Krispy Kreme Doughnut Corporation is the franchisor. Krispy Kreme stores offer for sale a variety of fresh doughnuts, beverages, and other food and drinks corresponding with our concept, on-premise basis. There are four formats to operate Krispy Kreme stores.
- Factory Store: the retailer that produces on-site doughnuts under the franchisor’s standards. Besides, Factory Stores may supply fresh doughnuts to Tunnel Oven Shops and Fresh Shops.
- Tunnel Oven Shop: retailer with an impinger oven and limited manufacturing capabilities (e.g., icing and filling equipment). They finish doughnuts as necessary that they receive from a Factory Store or a Commissary Facility.
- Fresh Shop: retailer with no manufacturing capabilities limited or manufacturing capabilities (e.g., icing and filling equipment). They finish doughnuts as necessary that they receive from a Factory Store or a Commissary Facility.
- Box Shop: retailer with no manufacturing capabilities. They receive doughnuts from a Factory Store or a Commissary Facility and sell them following the system standards. Box Shop is a prefabricated, free-standing, self-contained unit reminiscent of the Krispy Kreme donut box. Usually located in an enclosed retail area.
We also offer Commissary Facilities. Commissary Facilities produce doughnut products for Tunnel Oven Shops, Fresh Shops, Box Shops, and can’t be used for retail sales.
According to the Franchise Agreement and the Commissary Facility Agreement, the franchisor will provide initial training on the operation of a store or commissary facility. Training can attend and successfully complete the operations director, one general manager, one assistant general manager (or equivalent), up to four supervising employees in multiple units (e.g. a district manager).
The franchisor will designate where the initial training program is provided: training facility and/or at an operating store/commissary facility. At the moment, the initial training program for store and commissary facility managers is held in Winston-Salem, North Carolina, and in a few selected store locations.
The initial training program is approximately 16 weeks for factory stores, but the term can be changed for tunnel oven shops, fresh shops, box shops, commissary facilities. The franchisor may require managers to attend and complete periodic and additional training programs. At the opening of the store or commissary facility, the franchisor’s team will assist franchisees for at least seven days.
Territory Granted: The franchisee has the right to own and operate a store (a commissary facility) at a specific location under the Franchise Agreement and Commissary Facility Agreement. The Franchise Agreement and Commissary Facility Agreement doesn’t grant any exclusive territory.
Other franchisees, outlets the franchisor owns, or other channels of distribution, or competitive brands that the franchisor controls can compete with franchisees. Franchisees only allowed on-premises sales from the store; the commissary facility can’t be engaged in any sales activities. The exception is cases noted in the FDD concerning authorized off-premises sales and authorized fundraising sales.
Obligations and Restrictions: The franchisor does not require that franchisees (managing shareholder/partner) personally participate in the direct operation of the store or commissary facility. But according to the Franchise Agreement and Commissary Facility Agreement, franchisees must appoint a general manager.
The general manager must directly supervise on-premise the store or commissary facility. To the franchisor’s satisfaction, the general manager must complete initial and periodic additional training. At its own discretion, the franchisor may require that the operations director to own up to 25% in the store or commissary facility or franchise, if a franchise is any form of a corporation, limited liability company, or partnership.
In Krispy Kreme stores only those products that the franchisor approves or specifies can be sold or distributed. It is forbidden for franchisees to sell any products that are not approved by the franchisor. All products that are required for sale by the franchisor, franchisees must offer for sale.
Term of Agreement and Renewal: The duration of the initial franchise term is 15 years from the opening date for both the store and commissary facility. After that term, the franchise agreement is possible for renewal for 15 years on then-current conditions if a franchisee is in good standing.
Financial Assistance: The franchisor or any agent or affiliate does not offer any direct or indirect financing to franchisees. The franchisor or any agent or affiliate does not guarantee any notes, leases, or other obligations franchisees make. The franchisor does not receive direct or indirect payments for placing financing.