Midlands-based doughnut firm Doughnotts has secured a six-figure debt funding package to support its next phase of growth, which includes franchising.
The funding from Maven-managed Midlands Engine Investment Fund II will help the business to develop a structured franchise model in partnership with Ashtons Franchise Consulting.
The debt finance will also be used to refurbish and equip stores in line with franchise requirements and to provide additional working capital as the business expands.
“The funding enables us to formalise our franchise model, invest in our store estate and continue expanding the Doughnotts brand into new locations,” said co-founder Wade Smith.
“We have built a loyal customer base since founding the business in 2015, and this support gives us the confidence and capability to take the brand into its next chapter.”
Founded in 2015, Doughnotts has grown from a small kitchen start-up to a multi-site retail operation with six stores across Nottingham, Lincoln and Beeston. Its doughnuts are manufactured from a production site in Nottingham from which it supplies its estate as well as a range of local cafés and eateries, including retail partners such as the Co-op.
The company specialises in handcrafted doughnuts produced using a 100% vegan dough base. The menu features seasonal ranges and limited-edition flavours, recently including Peppa Pig, Maple & Bacon, and Mint Feast varieties, to name a few.
“Doughnotts has developed a distinctive regional brand built on product quality and strong customer loyalty,” added Sabrina Mahmood, investment manager at Maven. “We were particularly impressed by the clarity of the growth strategy and the scalability of the franchise model alongside an established retail network.”
The funding is structured in a way to provide the flexibility required to scale in a measured and sustainable way. This “reflects our confidence in the strength of the management team and the business model”, Mahmood added.
Bombo Doughnuts
Another recent successful funding story in the sector comes from Margate doughnut shop Bombo Doughnuts.
Founder Gareth Parker previously worked as the CEO of a football charity in London but following a daytrip to Margate in 2023 relocated and opened a doughnut shop. Parker and his business partner collectively took out £42,900 from the Start Up Loans programme, part of the British Business Bank, using the capital to help buy the machinery and put a deposit down on a space for the store.
Since opening in spring 2024, the business has expanded, selling doughnuts at pop-ups, markets and events, alongside the store, and recently secured a contract to supply a major football stadium. It is also gearing up to open a new site and launch the Bombomobile soon.
“The initial capital expenditure required for food manufacturing can be high, and our first loan was crucial in helping us get started,” said Parker. “Demand for our product has been incredible – so strong, in fact, that we recently secured another loan to double our manufacturing capacity just to keep up.”
He added that his previous role as CEO of a football charity gave him valuable contacts which helped the business secure a contract with Emirates Stadium.
“We’re also in conversations with a few other football clubs and stadia. We began as a shop in Margate less than two years ago, and we’re already seeing just how scalable the concept can be.”
The firm also recently completed an initial investment round which will help accelerate its growth.
It comes as the Start Up Loans programme announces that it has delivered over £150m in funding to founders of small businesses across the south east, marking an impressive regional milestone.
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