Background on Krispy Kreme and its Global Strategy
Krispy Kreme, a U.S.-based multinational doughnut and coffee shop chain, is exploring the possibility of franchising its operations in Mexico as part of a global growth strategy, according to Josh Charlesworth, the company’s president and CEO.
Acquisition of Mexican Operations in 2019
In 2019, Krispy Kreme Doughnut Corporation acquired Nexxus private equity fund’s stake in Krispy Kreme México, which was previously operated by Taco Holding, a restaurant industry company.
Seeking Local Partnerships for Expansion
During a conference with analysts, Charlesworth explained that the company is currently searching for opportunities to collaborate with new local operators to expand its presence in Mexico and other markets, including Australia, New Zealand, Japan, the United Kingdom, and Ireland.
“At an international level, we are advancing in our strategy of light-capital franchises. We believe that the best way to drive global growth is by partnering with strong local operators who bring regional scale and experience,” Charlesworth said.
He emphasized that the markets where Krispy Kreme aims to grow through franchises have significant long-term expansion potential, but they need to find the right partner.
“So we will take our time to find that partner,” he added.
Financial Benefits of Franchising
Charlesworth explained that revenues generated by franchises in new markets will help reduce the company’s debt and strengthen its financial position.
He mentioned that the company’s master franchise partners in emerging markets like Brazil, France, and the Middle East continue to grow with solid results.
“Last week, we opened in Brazil, and just in the first two days, Krispy Kreme’s global appeal was on full display with $100,000 in sales, surpassing our 2023 launch in France,” the executive assured.
Krispy Kreme’s Entry into the Brazilian Market
Krispy Kreme arrived in the Brazilian market through its light-capital franchise model at the end of April, in partnership with AmPm de Ipiranga, the country’s largest convenience store chain.
Under the agreement, AmPm’s extensive network of over 1,500 outlets in Brazil will be leveraged. The first store opened in São Paulo.
Key Questions and Answers
- What is Krispy Kreme’s global growth strategy? Krispy Kreme aims to expand its presence in various markets, including Mexico, Australia, New Zealand, Japan, the United Kingdom, and Ireland, by partnering with strong local operators.
- Why is Krispy Kreme considering franchising in Mexico? The company believes that partnering with local operators will help drive global growth and take advantage of the significant long-term expansion potential in Mexico.
- How will franchising benefit Krispy Kreme financially? Revenues from new franchises will help reduce the company’s debt and strengthen its financial position.
- What is Krispy Kreme’s recent expansion in Brazil? Krispy Kreme entered the Brazilian market through a light-capital franchise model in partnership with AmPm de Ipiranga, leveraging their extensive network of over 1,500 outlets. The first store opened in São Paulo, achieving $100,000 in sales during its first two days.
