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Randy’s Donuts Builds a Local Base

Trio of OC spots; NB owner

If you’ve driven on the 405 Freeway in Inglewood, no doubt you’ve seen the iconic giant donut atop the roof of the flagship Randy’s Donuts building, a landmark that air travelers can see just before landing at LAX Airport.

Orange County got its own giant donut last year, when Randy’s Donuts opened its first local location on Harbor Boulevard in Costa Mesa. The brand has been expanding thanks to a franchising push by its Newport Beach-based owner, Mark Kelegian, who bought Randy’s Donuts in 2015 to run as a family business.

The operations of Randy’s, bought and operated by Keligian under the Sansmark Inc. name, now has a trio of locations in OC, and counts about a dozen locations along the West Coast.

Along with a new spot in Las Vegas, it is also branching out internationally, with locations coming to Paris, South Korea, Saudi Arabia and the Philippines.

 

Casinos to Calories

Kelegian comes from a family that’s owned a number of area casinos over the years, including the Ocean’s Eleven Casino just off the San Diego (5) Freeway in Oceanside, and the Commerce Casino in Los Angeles.

When looking for other opportunities, he said he had been scrolling through a website that lists businesses for sale and came across a listing for a 50-year-old restaurant.

He called the phone number, a voice answered and said, “Randy’s Donuts.”
After learning the selling price—reported at around $2 million—and annual sales figures, Kelegian snapped the business up, knowing he was getting an iconic brand that could be expanded.

“I wasn’t necessarily looking for something to franchise, but once I realized it was Randy’s, I was ready to go,” Kelegian said. “Donuts are not only a comfort food, they’re very high value, the price point is so low that you get a lot of bang for your dollar. For $2 you can be pretty happy—you get a lot of comfort for $2.”

Thanks to Kelegian, Randy’s Donuts is ranked No. 25 of the 2022 Top New & Emerging Franchises in Entrepreneur Magazine. Kelegian has also been named by Nation’s Restaurant News as one of the Most Influential Restaurant CEOs in the country.

According to the company’s website, the cost of opening a franchise can range from about $250,000 for a nonbaking franchise store, to around $1 million for a drive-thru location. Franchise fees for the first store is $35,000, and the royalty fee is 5% of gross sales.

 

Costa Mesa, Santa Ana

Kelegian’s OC influence includes a second Randy’s Donuts that opened earlier this year in Santa Ana, and a third that opened last week at 401 E. 17th St. in Costa Mesa.

If the Costa Mesa address sounds familiar, it’s the former location of Fork & Knife, the restaurant opened last year by Jonathan Blackford, the 2021 Business Journal Chef of the Year.

Blackford closed his restaurant last month and moved to Jacksonville Beach, Fla., for what he said was a more welcoming and financially viable business climate.

The Santa Ana and 17th Street locations—not far from another noted donut hotspot, Sidecar Doughnuts—are franchised owned and operated by Kavon Azhir, who noted that “Randy’s Donuts is a household name that generations of families have enjoyed for 70 years.”

Azhir is betting that Randy’s Donuts remains popular for another 70 years while he looks for more cities hungry for Randy’s Donuts.

Randy’s Donuts offers over 60 different varieties of classic, deluxe, fancy and premium donuts available, with many priced under $2.

Visit at www.randysdonuts.com.

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