Krispy Kreme has announced a franchise development agreement with Original Entrepreneurs LLC for 33 shops across the New York metropolitan area over the next five years. The October 13 announcement covers New York City, Long Island and New Jersey.
Krispy Kreme says its franchisee already operates 12 Krispy Kreme shops. It opened its first Hot Light Theater shop in Jersey City in 2017 and is headquartered there. The announcement identifies Karl Halligan and John Mondry as principals of Original Entrepreneurs. Krispy Kreme CEO Josh Charlesworth described the new agreement as part of the brand’s strategy to expand through franchisees while limiting company capital investment.
Who builds and runs the shops#
Krispy Kreme’s fiscal 2025 annual filing describes the division of responsibilities: franchisees provide the money to develop, operate and maintain their locations, and manage daily operations. The company says the model also draws on franchisees’ local market knowledge and operational involvement.
The franchisor earns revenue through several channels. It recognizes franchise fees over the agreement’s term, collects ongoing royalties based on franchisee sales, and sells doughnut mix and equipment to franchisees, according to the same filing. Development and initial franchise fees relate to openings; advertising fees are also tied to franchisee sales.
The physical investment varies by format. Hot Light Theater Shops make and sell doughnuts on site and serve as production hubs. Fresh Shops are smaller stores or kiosks without on-site production; they receive doughnuts from hubs. Factories also supply doughnuts to other locations without operating a public storefront. The filing puts average capital investment at $2 million to $5 million for a Hot Light Theater Shop and $100,000 to $1 million for a Fresh Shop.
Those ranges describe the company’s general formats. The New York announcement does not specify the planned mix.
New shops and new owners#
The New York agreement concerns future development. Krispy Kreme has also been transferring existing operations to franchise ownership: its August 6 results said it completed refranchising Japan and its western U.S. joint venture in March. Development adds planned locations; refranchising changes who owns existing operations.
Krispy Kreme reported that franchise-operated locations generated about 42% of systemwide sales as of August 6, versus about 25% for fiscal 2025. Its goal was about 50% beginning fiscal 2027.
Systemwide sales count company and franchisee product sales, excluding mix, equipment and royalties. Franchisees’ sales are excluded from corporate revenue.
Less company spending#
Corporate capital expenditure fell to $16.1 million in the 26 weeks ended June 28, 2026, from $54.1 million in the 26 weeks ended June 29, 2025, a 70.2% decline calculated from the quarterly filing’s cash-flow statement.
Dividing that spending by reported net revenue for the same 26 weeks, $698.0 million, gives a capital-spending ratio of 2.3%. These are company figures, separate from the money a franchisee invests in its shops.
The filing connects the capital strategy to greater use of existing assets and franchise development. It also says a portion of proceeds from the completed refranchising transactions helped repay long-term debt.
QSR Pro Staff
The QSR Pro editorial team covers the quick service restaurant industry with in-depth analysis, data-driven reporting, and operator-first perspective.
More from QSR
