How to Finance a Donatos Pizza Franchise: Costs, Fees and SBA
By Chris Cornella
A Donatos Pizza franchise loan typically funds a compact strip-center pizzeria where the equipment package, not the real estate, is the largest single cost. Donatos publishes a detailed Item 7 budget, a 4% royalty and clear capital thresholds, which gives buyers and lenders a solid starting point.
This article walks through what the franchisor says it costs to open a Donatos, how the royalty and marketing fee shape debt service, what the brand’s SBA Franchise Directory note means for buyers who own their building and how new and existing restaurants are typically financed.
US Professional Funding is not affiliated with, sponsored by or endorsed by Donatos Pizza; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Donatos Pizza Franchise Loan at a Glance
- Initial franchise fee: $30,000, with a military discount on the first location.
- Royalty: 4% of net sales.
- Marketing fee: 5% of net sales.
- Estimated initial investment: $546,637 to $1,060,537, according to the Item 7 table the franchisor publishes.
- Owner qualifications: $300,000 or more in liquid capital and a net worth of $1 million or more.
- Franchise term: 10 years, with a 10-year renewal option.
- System size: more than 170 traditional restaurants and about 280 non-traditional locations in 29 states, as the franchisor reports.
- SBA Franchise Directory: listed (code S0514), with a note on real estate collateral explained below.
What Is Donatos Pizza?
Donatos was founded in Columbus, Ohio, in 1963 and opened its first franchise location in 1991. It remains family owned, describes itself as female majority owned and is still headquartered in Columbus.
The brand is known for edge-to-edge toppings, thin dough and a crispy crust, and the franchisor highlights 100 pieces of pepperoni per pizza. Dough comes from a centralized company dough plant, stores run a proprietary point-of-sale system supported by the home office, and the kitchen line uses automated pepperoni and sauce equipment.
Unit formats. A traditional Donatos is typically about 2,000 square feet in a commercial strip center, with 24 to 30 seats. Traditional restaurants operate in 12 states, and the brand’s products are also served in roughly 280 non-traditional locations such as sports and entertainment venues. Restaurants open daily at 11 a.m. and typically need 20 to 25 full- and part-time team members, depending on sales volume.
How lenders view the brand. Lenders see a long-established system, a published Item 7 budget that ties to its total, a moderate royalty and an Item 19 disclosure to review. They also see a leased-space concept where equipment makes up most of the investment, so the borrower’s liquidity, the lease and realistic sales projections drive the decision.
Donatos Pizza Franchise Costs
Initial franchise fee. The franchise fee is $30,000. The franchisor offers a military discount on the fee for a franchisee’s first location; confirm its terms in Item 5 of the FDD.
Real estate and build-out. Most restaurants are leased. The Item 7 table budgets a security deposit, one month’s rent and real estate expenses, architectural drawings and leasehold improvements. Leasehold improvements range from $26,500 to $426,000, the widest spread in the table, because a former restaurant space with existing hoods and plumbing costs far less to convert than a vanilla shell.
Equipment and technology. Furniture, fixtures and equipment run $370,637 to $396,537, the largest line in the budget. The computer system adds $18,000 to $23,000 and a software license fee adds $4,500.
Opening costs and working capital. The budget includes opening inventory, a grand opening marketing program, training expenses, miscellaneous opening costs and additional funds for the first 3 months.
Total investment. The franchisor’s published Item 7 table estimates a total of $546,637 to $1,060,537:
- Initial franchise fee: $30,000
- Security deposit under lease: $2,000 to $11,000
- One month’s lease rent and real estate expenses: $2,000 to $11,000
- Architectural drawings: $30,000 to $38,500
- Leasehold improvements and construction: $26,500 to $426,000
- Furniture, fixtures and equipment: $370,637 to $396,537
- Computer system: $18,000 to $23,000
- Software license fee: $4,500
- Liquor license: $0 to $10,000
- Opening inventory and supplies: $15,000 to $20,000
- Grand opening marketing program and initial marketing expenses: $25,000 to $30,000
- Training expenses: $1,000 to $30,000
- Miscellaneous opening costs: $2,000 to $5,000
- Additional funds (3 months): $20,000 to $25,000
Because equipment is a large and fairly fixed cost, the difference between the low and high ends comes mostly from the site. Lenders will size a Donatos Pizza franchise loan around your actual lease, landlord allowance and contractor bids.
Ongoing Fees and How They Affect Your Loan
Royalty. Each restaurant pays a 4% royalty, or license fee, on net sales.
Marketing fee. Restaurants contribute 5% of net sales toward marketing. In return, the franchisor provides field marketing support, in-house creative services and management of public relations, rewards, email and text programs.
Technology and other fees. The proprietary point-of-sale system is supported by the home office IT department. Item 6 of the FDD lists any recurring technology or software charges, transfer fees and renewal costs.
How lenders factor these in. Together, the royalty and marketing fee take 9% of net sales before food, labor, rent and debt service. Lenders subtract those fees, plus food and paper costs, payroll for a team of 20 to 25, rent and utilities, then test whether the remaining cash flow covers loan payments with a cushion. Third-party delivery commissions, if used, belong in the model too.
Franchisor Requirements for New Owners
The franchisor’s inquiry form asks for liquid capital of $300,000 or more and a net worth of $1 million or more. Restaurant or business management experience is preferred but not required; the franchisor says it looks for commitment to the guest experience, community involvement and a passion for food service. It also notes that it seeks larger restaurant companies able to develop larger geographies.
The approval process. The franchisor lists the steps as an initial call, an application, a visit to Columbus for a discovery day, due diligence, agreement on a territory and development schedule with submission of entity information, and then welcome into the system. Begin talking with a financing specialist during due diligence, before you commit to a development schedule.
Training and opening support. Training for owners, general managers and managers in training takes place on the job in a Donatos restaurant, with online training for team members. For a first opening, a team made up of a field trainer, a general manager and two experienced hourly team members provides three weeks of hands-on support.
Ways to Own a Donatos Pizza
Opening a new restaurant. Most new owners lease a strip-center space with the franchisor’s site selection help, build it out and open. Lenders underwrite a start-up on projections, liquidity, the lease and bids. Our overview of restaurant start-up financing covers how these loans are structured.
Buying an existing restaurant. Existing Donatos restaurants occasionally change hands, subject to franchisor approval. A buyer acquires a trained team and sales history, and the lender can underwrite actual results. See our franchise restaurant acquisition financing options and our article on buying a franchise resale.
Multi-unit development. A protected territory is available when an owner agrees to open multiple locations in an available area and keeps the opening schedule. The franchisor’s recent expansion into new regions has been driven by multi-unit agreements, so many buyers enter with a development plan rather than a single restaurant.
Financing Options for a Donatos Pizza Franchise
SBA 7(a) loans. Because Donatos is on the SBA Franchise Directory, an SBA 7(a) loan is often the first option buyers explore. One loan can cover the build-out, equipment, the franchise fee and working capital, or the purchase of an existing restaurant.
SBA 504 loans. When a buyer purchases or builds the restaurant property, an SBA 504 loan is designed for owner-occupied commercial real estate and long-lived equipment. The directory note below matters most in these deals.
Conventional term loans. Experienced operators and multi-unit groups may use a conventional business loan sized to cash flow and secured by business assets and personal guarantees.
Equipment financing. Pizza ovens, dough and prep equipment, refrigeration, make lines, automated topping and sauce equipment, hoods, point-of-sale hardware and delivery technology can be financed with terms matched to their useful life. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Pizza sales often peak around game days, holidays and school events, while food and payroll are paid every week. A line of credit can smooth those cycles and fund the pre-opening period. See our restaurant working capital options.
Build-out financing. When the site needs a full kitchen, hood and grease trap, leasehold improvements can be the deciding variable. Our article on restaurant build-out financing explains how construction draws and landlord allowances work.
Seller financing on resales. A seller may agree to carry part of the price of an existing restaurant. A seller note would need to be acceptable to the senior lender, is typically subordinate to it, and SBA rules may limit how it is structured.
SBA Loans for Donatos Pizza Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, a list of brands whose franchise agreements have been reviewed for eligibility. SBA lenders generally require a listing before they can make an SBA-guaranteed loan to a franchisee. A listing does not approve any borrower; it clears the franchise relationship for SBA review.
The listing and its note. Donatos appears under code S0514 with this note: “When the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Collateral Assignment of Lease and Consent and Agreement of Lessor may not be executed.”
What it means. In a typical leased restaurant, the franchise documents include a collateral assignment of lease and a landlord consent, which let the franchisor step into the lease if the franchisee defaults. That works when an outside landlord owns the building. When the franchisee or an affiliated company owns the property and pledges it to secure the SBA loan, those documents would give the franchisor rights in the same real estate that secures the SBA loan, so they may not be signed in that deal. For a buyer who owns the building, expect the lender and franchisor to agree on how the franchisor’s site rights are handled instead.
Application tips. Bring the FDD, franchise agreement, lease or purchase contract, contractor and equipment quotes and month-by-month projections. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
How Lenders Evaluate a Donatos Pizza Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and owners typically sign personal guarantees.
Net worth and liquidity. The franchisor’s thresholds set a floor. Lenders also look at what remains after the equity injection, because a new pizzeria needs time to build its delivery and carryout base.
Industry and management experience. Restaurant experience is preferred but not required by the franchisor. Lenders give significant credit for multi-unit restaurant or food service management, and a plan to hire an experienced general manager strengthens a first-time owner’s request.
Business plan and projections. Projections should split carryout, delivery, dine-in and catering sales, reflect seasonal peaks, staff the store for 11 a.m. opening every day and include the 4% royalty, the 5% marketing fee and any delivery commissions.
The FDD and franchise agreement. Lenders read Items 5, 6, 7, 10, 17 and 19. The FDD includes Item 19 financial performance representations; use them as a reference point, not a substitute, for your own projections.
The site and lease. Lenders want a lease term that covers the loan, signage and parking that support carryout, landlord approval for hoods and grease traps and any tenant improvement allowance in writing.
Historical financials for resales. Expect to provide several years of profit and loss statements, sales reports and the seller’s tax returns.
Kitchen Equipment and Automation
Furniture, fixtures and equipment are the largest line in the Donatos budget, which tells a lender that most of the investment sits in assets with real collateral value. The package includes pizza ovens, refrigeration, prep and make lines, hoods and the automated topping and sauce equipment the franchisor uses to keep its edge-to-edge toppings consistent.
That equipment intensity cuts both ways. It supports collateral and consistency, but replacing ovens or refrigeration mid-term is a meaningful expense. Buyers of an existing restaurant should ask about equipment age, and owners should plan for replacement through equipment financing or reserves rather than operating cash.
Multi-Unit Growth and Development Agreements
Donatos ties territory protection to multi-unit development: an owner who commits to opening several restaurants in an available area, and keeps the schedule, receives a protected territory. That makes development financing part of the plan from the start.
Lenders usually finance the first restaurant on projections, then underwrite each later unit partly on the cash flow of the open restaurants. Owners should build a capital plan that shows where the equity for each opening comes from. Our article on financing an area development agreement explains how to fund a schedule without overextending.
Real-World Scenarios
A restaurant group entering a new market. An operator of other restaurant concepts signs a multi-unit agreement for a new region. The lender underwrites the group’s existing cash flow and finances the first two Donatos restaurants with separate loans.
A veteran opening a first restaurant. A former service member uses the military discount on the franchise fee, contributes savings and finances the build-out, equipment and working capital with an SBA 7(a) loan.
A buyer acquiring an established restaurant. A buyer purchases an operating Donatos with years of sales history. The lender underwrites actual results, the franchisor approves the transfer and the seller carries a small subordinate note.
An owner buying the building. An experienced franchisee buys a freestanding building with an SBA 504 loan. Because the real estate secures the SBA financing, the lender and franchisor address the directory note before closing.
Common Mistakes to Avoid
- Budgeting leasehold improvements from the low end before seeing contractor bids
- Leaving the 5% marketing fee or delivery commissions out of projections
- Signing a development schedule without a capital plan for each opening
- Underestimating the staffing needed to open daily at 11 a.m.
- Overlooking the directory note when the real estate will secure the loan
- Leaving too little working capital for the first months
For more pitfalls across the industry, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Donatos Pizza Franchise
Step 1: Confirm your qualifications. Verify the liquid capital and net worth thresholds and whether you qualify for the military discount.
Step 2: Review the FDD with advisors. Study Items 5, 6, 7, 10, 17 and 19 and the franchise agreement with an attorney and accountant.
Step 3: Talk with a financing specialist. Learn how a Donatos Pizza franchise loan would be sized before you agree to a development schedule.
Step 4: Secure a site and quotes. Work with the franchisor on site selection and get contractor and equipment quotes.
Step 5: Build projections. Model sales by channel month by month with all fees, labor and rent.
Step 6: Apply and close. Submit your request with financial statements, tax returns, the lease, bids, projections and franchise documents.
Donatos Pizza Franchise Loan FAQs
How much does it cost to open a Donatos Pizza?
The franchisor’s published Item 7 table estimates $546,637 to $1,060,537, depending mostly on the site and build-out.
What is the Donatos franchise fee?
The initial franchise fee is $30,000, with a military discount available on the first location.
What royalty does Donatos charge?
A 4% royalty on net sales, plus a 5% marketing fee on net sales.
How much liquid capital do I need?
The franchisor asks for $300,000 or more in liquid capital and a net worth of $1 million or more.
Is Donatos eligible for SBA loans?
Yes. It is listed on the SBA Franchise Directory under code S0514, so franchisees may apply for SBA 7(a) and 504 financing, subject to lender approval.
Does Donatos offer financing?
The franchisor’s materials do not describe a financing program. Check Item 10 of the current FDD; most buyers arrange their own loans.
Can I finance equipment separately?
Yes. Ovens, refrigeration, make lines and technology can be financed with equipment loans or leases.
Can I buy an existing Donatos?
Yes, subject to franchisor approval and the transfer terms in the franchise agreement. Lenders underwrite the restaurant’s actual history.
Can a first-time owner get a Donatos Pizza franchise loan?
Yes. Restaurant experience is preferred but not required, and lenders weigh liquidity, credit, management background and the business plan.
How long is the franchise term?
10 years, with a 10-year renewal option.
Can I get a protected territory?
Yes, if you agree to open multiple restaurants in an available area and keep the opening schedule.
What documents will a lender need?
Tax returns, a personal financial statement, bank statements, a résumé, the FDD and franchise agreement, the lease, bids and projections.
Final Thoughts
Donatos offers buyers something lenders appreciate: a long operating history, a transparent cost table and a moderate royalty. Buyers who meet the capital thresholds, budget the build-out from real bids, plan the equity for each unit in a development schedule and line up financing early give themselves the best chance at a smooth opening.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital for established brands. Learn more about our franchise financing and restaurant financing solutions.
