How much is a Krispy Kreme Franchise
Krispy Kreme is a successful doughnut business because of its strong brand name and unique vertical production design.
A chance of having a Krispy Kreme franchise is a very interesting choice for many aspiring entrepreneurs or investors, but they have to comply with a challenging price.
The Krispy Kreme Corporation has a strict set of criteria for all interested franchisees. One of this is that the interested franchisee must have an adequate amount of money in financing an entire market of Krispy Kreme stores, with at least ten stores in each market. The Krispy Kreme Corporation requires the interested franchisee to contain substantial working experience in terms of food service operations and to sign an area agreement in which they promise to give their best full-time efforts to make sure the success of their Krispy Kreme market.
A payment of about $1.35 million is required to open a Krispy Kreme Doughnut franchise, in case your file for application is approved. The said payment covers the fees for the furniture and fixtures, the equipment used in making the doughnuts, which is manufactured by Krispy Kreme themselves, and the initial inventory, which consists of sacks of dough conditioner and malted barley flour. The equipment approximately costs $350,000. The payment mentioned in here is about five times the rates set by the International Franchise Association or IFA for operations. The payment mentioned still excludes the payment required for the real estate, which costs approximately $500,000. Due to this alone, it said that Krispy Kreme has the most expensive franchise costs so far. This is a financial challenge imposed on all the aspiring franchisees who would like to have their own versions of the Krispy Kreme.
Internet articles claim that the amount of sales in a Krispy Kreme franchise is significantly high on just its first opening weeks. Krispy Kreme stores are declared to be very popular to the extent that many franchises around the world are vying for the record of the fastest and highest first-week sales. This trend generally goes on and on for most of the Krispy Kreme franchises being opened. This still happens despite the observations of some Krispy Kreme officials that there exists in each of their franchises a 12-month rest or honeymoon period before the sales gain an increasing trend. In 2001, Krispy Kreme reports that a franchise, on average, makes revenue of about $43000, or about $2.2 million per year. The reports of the following year emphasized a significant increase of the average revenue of the franchises, tallying of about $60000 to $70000 per week, or about $3.4 million a year. A record of $8 million is known to be the best record so far in Krispy Kreme franchising history, but this would have been broken since the revenue trend continues to increase per period of time.
These figures imply to us, especially the aspiring franchisees, that to own a Krispy Kreme franchise is do gamble a lot in terms of the financial aspect. Since Krispy Kreme has this characteristic, one would have to exert a great effort of money management so that the financial burdens will be lessened.