Dive Brief:
- Krispy Kreme completed a $90 million transaction on Monday with a joint venture partner, WKS Restaurant Group, that increased WKS’s ownership of Krispy Kreme’s Western U.S. joint venture from 45% to 80%, according to a Tuesday press release.
- WKS acquired 23 company-owned shops in California and Hawaii in addition to the 50 stores it operates in the Western U.S. and about 1,000 fresh delivery locations with retailers including Kroger, Target and Walmart, the press release said.
- The transaction is part of Krispy Kreme’s turnaround strategy that includes reducing its company-owned portfolio through refranchising and shifting toward a capital-light structure, CEO Josh Charlesworth said in a statement.
Dive Insight:
As part of the transaction, WKS agreed to develop additional stores and expand Krispy Kreme’s fresh delivery system in the West over the next several years. Krispy Kreme is working to ensure its U.S. growth is sustainable and profitable. Last year, the chain decreased its global points of access by 2,363 units, and ended its McDonald’s partnership, in an effort to close underperforming stores.
“By increasing our ownership stake and meaningfully expanding the joint venture’s footprint, we are reinforcing our confidence in the brand and positioning the business to accelerate development across the Western U.S.,” Roland Spongberg, WKS Restaurant Group president and CEO, said in a statement.
The joint venture represents 15% of Krispy Kreme’s U.S. revenue, according to an earnings release.
In addition to Krispy Kreme shops, WKS operates Wendy’s, Denny’s and El Pollo Loco restaurants across 19 states, per the press release.
During 2025, about 75% of the doughnut chain’s systemwide sales were generated by company-owned locations, according to the earnings release. Through refranchising, it expects 50% of its sales to come from franchised locations by fiscal 2027.
Krispy Kreme is using refranchising transactions to help pay down debt and create more financial flexibility.. At the end of 2025, Krispy Kreme had over $938 million in net debt, an increase of about 7% compared to $875 million in net debt in 2024.
The WKS transaction includes $50 million in cash that will go toward debt repayments, and a note payable over time. In early March, the company also closed a transaction with Unison Capital, which paid $70 million to purchase Krispy Kreme’s Japan operations. That money will also go toward paying down debt. Last year, Krispy Kreme sold its remaining stake in Insomnia Cookies to reduce its debt.
