Matt's post about Krispy Kreme...
I love the doughnuts, but the store design, logo design, and brand positioning has always impressed me more.
...reminded me of something that has been bugging me.I grew up in the South, and there was a Krispy Kreme store on my way home from school. It had been there since, it seemed, about 1950. Everything the doughnuts were, this store looked - classic, quality, eternal. But until a few years ago, there weren't many KK stores around at all. Outside of Florida, I'd never even seen one.
The company has had great success expanding through franchises. But these are no mom-n-pop stores. In order to qualify, you need to be rich already.
We currently grant franchises on an area development basis. Specifically, our area developers are required to build multiple stores (10 or more) in a market. The minimum net worth requirement is $5 million or $750,000 per store to be developed which ever is greater. For instance, a 15-store market requires a minimum net worth of $11,250,000.
The net result is that new franchise owners have already become wealthy from owning other franchises, resulting in more and more and co-branding situations, like Taco Bell, KFC, and Pizza Hut under one roof. They're opening in corners of gas stations, convenience stores, and sandwich shops. Now, I understand that co-branding is the hottest thing in food franchising, but I think Krispy Kreme is making a huge mistake allowing franchisees to put its retail stores in tiny corners of gas stations. They totally lose that old-time feel that really gave Krispy Kreme its allure, and I think ultimately, dilute the value of the Krispy Kreme brand.
Posted by wasylik at December 5, 2001 09:33 PM | TrackBack