Philly-based chain Federal Donuts plans on a massive expansion starting from Philadelphia and moving out across the mid-Atlantic area soon. Private equity firm NewSpring’s Franchise division invested in the company which means that their hot and delicious donuts and fried chicken sandwiches will be available in more areas and will move past the Philadelphia city limits in the near future.
Federal Donuts was founded in 2011 by a team composed of James Beard Award-winning restaurateurs Steven Cook and Mike Solomonov, founders of CookNSolo Restaurants, and Tom Henneman, Felicia D’Ambrosio, and Bob Logue.
New Spring Franchise will now own an equity stake in the business. Federal Donuts’ plans include opening up to 150 new branches, some as corporate-owned stores and some as franchise locations, according to CEO and Co-founder Tom Henneman.
NewSpring Franchise General Partner Satya Ponnuru said that Henneman and Steve Cook “continue to hold a significant ownership,” but that Logue and D’Ambrosio have exited the company. A corporate spokesperson said that the store count is a potential long-term goal for the brand and is not set in stone, per The Philadelphia Business Journal.
CEO and co-founder Henneman said that specific geographic areas have not yet been identified for growth and that Federal Donuts “wants to work from the inside out, starting here.” He added that the company wants to “put a ring around the city,” and work outward from the 11 locations in Philadelphia out into the suburbs and then build up franchising throughout the mid-Atlantic region, per The Philadelphia Business Journal.
No franchises have been launched as of now but is something that Federal Donuts and NewSpring are “evaluating very closely,” said Ponnuru and added that NewSpring sees multiple avenues for potential growth, including the continuation of licensing and other non-traditional opportunities, company-owned growth, traditional stores and franchising. Henneman, Cook, and Solomonov will continue to be involved with the day-to-day and strategic operations. Cook and Solomonov will be joined on the Federal Donuts board of directors by Ponnuru, NewSpring General Partner Patrick Sugrue, and Jeff Benjamin, co-founder, and COO at Vetri Management Corp. Cook and Solomonov have known Benjamin for over twenty years and Cook said that Jeff Benjamin brings “a great mind for the restaurant business” and “a huge resource for us as we grow,” per The Philadelphia Business Journal.
