Krispy Kreme weighs refranchising some overseas operations

Krispy Kreme Inc. is weighing refranchising some of its businesses in international markets even as it expands its distribution network in the US, chief executive officer Josh Charlesworth said. 

The company recognizes that the “best way to grow” in some overseas markets is via “local-scale master-franchise” partnerships and is evaluating refranchising some of its businesses overseas, Charlesworth told Bloomberg ahead of its fourth-quarter results.

Krispy Kreme would not comment on a media report of a possible sale of its franchise in Australia and New Zealand but said it will “continuously evaluate growth opportunities.”

Its partnership with McDonald’s Corp. — which began last year — has helped it build on existing tie-ups with retailers such as Walmart Inc., Target Corp. and Costco Wholesale Corp., Charlesworth said. 

“What McDonald’s gives us is the ability to have a nationwide footprint; whereas before, we were often a regional provider. So we can go to Walmart and say to them: ‘Hey, you know, we’re now going to be nationally available. We would like to be in more Walmarts,’” Charlesworth said.

Krispy Kreme distributed its pastries through over 1,900 McDonald’s outlets by the end of 2024 and plans to be in about 6,000 outlets by the end of this year. The target doubles to 12,000 by 2026, Charlesworth said. The company also plans to award contracts for its US logistics soon.

“We’re streamlining the operations to focus just on making the doughnuts. Today, we don’t just make the doughnuts, our drivers deliver the doughnuts,” Charlesworth noted.

Sales so far this year have been “choppy” due to weaker consumer spending, exacerbated by freezing temperatures across the US, Charlesworth said. Krispy Kreme also suffered a cybersecurity hack late last year that disrupted some of its US operations. 

The company sees 2025 net revenue of $1.55 billion to $1.65 billion, below the $1.76 billion analysts expect.