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Duck Donuts CEO on repositioning a breakfast brand

Six take-aways from a conversation with Betsy Hamm, chief executive of this 100-unit doughnut franchise that was recently acquired by NewSpring Capital.


Betsy Hamm was promoted to CEO of emerging doughnut franchise Duck Donuts in May 2021, stepping in for founder Russ DiGilio, who grew the brand to 100 locations over 14 years before selling to NewSpring Capital earlier this year.

The brand, which was inspired by the boardwalk doughnut shops of the Outer Banks, serves a wide range of made-to-order doughnuts and added milkshakes to the menu this year as it shifted its positioning from breakfast-heavy doughnut chain to all-day sweet-treat destination.

Hamm joined Nation’s Restaurant News editor in chief Sam Oches on the new podcast Take-Away with Sam Oches to talk about how Duck Donuts adjusted its marketing strategy during the pandemic to expand its daypart mix, how it’s investing in its franchisees to ensure future growth, and how a brand built around an in-store experience can deliver that to more off-premises occasions. Here are Sam’s six take-aways from his chat with Hamm:

1. Flexibility is key to surviving crises. Operators have learned during the COVID-19 pandemic to expect the unexpected, and that survival necessitates adapting on the fly. Duck Donuts built an exciting brand primarily around the morning daypart, which was hit particularly hard at the beginning of the pandemic as millions of Americans stopped their regular commute. But the brand didn’t roll over and hope the pandemic would pass; it innovated its way back to positive sales, including with its messaging.

“We caught on quickly that people weren't out in the morning, so just shifting that marketing messaging a little bit or even the timing that our digital advertising was running, that you would see those messages,” she said. “We really did try to capitalize on that from just a messaging standpoint and trying to reinforce that opportunity to come later in the day.”

2. Look for opportunity outside your core competency. Duck Donuts is built around a core menu of doughnuts and enjoyed significant sales from those office heroes who would bring in a dozen or two for their coworkers. But when the brand shifted its marketing to support Duck Donuts as an all-day destination for a sweet treat, it reinforced that by launching milkshakes. That helped it build a strong business in the afternoon and evening hours.

“They're an awesome product and it just gives another reason to come to Duck Donuts,” Hamm said. “Hopefully we'll drive frequency and of course increase average check as well.”

3. The pandemic proved you have another gear. A lot of foodservice operators have developed new muscle in the pandemic by being forced into innovation. For Duck Donuts, Hamm said the brand learned to focus on how it got doughnuts into the hands of customers, which led to thinking long and hard about how new platforms like curbside pickup and food trucks could be successfully leveraged for the brand.

“The good news is I don't think any of that's going away, so things that were started we’ll continue to really evolve and focus on as we move forward,” she said.

4. Adjust the experience to fit the real estate. Duck Donuts has a unique experience where guests can watch the doughnuts being made right in front of them; the batter gets fried and moves along a conveyor belt to a team member who decorates the doughnut and puts it in a box for service. With Duck Donuts thinking more about off-premises business and nontraditional growth, Hamm said the team is trying to think more creatively about how the experience can translate to the real estate, while still protecting that competitive advantage.

“We don't want to walk away from what has made us so successful, but how do we get to where we need to be in terms of being in front of the consumer and making it convenient for them?” she said. “We don't have it completely figured out, but I think it's a really great opportunity for us to do things a little differently.”

5. Don’t get too caught up in growth mode. For emerging franchise brands, it’s tempting to get stars in the eyes and think about all the potential locations the brand could have years into the future. But while expansion is exciting, it’s just as important to support existing franchisees and help them to grow. Hamm said franchisors can create a growth cycle that leads to new franchisees coming into the fold if they take care of those already in the system and validate the brand through their success.

“[We’re] really focused on not just growth from adding additional locations each year, but each location that we have, making it even better and stronger and more profitable than it is today,” she said.

6. Your attitude in how you lead goes a long way. Hamm has been with Duck Donuts for over five years but was just named CEO in May. Even in that short time, she’s come to understand that her optimism, energy, teamwork, and empathy can give the entire system a lift, particularly now that it’s just brought on NewSpring Capital to support its next phase of growth.

“I want to be engaged with everything that's going on. And that's not from a micromanaging standpoint. … When I started in this role a few months ago, even though I wasn't new to the company, I really focused on listening to our corporate team here — what's working, what's not, what are obstacles to growth, how can we be better?” she said. “I do that because I think it just helps me to understand what we are doing well and what we aren't doing well and how we can grow. I think you have to be engaged in order to do that and to move forward.”

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