Krispy Kreme looks to Michigan
per cent interest in the Michigan market.
Krispy Kreme Doughnuts has announced its intention to acquire a 73 per cent interest in the Michigan market. The current operating partner in Dough-Re-Mi, the Michigan franchise entity, will retain a 27 per cent interest in this market.
The company and its franchisee in the Michigan market are in the final stages of negotiating a definitive $18.6 million purchase agreement for Krispy Kreme to acquire some of the existing Michigan stores and the rights to continue development of this market with additional factory stores, doughnut and coffee shops and satellite units, along with further expansion of off-premises sales.
There are presently seven stores in the Michigan market, consisting of four in the Detroit area and one each in Grand Rapids, Flint and Lansing. Krispy Kreme will acquire five of those stores, with two stores in the Detroit area being closed by the franchisee in the market prior to the consummation of the acquisition.
After assuming control of the operations in the Michigan market, Krispy Kreme intends to rebuild two stores in nearby locations to replace the closed stores.
"The success of previous market repurchases has validated our acquisition strategy," said Krispy Kreme chairman Scott Livengood. "We will continue to acquire or expand our interest in markets where such an acquisition is mutually advantageous for Krispy Kreme, our franchisees and our customers. We believe there is tremendous opportunity for growth in Michigan, both in retail and off-premises channels."
Founded in 1937 in North Carolina, Krispy Kreme is a leading branded speciality retailer of doughnuts. Krispy Kreme currently operates more than 310 stores in 41 US states, Canada and Australia. More than 2.7 billion doughnuts are produced each year.
