Do DonutNV Franchise Sellers Support Free Speech & Full Disclosure?
Does DonutNV respect prospective franchisees enough to allow them to speak candidly with EVERY franchisee or former franchisee? Or do they believe prospective franchisees are to be treated like mushrooms: kept in the dark and smothered with B.S.? I share my concerns and respectfully ask Alex Gingold & Amanda Gingold for clarification. by Sean Kelly
Also read:
Is the DonutNV Franchise Too Good to be True?
Franchise Brokers: Have ZERO DonutNV Franchise Owners Failed?
DonutNV Franchise Earnings Claims: Accurate? Or Intentionally Deceptive?
DonutNV Franchise Disclosure Document (FDD) Amended 4/29/24 (PDF)
Unhappy Franchisee Letter to DonutNV 12/30/24
Prompted by decades of franchise scams and deceptive sales tactics, in 1979, the Federal Trade Commission (FTC) enacted The Franchise Rule in an attempt to ensure that individuals and families considering investing in a franchise venture had full and accurate information they deemed necessary to make an informed decision.
The FTC determined that in order to make an informed decision, prospective franchisees should have access to the candid opinions and experiences of both current franchisees as well as franchisees who recently left the franchise system being researched. For this reason, all franchisors are required to provide prospective franchisees with a complete list of current and recent franchisees and their contact information in their Franchise Disclosure Document (FDD).
Over the years, some franchisor attorneys and their franchise selling clients have worked together to devise creative ways to sabotage both the FTC protections and prospective franchisees’ right to full disclosure & thorough due diligence.
Trick #1: Forced Confidentiality Clauses to Hide Negative Outcomes or Opinions
Franchisors who do not believe prospective franchisees deserve to know of potential negative outcomes or challenges to their carefully crafted success stories will force failed, terminated and/or unhappy former franchisees to sign confidentiality agreements (gag orders, NDAs) to thwart protections of the Franchise Rule and the 1st Amendment.
The 2024 DonutNV Franchise Disclosure Document states:
Confidentiality Clauses
In the last three fiscal years, some franchisees have signed a contract, order, or settlement provision that directly or indirectly restricts a current or former franchisee from discussing his or her personal experience as a franchisee in our system with any prospective franchisee.
The DonutNV FDD states that only two franchisees left the system (by selling their franchises – not ceased operations) in the previous year.
Why would it be necessary to silence them.
Trick #2: Missing or Incomplete Franchisee Contact Information
Exhibit F of the 2024 DonutNV FDD and the Amended 2024 FDD states:
Former Franchisees
Name, city and state, and current business telephone number, or if unknown, the last known home telephone number of every franchisee who had an outlet terminated, canceled, not renewed, or otherwise voluntarily or involuntarily ceased to do business under the franchise agreement during the most recently completed fiscal year or who have not communicated with us within 10 weeks of the disclosure document issuance date:
Despite stating that they are providing the “current business telephone number, or if unknown, the last known home telephone number” of their former franchisees (as required), they include no telephone numbers.
They REALLY don’t want prospective franchisees speaking to their former franchisees, it seems!
Trick #3: Prohibit Unsupervised Participation in Online Groups or Forums
DonutNV appears to have no restrictions on the dissemination of positive hype and propaganda nor casual use of earnings claims & irresponsible hyperbole (“insane profits!” “this donut food truck is changing lives!” “Sweet success multiplied by 100 [franchise partners]!”*).
It appears that DonutNV is more restrictive and less tolerant when it comes to franchisees sharing their experiences or expressing potentially negative opinions. 7 months after issuing their April 29, 2024 FDD they issued an amended FDD that includes this clause and penalty:
4.8 Participation in Unauthorized Social Media Groups. Franchisee shall not, directly or indirectly, participate in any social media groups or websites in his, her or its capacity as a DonutNV franchisee, or otherwise refer to or discuss the Business, DonutNV Franchising or the DonutNV brand on such groups or sites, without DonutNV Franchising’s prior written consent, which DonutNV Franchising may grant or withhold in its sole and absolute discretion. In the event Franchisee violates the obligations set forth in the forgoing sentence, Franchisee shall be deemed to be in default of this Agreement, and DonutNV Franchising shall have the right to charge Franchisee $1,000 per occurrence for any such violation. This fee is a reasonable estimate of DonutNV Franchising’s internal cost of personnel time attributable to addressing the unauthorized participation, and it is not a penalty or estimate of all damages arising from Franchisee’s breach. This fee is in addition to all of DonutNV Franchising’s other rights and remedies (including default and termination under Section 14.2).
Two questions: Why would a franchisor claiming to have no failures, only two franchisees who sold their franchises, and an 80% profit margin be so worried about what their franchisees might say?
Second: Are Franchise Fastlane, Franchise Sidekick, IFPG & hundreds of commissionable brokers across the country required to seek approval before mentioning the DonutNV franchise in social media groups or forums?
*FYI “franchisees” are not “partners.” 100 franchises sold does not mean 100 successful franchisees.
We Have Asked DonutNV, Alex Gingold & Amanda Gingold to Clarify their Stance on Free Speech & Full Disclosure
Franchise consultants, brokers and other promoters should be aware of whether DonutNV believes in proactively hiding dissent & negative outcomes or defending prospective franchisees’ right to ALL information and opinions.
See our Letter to DonutNV, Alex Gingold & Amanda Gingold re: Free Speech & Full Disclosure
Do You Believe the DonutNV Supports Free Speech & Full Disclosure?
Are you familiar with the DonutNV franchise opportunity? With Alex & Amanda Gingold?
Are you familiar with Franchise Fastlane? With Jake Hamburger? Jennifer Cain? With Mike Flowers?
Which franchise consultant / broker introduced you to this exciting opportunity?
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 for immediate consideration.
UnhappyFranchisee.com is not associated with this or other franchise company or seller.
Tags: DonutNV, DonutNV FDD, DonutNV Franchise Disclosure Document, mobile donut business, lil orbits, DonutNV confidentiality agreements, DonutNV NDAs, DonutNV profitability? DonutNV franchise earnings, donutNV franchise opportunity, Franchise Fastlane, Alex Gingold, Amanda Gingold, Jake Hamburger, Jennifer Cain, Mike Flowers, Franchise Sidekick, Franchoice, IFPG, Kim Daly, Justin D. Csik, Klehr Harrison Harvey Branzburg LLP
I was sent this link and after looking at this web page. Instantly thought of lawyers who are ambulance chaser’s but, in this case, taking advantage of franchisees who are not succeeding. I own 3 franchises. Out of the 3 that I own DonutNV is the most transparent in the good and the bad. Are there issues, YES. There are issues in every franchise and company but it you look at the improvement and where DonutNV is headed, things couldn’t be more positive. I couldn’t be happier with my investment. Some people think you just buy a franchise, and you instantly become rich and successful. It takes work, day in and day out and not giving up and blaming other people for your failures.
Hello! I’ve been a franchisee for a couple of years now, and it has truly been a life-changing experience. This opportunity has allowed me to support my family while doing something I genuinely love. Watching customers’ reactions, building lasting relationships, and being part of so many wonderful communities has been nothing short of incredible.
Alex and Amanda have been endlessly supportive throughout this journey, and I can confidently stand behind our product and brand 100%. Over the years, I’ve met amazing people, visited incredible places, and had the joy of welcoming return customers again and again. It’s been a blessing, and I’m extremely grateful for everything this franchise has brought into my life. I’m excited to continue this journey for many more years to come!
Hello! I’ve been a franchisee for a couple of years now, and it has truly been a life-changing experience. This opportunity has allowed me to support my family while doing something I genuinely love. Watching customers’ reactions, building lasting relationships, and being part of so many wonderful communities has been nothing short of incredible.
Alex and Amanda have been endlessly supportive throughout this journey, and I can confidently stand behind our product and brand 100%. Over the years, I’ve met amazing people, visited incredible places, and had the joy of welcoming return customers again and again. It’s been a blessing, and I’m extremely grateful for everything this franchise has brought into my life. I’m excited to continue this journey for many more years to come!
Hi Justin:
Thanks for your input.
We’re not lawyers, not commissioned salespeople (sorry, consultants) and have no 80% profit motive here (no $25K – $35K broker’s commissions) other than to give prospective franchisees the benefit of your opinions – which we appreciate.
How are we taking advantage of franchisees who aren’t succeeding? (According to the FDD, all are succeeding).
We are happy to hear that you are doing well!
Does the Item 19 of the DonutNV FDD reflect your numbers?
From the Item 19
Table 1: Adjusted Net Profit Statement for 2023 – One Company Unit
The following table shows certain sales and expense information for the one DonutNV
trailer operated by our affiliate in 2023.
2023 % of Sales
Sales Event Revenue $159,639
Travel Fees $8,275
Gratuities $1,895
Gross Sales $169,809
Select Expenses
Food Cost – Supplies $18,031 10.6%
Fuel $2,827 1.7%
Merchant Processing $2,392 1.4%
Total Select Expenses $23,250 13.7%
Adjusted Net Profit $146,559 86.3%
Franchise Fees
Royalty $7,800 4.6%
Brand Fund $2,400 1.4%
Tech Fee $3,000 1.8%
Total Franchise Fees $13,200 7.8%
Adjusted Net Profit after Franchise Fees $133,359 78.5%
Table 2: Events Conducted in 2023 – One Company Unit
The following table shows the number of events conducted by the affiliate-operated trailer
in 2023, and sales per event
Number of Events 88
Average Sales Per Event $1,930
# (%) Above Average 41 (47%)
Median Sales Per Event $1,581
Lowest Sales Event $268
Highest Sales Event $5,280
____________________________________
Do you think these are good numbers to include in the 2025 FDD?
Or should they include the ACTUAL sales of franchisee operated trailers restricted to territories of 100,000 and include labor costs?
Dee:
Thank you for your input and your participation.
You should meet Daryl. Your experiences are remarkable similar.
But seriously, congratulations on your success.
How did your numbers in 2024 compare to those being provided to prospective franchisees in the FDD Item 19?
Table 1: Adjusted Net Profit Statement for 2023 – One Company Unit
The following table shows certain sales and expense information for the one DonutNV trailer operated by our affiliate in 2023.
Sales Event Revenue $159,639
Travel Fees $8,275
Gratuities $1,895
Gross Sales $169,809
Select Expenses
Food Cost – Supplies $18,031 10.6%
Fuel $2,827 1.7%
Merchant Processing $2,392 1.4%
Total Select Expenses $23,250 13.7%
Adjusted Net Profit $146,559 86.3%
Franchise Fees
Royalty $7,800 4.6%
Brand Fund $2,400 1.4%
Tech Fee $3,000 1.8%
Total Franchise Fees $13,200 7.8%
Adjusted Net Profit after Franchise Fees $133,359 78.5%
Table 2: Events Conducted in 2023 – One Company Unit
The following table shows the number of events conducted by the affiliate-operated trailer
in 2023, and sales per event
Number of Events 88
Average Sales Per Event $1,930
# (%) Above Average 41 (47%)
Median Sales Per Event $1,581
Lowest Sales Event $268
Highest Sales Event $5,280
____________________________________
Do you think these are good numbers to include in the 2025 FDD?
Or should they include ACTUAL sales of franchisee operated trailers restricted to territories of 100,000… and include labor costs?
Dee:
Thank you for your input and your participation.
You should meet Dee. Your experiences are remarkable similar.
But seriously, congratulations on your success.
How did your numbers in 2024 compare to those being provided to prospective franchisees in the FDD Item 19?
Table 1: Adjusted Net Profit Statement for 2023 – One Company Unit
The following table shows certain sales and expense information for the one DonutNV trailer operated by our affiliate in 2023.
Gross Sales $169,809
Number of Events 88
Average Sales Per Event $1,930
Adjusted Net Profit $146,559 86.3%
Do you think these are good numbers to include in the 2025 FDD?
Or should they include ACTUAL sales of franchisee operated trailers restricted to territories of 100,000… and include labor costs?
Comments are very funny and most likely converted Applebee line cooks like poor Justin. THE MOTTO: for every 3 “life changers” there are 50 lives destroyed. I drank the Koolaid so I’m all in on my $75k investment.
Dee and Dayrl said the exact same thing. It must be true!! I can tell you it’s not. Profit margins are negative. Ask them to find you a GM in their “program”. They seem to really care about their franchisees.
DonutNV is a scam. They sell a dream to people and use companies like Franchise Fastlane and Franchise Sidekick to convince people to gamble their life savings on a semi absentee business with 80%+ margins. When it doesn’t work out, it’s all the zee’s fault and the Gingolds are laughing their way to the bank while many “family members” drown in debt.
Hilarious that Darryl and Dee posted the exact same comment with the same timestamp.
That dude or dudes since it’s obviously two separate people 😆 runs the “corporate trailer” that’s the single set of numbers in the FDD and NOT representative of the average Zee.
Also got in before Franchise Sales companies increases the buy in franchise fee by 5X
He/they are in on the scam
I don’t doxx commenters and all are free to use a fake name. But please stick to one.
I came across the name Daryl Poe & would be interested in his story. There’s an FB post congratulating him on being franchisee #2 saying he owned the Pottstown PA brick & mortar store. There’s no Poe & no pottstown franchise listed in recent FDDs.
Anyone know the story there? Is it open?
Sorry to hear that, Meg.
The Item 19 implies one should be able to book 88 events with an average revenue of $1900 per event.
What’s a more realistic picture of # of events & average revenue per event for a Donutnv territory of 100k population?
WHOEVER COMMENTED AS MEG H WAS NOT THE REAL MEG H. I COMMENTED AS SUGAR MAMA AND IT WAS NOT APPROVED. IF THIS COMMENT IS NOT APPROVED WE WILL KNOW THIS WHOLE SITE IS MORE OF A JOKE THAN WE ALL ALREADY THOUGHT IT WAS, SINCE PEOPLE ARE OBVIOUSLY TRYING TO MUD UP NOT ONLY THE BRAND BUT MY NAME AS WELL.
THIS WAS MY ORIGINAL AND WILL BE MY ONLY COMMENT:
I currently own 3 DonutNV trailers and my husband and I were franchise #8 to join the sweet life.
My sales are in line or above the numbers presented to us, and that is due to research prior to purchase, not going into this business underfunded, and having an unmatched hustle.
If someone has failed, it is most likely due to one of these topics.
Small business is not cookie cutter, there is no guarantee, and food trucking is a beast all on its own.
Not everyone is cut out for owning their own business and not everyone is cut out for the food industry. Although there is so much that is taught at DonutNV University, there is also a lot that can not be taught until it’s in the moment. Alex and Amanda started a business that was so successful that they saw the opportunity to franchise their hard work and offer their business model across the country. Have there been learning curves, yes of course, but they started an amazing journey and paved a path for others that I can guarantee any of these negative posters on this thread would dare to dream about.
Don’t expect a lot of positive comments on this thread because those of us who are successful are too busy hustling and selling minis to be bothered by negativity or an ambulance chasing reporter who is just looking for his next story. Yes, lil orbits exists, as does dawn mix and others, but try them side by side DonutNV’s donuts and encounter an enthusiastic DonutNV owner who is just as passionate as The Gingolds are about their donut business, and you will undoubtedly walk away smiling.
If the intent is to rip apart DonutNV from this site, it won’t work, there are too many of us who are successfully making life sweet with minis and lemonade, backed by fearless leaders. I have been on many validation calls – which I complete with 100% honesty – and welcome any questions should anyone want to reach out to me directly.
I searched the SPAM filter & found your original post, Sugar Mama.
It rarely happens but sometimes it does. It’s now visible on “Is the DonutNV Franchise Too Good to be True?”
If anyone’s comment doesn’t appear, please email admin. The first comment is held briefly for review. Once that’s approved, they should appear immediately.
We encourage discussion and debate from both sides so readers can make up their own minds.
That’s why we making commenting accessible and continuously invite participation from all.
Every post we make includes an invitation to Alex, Amanda & any corporate employee to provide answers, rebuttals, clarifications, explanations, etc. which we will share with the same prominence as negative comments.
Who is supplying you & others with the “ambulance chasing reporter” talking point? It makes no sense. If there’s any chasing going on it’s the franchise brokers chasing $30k-$48k referral fees for delivering prospects to Franchise Fastlane & Jake Hamburger. It’s the aggressive salespeople at Franchise Fastlane – a group accused of using deceptive claims to sell “Semi-Absentee owner” Premier Martial Arts franchises to, among many others, a parapalegic woman and a retirement age U.S. military Veteran with a serious medical condition.
Franchise Fastlane also raked in big commissions for its much-hyped Anchored Tiny Homes up until early 2024 when the company – and all its franchisees’ money – disappeared virtually overnight.
We don’t chase ambulances… we try to prevent them from having to respond to the serious physical and emotional problems that result from predators who delight in exploiting good people’s trust and dreams for monetary gain.
I honestly don’t know whether Alex Gingold and Amanda Gingold are good people who care deeply about their franchisees or not. But they chose to partner with some of the most controversial and litigated franchise sellers in recent history & that comes with some extra scrutiny.
Sugar Mama, if you are truly a franchisee as you say, you should support – and not insult – our efforts to inform : We ask questions If/when you begin searching to add another franchise to add to your empire, we will ask the franchisor and franchisees questions on your behalf also.
If you care about DonutNV and the Gingolds, you should encourage them to embrace this discussion and consider it an important opportunity to make sure they’re on the right path.
The Gingolds actually have the most to lose if the Franchise Fastlane leads them off a cliff, as it has for other promising brands.