NewSpring (the “Firm”), a family of private equity strategies, today announced that NewSpring Franchise, the Firm’s newest strategy focused on investing in innovative franchise and multi-unit concepts, has completed the acquisition of Duck Donuts, one of the nation’s fastest-growing donut franchise companies known for serving Warm, Delicious and Made To Order!® donuts. Terms of the deal were not disclosed.
Russ DiGilio, founder and original CEO of Duck Donuts, launched the now-iconic donut brand in 2007 in the town of Duck in the Outer Banks of North Carolina. Since beginning to franchise in 2013, the Company today operates one international and 101 U.S. franchise locations across 21 states. Headquartered in Mechanicsburg, Pennsylvania, the Company has built its cult-like following and reputation on serving warm, delicious, and made-to-order donuts, superior guest service in a family-friendly atmosphere, and supporting local communities through its Quack Gives Back program.
By partnering with NewSpring, Duck Donuts will be able to accelerate growth, increase brand awareness, and strengthen corporate and franchise culture. The enterprise will provide access to capital and additional resources to strengthen our existing infrastructure and locations.
“Duck Donuts could not be more excited to partner with the NewSpring team, who offer a wealth of knowledge and experience that will elevate our brand to the next level,” says DiGilio. “The past 14 years have been an amazing journey and we wouldn’t be where we are today without the dedication, passion, and trust of our franchisees and corporate team members. I look forward to watching the brand continue to evolve and build on the success we have already achieved in such a short period.”
In conjunction with the deal, there is a change in leadership. DiGilio, who remains a significant owner, has stepped down as CEO and named Betsy Hamm, formerly chief operating officer, to the role. Hamm will focus on building and protecting the franchise brand and providing best-in-class franchise support while driving company growth and profitability. She is responsible for strengthening company culture, ensuring operational efficiencies, and maximizing franchisee success. DiGilio will continue his founder role and serve as an integral member of the newly formed Board.
“At NewSpring Franchise, we seek out multi-unit brands with a loyal customer base and a fast-growing geographic footprint. Duck Donuts perfectly fits that model,” said Patrick Sugrue, NewSpring General Partner. “Duck is differentiated by its customer experience and CEO Betsy Hamm has done a tremendous job expanding the company’s presence in communities across the country to position the company for future growth into new markets. We are thrilled to partner with Betsy and her team to take Duck Donuts to the next level.”
The acquisition of Duck Donuts is the second investment out of NewSpring Franchise, a newly-launched strategy led by NewSpring General Partners Satya Ponnuru and Patrick Sugrue, created to invest in capital-efficient, consumer-facing, multi-unit businesses with a strong customer value proposition, proven unit-level economics, and exceptional management teams in the lower-middle market. Having successfully partnered with over 170 businesses in this market segment for over 20 years, NewSpring’s team of operational experts and value-add approach is well-positioned to serve a wide range of growing companies to accelerate growth.
About Duck Donuts
Duck Donuts opened its first locations in 2007 in the beach resort towns of Duck and Kitty Hawk, North Carolina. His intention? To solve a family vacation problem: “Our family wanted a place to buy warm, delicious, made-to-order donuts, and when we couldn’t find one, we decided to start our own.”
By 2011, Duck Donuts had expanded to four Outer Banks locations and the donut business was so successful that DiGilio was continuously approached about franchise opportunities by fans who begged for a Duck Donuts in their community. The first franchise opened in Williamsburg, Virginia, in 2013, and there are now 101 open franchise locations and more than 145 additional contracts in 27 states and four countries.
NewSpring partners with the innovators, makers, and operators of high-performing companies in dynamic industries to catalyze new growth and seize compelling opportunities. The Firm manages over $2.0 billion across five distinct strategies covering the spectrum from growth equity and control buyouts to mezzanine debt. Having invested in over 170 companies, NewSpring brings a wealth of knowledge, experience, and resources to take growing companies to the next level and beyond. Partnering with management teams to help develop their businesses into market leaders, NewSpring identifies opportunities and builds relationships using its network of industry leaders and influencers across a wide array of operational areas and industries. To learn more, visit www.newspringcapital.com.