Transactions & News

The Bottom Line: NewSpring Invests in Federal Donuts

NewSpring (the “Firm”), a family of private equity strategies, today announced that NewSpring Franchise, the Firm’s dedicated strategy focused on investing in innovative franchise and multi-unit concepts, has completed a growth equity investment in Federal Donuts.

Federal Donuts is a Philadelphia-based culinary pioneer in the fast-casual space with donuts, fried chicken, and coffee

Founded in 2011 by five hungry Philadelphians whose lives were changed by donuts—partners Tom Henneman, Steve Cook, Michael Solomonov, Felicia D’Ambrosio, and Bob Logue—Federal Donuts packages culinary excellence into a spirited fast-casual restaurant. Its affordable comfort classics and unexpected flavors make Federal Donuts an institution in the Greater Philadelphia area, currently with eleven locations, including inside Whole Foods Markets and sports and entertainment arenas.

“In 2011 when Steve, Mike, Bobby, Felicia, and I bootstrapped this business on a quiet corner in South Philadelphia, we couldn’t have imagined what Federal Donuts would become. We have a product that people love and we love to serve. Since 2020, we’ve opened three beautiful new stores in Center City that we’re really proud of. Taking this next step to partner with NewSpring will give us the opportunity to be a part of so many more neighborhoods and fulfill our potential.”
— Tom Henneman, Partner and CEO of Federal Donuts

The investment will be used to activate the brand’s growth in new and existing markets

By partnering with NewSpring, Federal Donuts will gain access to capital, infrastructure, technology, and additional resources that will facilitate its continued growth. With this investment, Federal Donuts will focus on opening new locations throughout the Mid-Atlantic and beyond.

Steve Cook, Partner of Federal Donuts and Co-owner of CookNSolo Restaurants, remarks, “We’ve been doing this for 20 years, and Federal Donuts is the most fun we’ve ever had in the restaurant business. NewSpring really understands our industry, and we’re going to have a lot of fun building FedNuts’ next chapter together.”

Federal Donuts joins the ranks of other fast-growing, well-known consumer brands in the NewSpring Franchise portfolio

NewSpring Franchise invests in capital-efficient, consumer-facing, and fast-growing multi-unit businesses with exceptional management teams in the lower-middle market. With their most recent investment in Central Bark, the NewSpring Franchise General Partners continue to support several fast-growing, multi-unit concepts, including Duck Donuts, Blo Blow Dry Bar, and Turning Point.

“Federal Donuts has an outstanding culinary and customer experience with proven unit-level economics that will support the brand’s continued rapid growth. Combined with the James Beard award-winning excellence Michael, Steve, and Tom bring to the table, the company is well-positioned to broaden its consumer demographic in new and existing markets through geographic and product expansion. We’re very excited to partner with these leading restaurateurs, including Tom Henneman, who will continue in his role as CEO, to accelerate the growth of Federal Donuts.”
— Satya Ponnuru, NewSpring General Partner

The company is led by a highly experienced, talented, and aligned management team

Federal Donuts CEO Tom Henneman, Steve, and Mike maintain an ownership position in the business and will stay closely involved in both strategic and day-to-day operations. As part of the transaction, NewSpring Franchise General Partner Satya Ponnuru, NewSpring General Partner Patrick Sugrue, and Jeff Benjamin, the Co-Founder and COO of Vetri Management Corp, will join the Federal Donuts Board of Directors.

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