Krispy Kreme Doughnuts Inc has seen the light and is adopting a franchised expansion plan for its domestic growth.
The US-based chain believes franchisee performance has been superior to company-operated store performance.
Krispy Kreme CEO Tony Thompson told Nation’s Restaurant News, “Domestically our franchisees continue to outperform our company shops. We believe that by focusing more on franchising we will be in a greater position to maximise the value of the brand for the long term.”
The figures from the fourth quarter to January 31 this year showed franchisee same-store sales had boosted by 2.5 percent while company-owned outlets reported a 0.2 percent growth.
Of the 297 outlets in the US, 181 are franchised; all 824 international sites are franchised.
To fulfil the potential of the franchise model Krispy Kreme will be undertaking changes to company culture and unit profitability.
The doughnut business will be reducing the investment costs for new stores, and plans to improve the customer flow within outlets to help boost beverage sales, with a particular focus on increasing coffee’s contribution to turnover.
“Everything we’re doing to our new shop model is geared toward driving franchisees’ return and profitability,” Thompson told NRN.
Krispy Kreme plans to employ more full time staff in its company-owned outlets to improve the level of service, and to work on loyalty programs and a mobile platform to better engage customers.