicsburg, Pennsylvania.

Enter Devon Mailey, who came in as interim CEO after working at the brand for six years. Her background is in finance, so naturally, her biggest priorities were to drive revenue and profitability and figure out ways to save money. She shared as much during a town hall early into her tenure.

Since that moment, Duck Donuts has investigated every contract, recurring cost, and food vendor, and even partnered with a new marketing agency—all an effort to pivot and move forward differently. Mailey wanted to create an agile brand in the face of a tumultuous economy. As Johnson recalls, Duck Donuts stores once couldn’t keep their doors closed. It was fine to spend money on some expenses. But now there’s more competition. The game has completely changed.

“We got to figure out ways to do it cheaper and more efficient,” Mailey says. “Technology has been our partner, but there are ways to do it cheaper now than there was 10 years ago. So what we’ve done is really look at literally every expense, turn it up, down, shake it, and find ways to make it last for our franchisees. But you’ve got to do that at the same time when you’re trying to drive revenue. Because you just can’t focus on one area. If you do, you’re losing sight. So it’s a constant balance.”

As for the relationship between corporate and franchisees, Mailey’s biggest form of support has been keeping her ears open. During the first quarter, she went on a listening tour and participated in regional meetings. The two sides formed franchise committees for every department. Through these interactions, Mailey sought feedback. She wanted operators to be involved in the process.

Johnson believes the interim CEO is uniquely qualified to handle Duck Donuts’ present issues and that she’s asking the right questions. Is this necessary? Is this what we want? Is it performing and does it have an ROI? She would do the same if put in the position.

“It’s a sloughing off of the baggage that we don’t need, really trimming back,” the franchisee says.

Mailey also understands that franchisees come from varied walks of life. Every conversation couldn’t be the same. The key is finding what their needs are and determining how the brand can help them succeed.

“As far as tools needed, I think before, we grew so quick,” Mailey says. “We gave [franchisees] tools, but the problem, it was here’s your package. Here’s your tools. But our tool kit needed to have all the different size branches because what Rebecca brings to the table is very different than another franchisee. She has a background in finance. Great, I can easily interact with that. But other franchisees don’t. They might be strong backgrounds in ops. So we had to make new toolkits. I had to meet them where they needed to be met.”

Although Duck Donuts is taking time to get back to basics, there are still plans to open 35 to 40 shops next year between national and international trade areas.

Johnson isn’t sure what the future holds for her franchise business. The past couple of years were challenging, which caused her and her husband to sell stores in Virginia so that they could lessen their exposure and find their footing again. Leases are coming up, contracts are close to expiring, and they’ll have to make some decisions soon.

But if the partnership with Duck Donuts continues to go well, she sees no reason why growth wouldn’t be an option in the future. And she appreciates the work Mailey has done so far.

“My take on it is that the sky is the limit,” Johnson says. “And if it is to be, it’s up to me and it’s up to us—both owners and the leadership team at corporate. I think this year, the last 10 months, we’ve worked together, rebuilding the relationship and the partnership between older franchise owners that have been through, I’ll call it the ‘suck.’ We’ve been through it and rebuilding some of that relationship. I think Devon’s done a great job about reaching out and making sure that she’s making contact and doing the right things. And then, I really do have full faith that she can do what needs to be done to keep us growing.”