Shipley Do-Nuts will serve cold brew, as well as hot and iced coffee options in its stores beginning this summer.
An iconic Texas donut brand is building up its team and preparing to make a push into coffee to get ready for its goal to more than double its number of stores in the Southeast.
Shipley Do-Nuts, a well-known donut and kolache chain based in Houston, underwent a change in leadership last year after being family-owned since its inception in 1936. Now, CEO Clifton Rutledge intends to significantly grow the brand, “so that the rest of the parts of the country can learn about this great product,” Rutledge said.
Rutledge said Shipley has 350 new commitments signed to open stores in the next five years, and the company expects 30 or so of those stores to open this year. The company recently signed three agreements to bring 55 stores to Georgia and Maryland, and signed a deal with HPL Capital last year to bring 25 locations to the Dallas-Fort Worth market.
The brand has more than 330 locations open today in 10 states, the bulk of which are in Texas. Rutledge declined to state average unit sales.
The company has brought on a new leadership team since equity firm Peak Rock Capital purchased the brand, as well as more than 50 new employees. Lawrence Shipley III, the founder’s grandson, was running the company prior to the acquisition last year.
Shipley founder Lawrence Shipley, Sr., created his signature donut recipe in 1936, and opened the first Shipley store in Houston in the 1940s. Before the store opened, he was selling donuts for five cents a dozen.
The company was soon known for its hot glazed donuts. The founder’s goal was to serve the glazed donuts hot, of which he said, “When they bite into the hot donut, it will bring them back every time,” according to the company.
Shipley Do-Nuts has more than 60 varieties of donuts sold in its stores.
The founder’s son, Lawrence Shipley, Jr., took over the company before his son took over the company.
Rutledge, who has worked in the industry for 44 years since he was a busboy at 14, came to Shipley from Jack’s Family Restaurants, where he worked as the COO. He previously worked at Bojangles Restaurants and Whataburger.
“It’s all I’ve ever done,” he said.
COO Hank Simpson joined the company about a year ago as well. Before that, he spent 18 years with Panera.
Shipley is soon shifting into a new market: coffee. The brand will roll out coffee—iced and hot options—in its Houston market before expanding to the rest of its stores.
The move is Shipley’s first major rollout since adopting its new leadership last year, Rutledge said.
“It’s never been an emphasis in the past,” Rutledge said. “We’re really excited about this.”
The addition of coffee comes in part to compete with other breakfast and bakery chains, but when it comes to Shipley’s 60-plus donut varieties, Rutledge said he believes Shipley’s are the best around.
To support Shipley’s 200 franchisees, the company aids in training new teams when the time comes, Rutledge said. Shipley also recently implemented a new POS system across the board and is expanding its ordering features to allow for mobile and third-party ordering—a move Shipley believes will drive sales.
The new system also allows Shipley’s to have universal gift cards and loyalty cards, Simpson said.
“That was one of the first things we did,” Simpson said.
Shipley famously stylizes the word donuts as “do-nuts,” sparking the inspiration for its new advertising campaign, “Do-Happy.”
Simpson said the Do-Happy ads speak to the brand’s mission to “make life delicious.”
“I don’t know many people that are sad after a donut,” Simpson said.
The campaign spans the website, with more play on words with the brand’s “do-“ prefix. There’s Do-find-yours,” which gives indecisive customers the opportunity to spin a wheel—called the Do-nut-doohickey—with Shipley’s dozens of donut varieties. There’s also “Do-swagger,” where customers can shop the brand’s merchandise.
The total estimated investment to own a Shipley franchise, not including real estate, is $450,000 to $800,000.