It’s hard to believe that by simply investing in coffee and donuts you could live the American dream after acquiring a green card. But it’s possible to invest in two of America’s top passions through LCR Capital’s Dunkin Donuts U.S. lending programme and the EB-5 or ‘immigrant investor’ visa.
The Dunkin Donuts chain is an established, well-loved baked goods and coffee chain. It is the 7th largest U.S. restaurant chain and one of the fastest growing, aggressively expanding from the East to the West coast with hundreds of new store developments in the pipeline. As a 100% franchised business, Dunkin’s compelling store level profitability drives the strong new store development.
With a store closure rate of 1.3% and job creation of over 20 per investor, the Dunkin’ Donut franchise fund is an attractive option for EB-5 investors looking for principal protection with strong job creation.
Dunkin’ is not directly involved in LCR Capital’s lending programme. Instead, the private equity firm provides experienced multi-unit Dunkin’ Donut operators with senior secured loans to finance the construction of new outlets. LCR Capital’s Franchise Fund will invest alongside experienced Dunkin operators to help develop up to 72 restaurants in Florida.
There are various options for repayment of the franchise loan including accumulated store cash flow, a refinancing or the sale of the land. Investors are then repaid their original investment with a nominal return.
LCR Capital combines expertise in lending, franchise strategy and franchise operations and applies this expertise to benefit both the EB-5 investor and Dunkin operators. LCR and its affiliates have successfully deployed over $1.2bn of franchise loans to build over 2,000 stores.
Besides being a well-respected local American brand, Dunkin Donuts has an established worldwide presence with more than 12,000 restaurants in 44 countries (including South Africa in Cape Town and Johannesburg). Its aggressive long term emerging markets expansion program includes store openings in China (1,400 stores), Brazil (150 stores) and Mexico (100 stores).
Investing in the franchise industry is a viable option for EB-5 investors since its one of the highest job-creating industries in the U.S. In 2016, 9 million people worked in the franchise industry, with nearly 1 million jobs added over the last 5 years, well above economy wide job-growth. It also generates $550 billion for the U.S. economy a year and with President Trump’s aim to create more jobs and grow the American economy there is no doubt that this sector will garner some much deserved attention.