How much does a Krispy Kreme franchise cost and make? Is Krispy Kreme closing? Do you want to own one?
July 13 1937 Vernon Rudolph bought a magical yeast raised doughnut recipe from a French chef, rented this building in Winston-Salem, North Carolina, and began selling Krispy Kreme doughnuts to local grocery stores. The small coming from the small store was so good people would stop in and ask if they could buy donuts. So Vernon cut a hole in the outside wall of the building and started selling to customers on the sidewalk.
In the 40's and 50's a small chain of Krispy Kreme were in operation and each store made its own doughnuts BUT, the quality was inconsistent. So Vernon built a mix plant and delivered the same dry mix to the stores to each store. The company built special automated equipment over the years that would become Krispy Kreme's specialty.
The 60's saw Kripsy Kreme expand across the Southeast and the founder passed in 1973. Beatrice Foods acquired the company in 1976. As is often the case with big corporations they tried to cut costs by changing the recipe and changing the signage. Franchisees were not happy and formed a group that re-acquired Krispy Kreme in 1982 and went back to the original ways.
New York opened in 1996, California in 1999, Canada was the first international location and at one point Krispy Kreme had over 700 locations Internationally and became publicly listed in 2000.
Within a few years of listing shares were up to around $50 and Krispy Kreme was making 3 billion donuts a year. It was then that Krispy Kreme got busted by the SEC for securities violations. According to the SEC Between approximately February 2003 and May 2004, Krispy Kreme fraudulently inflated or otherwise misrepresented its earnings for the fourth quarter of its 2003 fiscal year. Krispy Kreme was actually forbidden to open any new stores in the USA until they cleaned up their finances. Combined with the low carb craze at the time, and the ability to buy them at local grocery stores started to close.
Recently Krispy Kreme had to pay more than 1.1m to 516 workers after the Department of labor found one store was violating overtime and minimum wage laws. When they expanded their search they found the violations were widespread and systemic and expanded the probe to all corporate and franchisee owned stores nationwide.
Krispy Kreme was also sued for not having real blueberries or maple syrup in their donuts which was settled, and you ight remember the Krispy Kreme KKK promotion was pretty badly received in social media. The company also closed its main Processing plant and laid off 102 workers leaving the retail shelf stable snack-aisle business after less than three years.
As of 2021 Krispy Kreme was down to 123 stores in the USA notice they closed 82 franchisee owned stores over the past 3 years and have intentions to close at least dozen more. It is possible Krispy Kreme will be under 100 franchisee owned stores in the USA in the future. In Australia Krispy Kreme does not have franchisee owned stores all are owned and operated by corporate.
The cost to buy a Krispy Kreme Hot Light Theater store ranges between 2,015,000 4,330,000 and $622,500 - $1,798,000 for a fresh shop. Interestingly Krispy Kreme does not list their average earnings in their disclosure which is a bit of a red flag, however the QSR50 suggests average unit volumes are 2.7m per store which I assume also includes corporate owned stores and franchisee owned stores as they are closing so many are making a lot less. Compared to similar investments you have Shake Shake at average unit volumes of 3.8m, a Marcos Pizza location average just under 1 million.
Is Krispy Kreme a good investment? It depends many factors including local demand, operator budget and other factors, but for the same investment you could theoretically buy up to 20 service based franchises at under $100k each some that show 1 million per location averages.

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