Sweet Deal: Contributing to the Rise of Federal Donuts

It takes just the right mix of high-quality ingredients to make a delicious donut.

The same can be said for a successful business partnership.

So it was crucial to find the right partner to support a national expansion of Federal Donuts—the wildly popular culinary pioneer that serves up staples of donuts, fried chicken, and coffee at 11 locations in the Greater Philadelphia area.

Fortunately, Federal Donuts’ longtime counsel, Ballard Spahr’s Greg Seltzer, is dialed into the venture capital community in Philadelphia and nationally. Co-leader of the firm’s Emerging Companies and Venture Capital practice, Greg realized he knew of a good fit for a growth equity investment in Federal Donuts’ parent company, CookNSolo. The company is owned by renowned Philadelphia restaurateurs Steve Cook and Michael Solomonov—a James Beard Award winner for best chef in the country.

Greg and the leaders of Radnor, Pa.-based NewSpring knew each other from the VC space. Greg saw potential in a Federal Donuts alliance with NewSpring Franchise, the firm’s strategy focused on innovative franchise and multi-unit concepts.

“I thought it would be a nice strategic fit for our client,” Greg said. “As lawyers, we actually get out there and add value and make introductions for our clients.”

Through pandemic hiccups and other transactional twists and turns, Greg and the Ballard Spahr legal team helped keep the deal cooking. Last week, NewSpring formally announced its growth equity investment in Federal Donuts. The Ballard Spahr team working with Greg on the project included Christopher J. DePizzo, John J. Eagan, Jessica Laderman Origlio, and Aron Mozes.

Federal Donuts plans to use the investment to fill a hole in the fast-casual space nationally with growth beyond its Philly roots to the rest of the mid-Atlantic region and beyond.

It was the latest of Ballard Spahr’s work for CookNSolo. In addition to Federal Donuts, the company’s nine restaurants include Zahav in Philadelphia—a James Beard Award winner for best restaurant in the country. Greg and Ballard Spahr have advised Federal Donuts since its founding in 2011 by what the company describes as “five hungry Philadelphians whose lives were changed by donuts—partners Tom Henneman, Steve Cook, Michael Solomonov, Felicia D'Ambrosio, and Bob Logue.”

“Greg Seltzer and the entire Ballard team were instrumental in getting this transaction closed for Federal Donuts,” Steve Cook said. “Their professionalism and practical approach to deal-making made for a seamless process that achieved our objectives in a timely manner.

“As a small company, we were pleased to find that Ballard provided Federal Donuts with the best of both worlds: A large firm with deep expertise in all aspects of the transaction, along with a small deal team that was accessible, responsive, and a pleasure to work with.”