4 ms·

Better question- if this is so profitable why the hell aren't there more Krispy Kreme spots?

astura 7y ago
There used to be, most of the locations went out of business around 10-15 years ago. Corporate was screwing over their own franchisees and making bad business decisions that saturated the market. On top of that corporate was cooking the books. The result was the company lost 80% of it's value and most franchises couldn't stay open. https://www.marketwatch.com/story/rise-and-fall-of-biggest-krispy-kreme-franchisee https://www.marketwatch.com/story/rise-and-fall-of-biggest-k... https://en.wikipedia.org/wiki/Krispy_Kreme https://en.wikipedia.org/wiki/Krispy_Kreme >Krispy Kreme also had supermarkets and gas stations carry their donuts, which soon contributed up to half of the chain's sales, creating further market saturation as well as increasing competition to its franchisees. All this expansion devalued Krispy Kreme brand's novelty, by making the once-specialty donuts ubiquitous, particularly as the newer sales outlets required pre-made donuts as opposed to the ones made fresh in factory stores, which alienated brand devotees. >Besides royalty payments from new stores, the parent company also enjoyed significant profits by requiring franchisees to purchase mix and doughnut-making equipment from the parent's Krispy Kreme Manufacturing and Distribution (KKM&D) division. KKM&D earned $152.7 million in 2003, which made up 31 percent of sales, with a reported operating margin of 20 percent or higher, but these mark-ups were largely at the expense of its franchisees. >Krispy Kreme has been accused of channel stuffing by franchisees, whose stores reportedly "received twice their regular shipments in the final weeks of a quarter so that headquarters could make its numbers".[9] The company was also dogged by questionable transactions and self-dealing accusations over the buybacks of franchisees, including those operated by company insiders.
- moftz 7y ago
  I think even the boxes you bought in the grocery store had a note about microwaving them for 8 secs to mimic the hot and fresh donuts available at the franchise locations.

There used to be, most of the locations went out of business around 10-15 years ago. Corporate was screwing over their own franchisees and making bad business decisions that saturated the market. On top of that corporate was cooking the books. The result was the company lost 80% of it's value and most franchises couldn't stay open. https://www.marketwatch.com/story/rise-and-fall-of-biggest-krispy-kreme-franchisee https://www.marketwatch.com/story/rise-and-fall-of-biggest-k... https://en.wikipedia.org/wiki/Krispy_Kreme https://en.wikipedia.org/wiki/Krispy_Kreme >Krispy Kreme also had supermarkets and gas stations carry their donuts, which soon contributed up to half of the chain's sales, creating further market saturation as well as increasing competition to its franchisees. All this expansion devalued Krispy Kreme brand's novelty, by making the once-specialty donuts ubiquitous, particularly as the newer sales outlets required pre-made donuts as opposed to the ones made fresh in factory stores, which alienated brand devotees. >Besides royalty payments from new stores, the parent company also enjoyed significant profits by requiring franchisees to purchase mix and doughnut-making equipment from the parent's Krispy Kreme Manufacturing and Distribution (KKM&D) division. KKM&D earned $152.7 million in 2003, which made up 31 percent of sales, with a reported operating margin of 20 percent or higher, but these mark-ups were largely at the expense of its franchisees. >Krispy Kreme has been accused of channel stuffing by franchisees, whose stores reportedly "received twice their regular shipments in the final weeks of a quarter so that headquarters could make its numbers".[9] The company was also dogged by questionable transactions and self-dealing accusations over the buybacks of franchisees, including those operated by company insiders.

moftz 7y ago
I think even the boxes you bought in the grocery store had a note about microwaving them for 8 secs to mimic the hot and fresh donuts available at the franchise locations.