Krispy Kreme Hands New York Growth to a 12-Shop Franchisee

Thirty-three shops in five years, in one of the most expensive real estate markets in the country, and Krispy Kreme is not the one paying to build them.

The doughnut chain announced Oct. 13 a development agreement with Original Entrepreneurs LLC, a Jersey City franchisee that already runs 12 Krispy Kreme shops. The group opened its first Hot Light Theater shop in Jersey City in 2017, added Springfield, East Rutherford, Paramus and Lakewood, then crossed into New York. The new shops will go into New York City and the surrounding region, including Long Island and New Jersey.

“This development agreement reflects our focus on capital-light franchise growth and enables us to expand with an operator that has deep expertise building and operating Krispy Kreme shops in a competitive market,” CEO Josh Charlesworth said.

Capital-light is the whole plan right now. Krispy Kreme announced a turnaround in August 2025 built on refranchising, lower capital spending and less debt. Since then it has sold its Japan operations to Unison Capital for roughly $70 million in cash and cut its stake in the Western U.S. joint venture with WKS Restaurant Group to 20%, a deal worth about $90 million to the company, according to its first-quarter results.

The numbers have moved fast. Franchisees produced about 25% of systemwide sales in 2025 and 42% by the second quarter, Charlesworth told analysts in August, with a target of about 50% beginning next year. First-half capital spending fell 70%. Of the 59 shops opened through the second quarter, all but two were opened by franchisees, according to the company's second-quarter call.

One more number explains why New York matters. Charlesworth said U.S. production runs at about 25% utilization, which means there is plenty of room to supply more doors without building new capacity. A franchisee opening shops in a dense metro is one of the cheaper ways to fill it.

It is the mirror image of what several franchisors are doing elsewhere. The Joint and A Place At Home are buying territory and units back to get closer to unit economics. Krispy Kreme is going the other way because it needs cash and less debt more than it needs control. Both can be right. They are solving different problems.

The release did not give an opening schedule for the 33 shops or say how many will be full production shops versus smaller formats. Those details will decide how much of that idle capacity this deal actually soaks up.