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.

1. Are you willing to work as many hours as possible to make your business successful?
2. Do you have the stamina to keep going even when times are tough?  
3. Do you listen, communicate, give, and receive feedback well?
4. Do you practice patience and positivity when working and interacting with others?  
5. Can you be a leader and a trainer for your staff and the front person for your business?  
6. Can you follow the franchisor’s rules, coaching, and advice even when you think your way is better?  
7. 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:

1. A roadmap for business success
2. Built-in brand recognition
3. Success rate
4. Purchase benefits
5. Potential for large profit margin

Five cons of becoming a franchise owner include:

1. Limits of building structures and franchisor restrictions
2. Limits to creativity and new ideas
3. Startup costs
4. Continuous investment costs
5. Giving franchisor access to finances

Related: 7 Things You Need to Know Before Becoming a Franchise Owner

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.

Related: Start a Krispy Kreme Doughnut Corp. Franchise in 2022 - Entrepreneur

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.

1. Application

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:

1. What competitors are in the area? (Think Dunkin’ Donuts, Duck Donuts, mom-and-pop shops) 
2. What fast-food franchises are in the area? 
3. Can your location offer a drive-thru option? 
4. Does the area get much traffic? 
5. Is the location easily accessible for customers?
6. What are Krispy Kreme’s building guidelines for its locations?
7. 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

Related: Ready to Commit? - Franchise License Agreement - Entrepreneur.com

5. Training

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:

• Newsletters
• 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.