Despite a positive outlook for the future, one of these sweet spots could be shuttering near you.
, and has already identified an additional 12 stores that will close in the near future.
"All of these shops are low revenue and have flat on negative EBITDA margins and most are hubs without spokes, which could not be converted to produce for DFD ," Josh Charlesworth, Krispy Kreme's global president, chief operating, and financial officer, said on the earnings call."We closed eight shops during the third quarter. We also identified a further 12 shops, which we will close in the coming months.
Krispy Kreme's current business model is all about the"hub-and-spoke" format. Intended to maximize donut freshness, the business model entails operating larger locations complete with donut production facilities called"hubs" that ship out donuts to smaller shops called"spokes." Most of the Krispy Kreme shops being closed are hubs that did not benefit from nearby spokes.
Still, Krispy Kreme is optimistic for the future, especially its new partnership with McDonald's."Obviously, this is a small test to partner with a global company. But we think this represents the type of opportunity that shows why we remain very confident in our long-term goal of achieving more than 50,000 points of access globally," Tattersfield added.
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