Donut Franchise UK - Franchising Opportunity

DOUGHNUT Franchise chain Krispy Kreme UK is set to be swallowed up by a Manchester based private equity outfit which plans a 5m nationwide rollout of the brand. LDC has been granted exclusivity in the race to acquire the company, which owns the UK and Ireland master franchise for the iconic American brand. A deal could be completed by the end of the month. Krispy Kreme UK DOUGHNUT Franchise chain Krispy Kreme UK is set to be swallowed up by a Manchester based private equity outfit which plans a 5m nationwide rollout of the brand. LDC has been granted exclusivity in the race to acquire the company, which owns the UK and Ireland master franchise for the iconic American brand. A deal could be completed by the end of the month. Krispy Kreme UK opened its first store at Harrods in 2003 and now has 28 branches, mainly in the Greater London area and only as far north as Birmingham. The group employs 550 staff. Sales have risen from 5.2m in 2004 to an expected 19m for the year to the end of January. Chief executive Don Henshall owns 10 per cent of the business, management has 2.5 per cent and the rest is held by Americans Dick Clark, Haven Burke and Ed Fishman. They are in their late 60s and early 70s and are looking to realise their investment in the business. Paul Johnson, of LDC, is understood to have flown to the US recently to discuss a deal with the trio. Mr Henshall said, We are concentrated around the M25 with branches in Milton Keynes, Oxford and Birmingham, and we are looking for a new partner to help us grow the business across the rest of the country. Over the next two to three years, we are looking at Manchester, Glasgow, Newcastle and Ireland. Krispy Kreme's model is to operate a main factory shop with a drive through facility, supplying other stores in town centres and at transport hubs such as railway stations and airports. The firm has planning permission for a factory shop near the Trafford Centre. It wants to open a coffee bar style branch in Manchester city centre and kiosks at Piccadilly Station and Manchester Airport. Mr Henshall said he envisages up to five sites in Greater Manchester, employing around 100 people. Krispy Kremes factory shops operate around the clock, making 15 varieties of doughnuts for customers who call in as well as for delivering to other branches nearby. Most customers buy up to a dozen doughnuts at a time to share with colleagues, relatives or friends.