- 2023 Franchise 500 Rank
N/R Not ranked last year
- Initial investment
$275K - $1.9M
- Units as of 2016
1,172 48.5% over 3 years
Start Krispy Kreme Franchise | Cost and Requirements
Are you dreaming of owning your own business? Considering entering into the franchise game? Krispy Kreme is royalty when it comes to delicious, melt-in-your-mouth donuts in the franchise world.
Krispy Kreme might be the perfect pick for a new franchise if you love fresh doughnuts and have entrepreneurial aspirations. Stay tuned as this article walks you through all the need-to-know information on becoming a Krispy Kreme franchise owner.
What Is Krispy Kreme’s Mission?
Krispy Kreme is committed to making the best donuts on the planet. They are known for their sweet, fluffy, original glazed doughnuts and other delicious flavors.
Krispy Kreme values making people feel good and making donuts the right way, with factory store locations and a fresh shop atmosphere.
What Is Krispy Kreme’s Story?
The French are known for their culinary expertise, especially their pâtisseries — the famous bakeries that produce sweet croissants, macarons, madeleines, and éclairs. Krispy Kreme’s original owner, Vernon Rudolph, knew this and bought a secret donut recipe from a French chef in 1937.
Rudolph purchased a building in Winston-Salem, North Carolina, where he began making the donuts to sell in local grocery stores. The smell of the donuts attracted customers near and far, so Rudolph carved a hole in his building, and began selling the donuts independently.
Krispy Kreme’s first doughnut shop was born.
In the 1940s and 1950s, the number of Krispy Kreme stores grew, and most remained family-owned. However, at one point, the business ran into a snag because the recipes from location to location were inconsistent.
To combat this issue, the company built a mixing plant and distribution system to distribute consistently-made mixes to its stores.
Through the 1960s and 70s, Krispy Kreme continued to expand, building more locations and creating its signature sign. It adopted the signature red and green colors and swept across the U.S.
In the 80s and 90s, Krispy Kreme made fresh, hot donuts a priority as they began to grow outside of the United States. Since then, it has continued to grow and has over 700 stores worldwide, as far away as Asia and in Mexico.
Ready To Own Your Own Krispy Kreme Franchise?
Krispy Kreme’s mission is to prepare fresh donuts that are the most delicious in the world. With a delectable menu full of guilty pleasures, franchisees can emphasize their menu as their business’ greatest strength.
But what else does owning a donut franchise entail? Whether you’re a new business owner or own many small businesses, opening a franchise location isn’t something you should go into blindly.
How to Know If You’re Ready To Become a Franchise Owner
Becoming a business owner takes drive, but it also requires self-reflection.
Check out these ten questions below to see if you’re ready to become a franchisee.
- Are you willing to work as many hours as possible to make your business successful?
- Do you have the stamina to keep going even when times are tough?
- Do you listen, communicate, give, and receive feedback well?
- Do you practice patience and positivity when working and interacting with others?
- Can you be a leader and a trainer for your staff and the front person for your business?
- Can you follow the franchisor’s rules, coaching, and advice even when you think your way is better?
- Can you trust the process and the idea that a franchisor is working to benefit its entire system?
If you answered yes to the majority of these questions, then opening a franchise may be right for you. To help you make up your mind, consider these pros and cons.
Pros and Cons of Becoming a Franchisee
Five benefits of becoming a franchise owner include:
- A roadmap for business success
- Built-in brand recognition
- Success rate
- Purchase benefits
- Potential for large profit margin
Five cons of becoming a franchise owner include:
- Limits of building structures and franchisor restrictions
- Limits to creativity and new ideas
- Startup costs
- Continuous investment costs
- Giving franchisor access to finances
Why Might Krispy Kreme Be a Good Franchise Choice?
With so many franchise opportunities and business opportunities, it’s vital to pick the right one for you.
A good way to sift through the choices is to figure out your values and select a company that demonstrates a mission you can get behind.
Take a look below to see what Krispy Kreme cares the most about.
Love Our People
Krispy Kreme wants its 15,000+ employees to feel safe, seen, and valued. Because of this, the company focuses on four key areas to ensure it serves (and loves) its people.
Those four areas include:
- Diversity and Inclusion: Consists of a council and employee resource group
- Equity and Access: Maintained through a global compensation strategy
- Workplace Health and Safety: Code of conduct, employee handbook, certified trainings, safety protocols, and programs
- Governance: Code of conduct, ethics hotline, risk management, crisis management, board oversight
Love Our Community
Krispy Kreme also cares about giving back. The company works every day to support the communities it operates in.
Krispy Kreme does this through the following:
- Great Quality Products: Quality assurance standards, elimination of partially hydrogenated oils, limiting trans fatty acids
- Labor Standards and Human Rights: Code of conduct, employee handbook, ethics hotline
- Community Engagement and Support:Fundraising, partnership with SeriousFun Children’s Network, employee relief fund, donating donuts to communities
Love Our Planet
Krispy Kreme takes its environmental impact seriously and is becoming a more sustainable company working to reduce its carbon footprint.
To do that, Krispy Kreme is focusing on the following:
- Responsible Sourcing: Certified sustainable coffee supplier, cage-free eggs and eggless formulations, RSPO-certified palm oil
- Packaging: Compostable coffee cups with less material, recyclable folding cartons, paper carry-out bags, and straws
- Food Waste Reduction: Landfill diversion program, food waste sent to animal feed program, water usage reduction
- Energy Use and GHG Emissions: Sustainable building materials, efficient HVAC units, LED lighting with timers and sensors, optimized delivery routes
Krispy Kreme Franchise Requirements
If you’re interested in owning a Krispy Kreme franchise, here’s what to know aboutKrispy Kreme’s initial financial requirements.
The Krispy Kreme franchise costs include the following:
- Initial Franchise Fee: $12,500 - $25,000
- Initial Investment Range: $275,000 - $1,911,250
- Liquid Capital: $300,000 - $3,000,000
- Royalty Fee: 4.5%
- Ad Royalty Fee: 1.5%
- Term of Agreement: 15 years
As you can see, owning your own Krispy Kreme is a big financial commitment, as well as a long-term commitment. However, when compared with starting your own local donut shop, the benefits of opening a Krispy Kreme location can be well worth the startup costs.
If you’re ready to move forward, take a look below.
How To Become a Krispy Kreme Franchise Owner
Krispy Kreme’s FAQ page says they are not currently offering any U.S. franchise opportunities. However, that does not mean they won’t be in the near future. Look at the step-by-step process below to prepare for those opportunities.
First, you’ll have to fill out a preliminary application with your name and contact information, answering a few questions about yourself and your experience. Keep in mind, though, you don’t have to have any experience to start a location.
Once you submit, you’ll receive confirmation of your submission, and a representative will reach out to you if you get chosen to move forward.
2. Background Checks
Krispy Kreme will run background checks on you, your background and your financial situation to ensure you’re a good fit for them. Remember that you need a net worth of $300,000 - $3,000,000 to meet Krispy Kreme’s requirements. Assuming you check all their boxes, you shouldn’t have anything to worry about with this step.
When it comes to finances:
- Krispy Kreme Doughnut Corporation offers in-house financing to cover equipment.
- Krispy Kreme Doughnut Corporation has relationships with third-party sources which offer financing to cover startup costs, equipment and inventory.
3. Find Your Location
Krispy Kreme often plays a big part in real estate selection because they have a very precise expansion plan. This can be a big weight off your shoulders as a franchisee, but ensure you agree on their parameters and contribute to the process.
When selecting a location, you should ask yourself:
- What competitors are in the area? (Think Dunkin’ Donuts, Duck Donuts, mom-and-pop shops)
- What fast-food franchises are in the area?
- Can your location offer a drive-thru option?
- Does the area get much traffic?
- Is the location easily accessible for customers?
- What are Krispy Kreme’s building guidelines for its locations?
- Will the space accommodate the design setup, equipment, and amenities?
4. Sign the Paperwork
At this point, Krispy Kreme will have approved your business plan. All that’s left to do are the final checks of their franchise agreement, and then you can hit the ground running.
Your business plan should include the following:
- Executive summary
- Analysis of market and target audience
- Operations and logistics
- Financial details
Related: How To Write A Business Plan
The franchise agreement should include the following:
- Financial Disclosure Document (FDD)
- Krispy Kreme’s business description and history
- Any previous or current litigations
- Bankruptcy history
- Costs and fees of investment
- Details on products and services
- Proprietary information, copyrights, patents
- Financial statements
- License to use Krispy Kreme’s operating system
- Length of contract and renewal agreement
- Any restrictions
Now that everything is official, it’s time to get to work. You’ve found your location and construction is happening. Now, you’re ready to learn how to run your new Krispy Kreme location.
The Krispy Kremetraining program will consist of the following:
- On-The-Job Training: 65 days
- Classroom Training: 15 days
- Additional training at training stores
5. Open Your Store
Krispy Kreme will be there to guide you through the grand opening of your location. In addition, one of the best things about franchising with Krispy Kreme is that they will continue supporting you throughout your tenure as a franchisee.
They offer ongoing resources that include:
- Toll-free line
- Online support
- Field operations
- Meetings and conventions
- Security and safety procedures
- Marketing support: national media and regional advertising
Starting your very own Krispy Kreme franchise can be an exciting business prospect. With the entrepreneurial spirit and financial capital, you can build your dream one glazed donut at a time.
Looking to explore other franchise opportunities? Check out Entrepreneur’s Franchise 500 Rankings here.
About Krispy Kreme Doughnut Corp.
|Franchising Since||1947 (76 years)|
|# of employees at HQ||300|
|# of Units||1,172 (as of 2016)|
Information for Franchisees
Here's what you need to know if you're interested in opening a Krispy Kreme Doughnut Corp. franchise.
Financial Requirements & Ongoing Fees
Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
|$12,500 - $25,000|
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
|$275,000 - $1,911,250|
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
|$300,000 - $3,000,000|
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
Term of Agreement
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
|Is franchise term renewable?||Yes|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|In-House Financing||Krispy Kreme Doughnut Corp. offers in-house financing to cover the following: equipment|
|Third Party Financing||Krispy Kreme Doughnut Corp. has relationships with third-party sources which offer financing to cover the following: startup costs, equipment, inventory|
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
|On-The-Job Training||65 days|
|Classroom Training||15 days|
Meetings & Conventions
Security & Safety Procedures
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Krispy Kreme Doughnut Corp. landed on this year's Franchise 500 Ranking versus previous years.
Are you eager to see what else is out there? Browse franchises that are similar to Krispy Kreme Doughnut Corp..
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