Donut chain, Shipley Do-Nuts, ventures into a fresh chapter
In a recent development, Shipley Do-Nuts, the popular restaurant chain known for its unique menu including savory kolaches, has been sold to California-based private equity firm, Levine Leichtman Capital Partners (LLCP). The company, which has over 375 locations across 14 states, has experienced significant growth under its previous owners, Peak Rock Capital, having expanded from more than 300 locations in 9 states.
The CEO of Shipley Do-Nuts, Flynn Dekker, and the executive team will remain in place following the acquisition. This move is seen as a strategic one, as LLCP has a strong track record in franchised food brands, having previously invested in Nothing Bundt Cakes and Tropical Smoothie Cafe.
Under LLCP's ownership, Shipley Do-Nuts aims to accelerate its growth, targeting the opening of over 40 new locations by the end of 2025. The company also has another 200 units in development, including its first location in Missouri and a flagship store in Nashville. The expansion is primarily focused on the southeastern U.S. and beyond, while maintaining Shipley's commitment to quality and its original recipes.
During Peak Rock Capital's ownership, Shipley Do-Nuts expanded in multiple geographies, developed new products, launched a franchisee marketing cooperative, and built a new corporate headquarters and R&D lab. Peak Rock Capital credited their investments in people, processes, and technology with enabling Shipley to double systemwide sales and set records for new store growth.
Flynn Dekker, the CEO of Shipley Do-Nuts, believes that the company has significant growth potential, especially if it can educate consumers beyond Houston about the product. His main goal is to build unit volumes for Shipley Do-Nuts, which can encourage franchisees to build more units and expand the brand into more markets.
Franchise brands, including Shipley Do-Nuts, have been popular targets for mergers and acquisitions due to their generally strong cash flow and low capital requirements. The expectations under the new owners, Levine Leichtman Capital Partners, will be different from those under Peak Rock Capital. However, with the strong momentum established under Peak Rock Capital’s four-year stewardship, Shipley Do-Nuts is poised for continued growth and success.
[1] Private Equity Firm Levine Leichtman Capital Partners Acquires Shipley Do-Nuts [2] Shipley Do-Nuts to Accelerate Growth under Levine Leichtman Capital Partners Ownership [3] Shipley Do-Nuts Expands into Missouri and Nashville with Levine Leichtman Capital Partners [4] Levine Leichtman Capital Partners' Investment to Fuel Growth for Shipley Do-Nuts
- The recent acquisition of Shipley Do-Nuts by Levine Leichtman Capital Partners (LLCP) is seen as an opportunity for finance-led growth in the restaurant business, as the company aims to expand its food-and-drink offerings and reach new markets.
- With Levine Leichtman Capital Partners' acquisitions of franchised food brands such as Nothing Bundt Cakes and Tropical Smoothie Cafe in their portfolio, Shipley Do-Nuts' finance strategies are expected to play a significant role in driving the company's growth and contributing to its overall lifestyle appeal.
- As investors in the food-and-drink industry, Levine Leichtman Capital Partners' acquisition of Shipley Do-Nuts indicates an interest in leveraging the company's established brand and unique offerings, like savory kolaches, to attract further funding for expansion and enhancing the consumer experience.
