North Carolina-based Krispy Kreme Doughnuts announced today [Thursday] the acquisition of the Akron and Cleveland, Ohio markets.
The company has agreed to purchase the rights to these markets, as well as the associated assets, from an associate franchisee who currently owns each of these markets. A purchase price was not disclosed but Krispy Kreme did indicate it expects the acquisition to be modestly accretive to earnings in fiscal year 2003 which begins this year on 4 February.
Scott Livengood, the company’s Chairman, CEO and President, commented: “We believe that Krispy Kreme’s unit economics are among the best in the industry.
“For this reason, we will continue to pursue the acquisition of additional franchise markets when our franchisees indicate a desire to sell their markets. The acquisition of the Akron and Cleveland, Ohio markets is the fourth in a series of franchise repurchases that have included the Savannah, Georgia, Charleston, South Carolina and Baltimore, Maryland markets.
“We intend to retain all or a significant interest in Akron and Cleveland. With only four stores in these two major markets, we believe there is exceptional growth opportunity for our brand in terms of both additional retail stores and greater penetration in off-premises wholesale channels.”
Krispy Kreme currently operates 218 stores in 33 states and Canada.