Duck Donuts, a 102-unit doughnut chain based in Mechanicsburg, Pa., has been acquired by an affiliate of NewSpring Capital, a private equity firm based in Radner, Pa., and has promoted Betsy Hamm to CEO from chief operating officer, the chain said Tuesday.
Russ DiGilio, who founded Duck Donuts in 2007 in the town of Duck, N.C., on the state’s Outer Banks, and started franchising in 2013, remains a “significant owner” of the concept and will be a member of the chain’s newly formed board of directors, according to a release announcing the sale, which said Hamm would “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.”
Duck Donuts has added 17 units in the past year, according to Datassential’s Firefly 500 census, which counted 85 units in 2019. It focuses on reasonably priced, made-to-order doughnuts in a family setting with friendly service.
“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,” DiGilio said. “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.”
This is the second purchase made by NewSpring Franchise, which is led by NewSpring Capital general partners Satya Ponnuru and Patrick Sugrue. They purchased hair-and-makeup concept Blo Blow Dry Bar in March.
“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,” Sugrue said. “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.”
NewSpring Franchise is seeking out “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,” it said in the release.
NewSpring Capital manages more than $2 billion in assets and has invested in more than 170 companies.
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