With referral commissions of $35,000 for a single franchise, $38,000 for two and $48,000 for three, DonutNV set off a franchise broker feeding frenzy in the last few years. With outsources sales organization Franchise Fastlane boasting 280+ DonutNV franchises sold to 130 franchisees, affiliated brokers of such groups as Franchise Sidekick, The You Network, Franserve, Franchoice, Franchise Brokers Association, IFPG and others collectively pulled in millions by guiding and “matching” their trusting advisees with the semi-absentee franchisee sensation DonutNV. But were the Franchise Financial Representations (FPRs) and “insane profits” used to attract & sell DonutNV franchisees accurate & honestly presented? by Sean Kelly
When a franchise opportunity is presented as a semi-absentee or passive franchise investment, having accurate sales and profit representations is especially critical for prospective franchisee due diligence.
“Semi-absentee” franchises are presented as businesses that don’t require the prospective franchisee to quit his or her full-time job.
Prospective franchisees are told that the simplicity, high profitability and low time demands enable owners to hire full-time managers to run their businesses.
Some are even told they can run their businesses they can run from a distance, enabling them to cherrypick attractive markets across the country.
A semi-absentee franchise can seem like the perfect investment for those looking to ease into retirement.
However, what happens if a franchise is NOT as profitable as they had expected or had been led to believe?
Those who maintained full-time jobs or other businesses based on misleading representations can find themselves without the ability to pay a full-time manager and without the requisite time and physical stamina to run the businesses themselves.
I have had this situation described to me by a number of distressed DonutNV franchisees.
Let’s take a closer look at the sales and profit representations they were provided by DonutNV Franchising Corp. Franchise Fastlane & the many franchise consultants (commissioned franchise brokers) who sold 280+ franchise territories to 130+ franchisees in less than 2 years.
Please share your candid & confidential opinions and information with an anonymous comment below, or by emailing the author at UnhappyFranchisee[at]Gmail[dot]com. Corrections, clarifications and rebuttals by those discussed are encouraged.
The 2024 DonutNV FDD States That Average Franchise Sales Were $106,393. No Franchisee Profit Representations Are Disclosed.
The 2024 DonutNV Franchise Disclosure Document (FDD) includes two separate and distinct Item 19 Financial Performance Representations.
One is what they what they claim are actual franchisee top-line revenue numbers (“Actual Franchisee Numbers”) achieved by operating franchises for the previous year.
Obviously, the actual performance of franchisees is most useful for prospective franchise investors for both due diligence and planning purposes.
The other is the supposed one-year financial performance of a rather mysterious, non-franchised company-owned trailer (“Single Unicorn Affiliate Numbers”).
I regard this one-of-a-kind affiliate a “Unicorn” since it seems to have very distinct differences that make it un-representative of a franchisee’s likely experience.
Most of the numbers in DonutNV franchise advertising are the Single Unicorn Affiliate Numbers presented as Actual Franchisee Numbers.
Actual DonutNV Franchise Financial Performance Representations (FPR)
According to Ryan Zink, co-founder of Franchise Fastlane (DonutNV’s sales organization) and founder of broker/advisor firm Franchise Sidekick, promotional content is uploaded to their site directly by their franchisor clients.
Headline: “79% NET MARGINS – what could be sweeter?!”
Subhead: “What could be sweeter than a mobile food concept with 79% NET MARGINS?”
This promotional page does not mention the data in the FDD that reflects actual franchise sales ($106,393).
Instead, it cites the single, non-franchised unicorn affiliate numbers as if they were attained by DonutNV franchisees:
Insane Profit Margins with a Simple Business Model If making 83.8% NET profit margins with only 2-3 employees per trailer doesn’t sound sweet to you, we don’t know what will!
Franchisees love the success they’re seeing with DonutNV, plus they’re having FUN.
The text states:
This sweet food truck concept is an interactive, mobile franchise opportunity that generates INSANE profit margins (79% NET!)…
Like Making Money? So do DonutNV Franchisees. Not only is DonutNV a delicious brand, they have also created an opportunity for a sweet return on investment. Their proven franchise model with incredible support systems, proprietary product, and simple staffing has resulted in unprecedented franchisee financials. Take a look at the numbers:
Net Margin After Franchise Fees: 79%* *Data from 2024 FDD
Adjusted Net Profit After Franchise Fees: $134,713* *Data from 2024 FDD
The Franchise Sidekick promotion clearly states that these are “unprecedented franchisee financials.”
According to the DonutNV FDD, they are not franchisee financials.
The Franchise Sidekick promotion implies that these numbers are franchisee profits “after franchise fees.”
According to the DonutNV FDD, the unicorn affiliate paid no franchise fees.
Deducting the amount a hypothetical franchise might have paid had the affiliate been a franchise does not make these franchisee financials – it just gives that impression.
You Can Make Over +$500,000 / Year Investing $190,000 On A Donut Franchise 🤑🍩 Want to invest in a franchise without the risks of a traditional store? Follow for expert insights!
It’s hard to believe that Franchise Fastlane hasn’t seen the videos by Morningstar & The You Network, pasted April 16, 2025 on Instagram and Tiktok, claiming that “a DonutNV franchisee can generate $500,000 or more per year in revenue with many owners making a 6-figure profit.”
You can watch Karl Morningstar’s “You Can Make Over +$500,000 / Year Investing $190,000 On A Donut Franchise” video on TikTokand Instagram.
We have not seen that Franchise Performance Representation (FPR) disclosed in any DonutNV FDD.
Is Morningstar quoting from an advanced copy of the 2025 DonutNV FDD… which we have yet to see?
Or is franchise broker Karl Morningstar and The You Network making undocumented, unlawful FPRs?
We’ll add this to the list of questions we’ll ask Franchise Fastlane & DonutNV.
Are you familiar with the DonutNV franchise opportunity?
Are you familiar with Franchise Fastlane? Or Karl Morningstar of The You Network?
Please leave a comment below or email us, in confidence, at UnhappyFranchisee[at]Gmail[dot]com.
Franchisors: The franchisor, its employees and agents are invited to submit correction, clarifications, rebuttals or other opinions. You may post in the comment section of any page or email us at UnhappyFranchisee[at]Gmail[dot]com
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Tags: DonutNV, DonutNV franchise, DonutNV franchise earnings, DonutNV franchise opportunity, Karl Morningstar, The You Network, DonutNV sales, DonutNV profit, Donut franchise, Franchise Fastlane, Alex Gingold, Amanda Gingold, Klehr Harrison, Joseph Ferris, attorney Joe Ferris, Franchise Sidekick, Franchoice, IFPG, Franserve, Franchise Brokers Association,
