Krispy Kreme Raises Outlook as Franchisees Drive Growth
Franchise operators in quick-service retail should note the chain's shift toward franchise-funded expansion and overseas development.
Updated on Nov. 5, 2026 in Retail
Live Poll
Do you plan to buy doughnuts or treats more often this year?
Krispy Kreme raised its full-year 2026 net revenue outlook to $1.35 billion to $1.40 billion after third-quarter results, and agreed to open 120 shops in Pakistan over five years. For operators, the update shows a franchise-led model gaining share of sales in the doughnut and quick-service segment.
Why it matters
The revised outlook reflects gains in overseas markets, internet orders and U.S. sales through its fresh delivery channel, after the company exited weaker delivery locations about a year earlier. Franchised locations now produce 42% of systemwide sales, up from 25% in fiscal 2025, as the company shifts costs and growth to franchisees.
Third-quarter net revenue fell 12.4% to $328.8 million, while systemwide sales rose 1.0% in constant currency to $490.2 million. The company brought 98 new shops online globally in the first nine months of 2026, and its net leverage ratio stood at 5.5x, down 1.2x from the end of fiscal 2025.
The players
Krispy Kreme
A doughnut chain that operates largely through franchising, with growth now driven by franchisees and overseas expansion.
The details
Krispy Kreme's franchisees run nearly all of the 98 new shops opened this year, so growth is financed largely off the company's balance sheet. The company has set a goal of reaching 50% franchised systemwide sales beginning in fiscal 2027, and it plans at least 100 new shops in 2026. Revised 2026 capital spending is forecast at $40 million to $45 million, while year-to-date free cash flow improved by $82 million to negative $10 million.
Timeline
2025: Systemwide sales totaled $1.96 billion for the year.
Roughly 12 months before the report: Krispy Kreme exited weaker fresh delivery spots.
First nine months of 2026: 98 new shops opened globally.
November 5, 2026: Third-quarter results were reported and the revenue outlook raised.
After the quarter ended: A development agreement for 120 Pakistan shops over five years was signed.
Market Landscape
Krispy Kreme's shift toward franchised sales, now at 42% of systemwide sales versus 25% in fiscal 2025, follows the company's exit from weaker fresh delivery locations roughly a year ago. The company's stated goal of 50% franchised sales from fiscal 2027 positions it as a franchise-led operator in the quick-service retail segment.
Operators in quick-service and franchise-based retail should watch how franchisee-funded growth changes competition for locations and supply. Businesses weighing franchise or delivery-channel decisions may want to review their own unit economics with a qualified accountant.
The takeaway
The company's growth is increasingly carried by franchisees, which means franchise-agreement terms and capital requirements matter as much as top-line sales. Operators should track whether the 50% franchised-sales goal and the 2026 capital spending range hold through fiscal 2027.
Further reading
For broader context on how franchise models are reshaping store networks, see Retail.
Live Poll
Do you plan to buy doughnuts or treats more often this year?
