Krispy Kreme steps up global expansion as turnaround takes hold

Krispy Kreme is accelerating its global growth strategy, with nearly 100 international shop openings so far this year, multiple new franchise development agreements and significant opportunities to expand its U.S. footprint through retail partnerships. The expansion is part of a broader turnaround strategy focused on shifting toward a more capital-light business model, strengthening franchisee economics and driving sustainable, profitable growth, according to the company's Q3 earnings call.

CEO Joshua Charlesworth said the company continues to see strong interest from franchise partners around the world, with 98 new international shop openings year to date, nearly all of which are franchised. India, South Korea and the Middle East led the openings, while the company also reported continued momentum in Brazil, Spain and recently refranchised Japan.

Krispy Kreme announced its fourth new international franchise agreement of the year, partnering with Gray Mackenzie Restaurants to bring 120 shops to Pakistan over the next five years. The agreement follows previously announced development deals in Estonia, Mauritius and the Netherlands, further extending the doughnut chain's international reach.

The company also is pursuing substantial growth opportunities in the U.S. Through an agreement with an existing franchisee, Krispy Kreme plans to add 33 shops across the New York City metropolitan area over the next five years.

Charlesworth described the deal as an opportunity to bring the brand to more consumers in one of the country's largest markets through a capital-light franchise model.

"We are pleased to work to bring our doughnuts to more places and make it convenient for people to access them," Charlesworth said during the call, adding Krispy Kreme already works with more than 20 franchisees across the U.S. WKS Restaurant Group, its largest U.S. franchisee, also is looking to expand in the West.

Franchisees currently generate approximately 42% of Krispy Kreme's systemwide sales, and the company expects that share to reach 50% by fiscal 2027.

Beyond traditional shops, the company is expanding its fresh delivery network through partnerships with grocery, mass merchandise, club and convenience retailers. The network now includes approximately 7,700 U.S. locations, including franchise-operated doors, after adding 715 net new locations year over year. The additions follow a strategic reset in which Krispy Kreme exited approximately 1,500 underperforming fresh delivery doors last year.

Publix has been a key contributor to recent growth, while Walmart and Target represent considerable runway. Krispy Kreme currently operates in fewer than half of each retailer's stores.

"We still see plenty of opportunity," Charlesworth said of the big-box channel, adding that the company looks forward to continuing to expand distribution with both retailers.

The expansion strategy is beginning to show results in the company's financial performance. Krispy Kreme reported third-quarter net revenue of $328.8 million, down 12.4% year over year, primarily reflecting the refranchising of its Western U.S. and Japan businesses.

Global systemwide sales increased 1% on a constant-currency basis to $490.2 million. U.S. organic revenue grew 0.9%, supported by fresh delivery and digital channels, while market development organic revenue increased 14%, reflecting higher royalty revenues from the United States, Middle East, Japan and Brazil.

Krispy Kreme also reported progress in reducing its capital requirements. Capital expenditures totaled $28.6 million year to date, down 65% from the same period in 2025, while free cash flow improved by $82 million year over year during the first three quarters.

The company raised its fiscal 2026 revenue guidance to a range of $1.35 billion to $1.4 billion, up from its previous range of $1.25 billion to $1.35 billion, while maintaining its adjusted EBITDA outlook of $140 million to $150 million.

"Our results continue to demonstrate the success of the actions we are taking to drive sustainable growth and improve profitability," Charlesworth said in the call.