MECHANICSBURG, PA – April 14, 2021 – 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. Free Fenix, a Charlotte, NC-based hybrid investment company, partnered with NewSpring on the deal, providing a significant investment to further accelerate growth.
Duck Donuts is one of the nation’s fastest-growing donut franchise companies
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, Duck Donuts has grown into a leading franchise company and built its reputation on serving warm, delicious, and made-to-order donuts, providing superior guest service in a family-friendly atmosphere, and supporting local communities.
Duck Donuts will use the proceeds from the transaction to accelerate growth
By partnering with NewSpring, Duck Donuts will be able to accelerate growth, increase brand awareness, and strengthen corporate and franchise culture. NewSpring will provide access to capital and additional resources to strengthen the Company’s 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. 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.”— Russ DiGilio, Founder and former CEO of Duck Donuts
Duck Donuts is led by an innovative, growth-oriented leadership team
In conjunction with the deal, Duck Donuts founder Russ 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 in his founder role and serve as an integral member of the Duck Donuts Board of Directors, alongside Satya Ponnuru and Patrick Sugrue.
“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. Duck Donuts 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.”— Patrick Sugrue, NewSpring General Partner
This acquisition aligns with NewSpring Franchise’s mission of investing in innovative franchise and multi-unit concepts in large and growing markets
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.
“As a leader in the made-to-order donut category with a strong business model that’s attractive to new franchisees, Duck Donuts has quickly expanded its geographic footprint and grown its number of locations. The Company’s customizable product and award-winning customer service continue to elevate and differentiate the Duck Donuts brand and we look forward to growing its presence across the U.S.”— Satya Ponnuru, NewSpring General Partner
Fairmount Partners acted as exclusive financial advisor to Duck Donuts on the transaction.
For more information, visit www.fairmountpartners.com.
Contact: Jonathan Smith