Krispy Kreme has 89 locations and 300 points of access in Japan. | Photo: Shutterstock.
Krispy Kreme on Friday said that it has agreed to sell its operations in Japan to Unison Capital for $65 million in cash.
The Charlotte-based doughnut chain said that funds from the sale will be used to pay down debt, following fees and expenses. The deal is expected to close in the first quarter of next year.
More importantly, it’s the first international refranchising agreement since Krispy Kreme announced a turnaround plan in August that features fewer company locations and more franchisee-run units.
The more “asset-light” strategy is designed to ease the company’s financial burden. Krispy Kreme operates a hub-and-spoke model that uses larger doughnut shops like small doughnut-making factories and delivers them daily to retailers.
But the investment required to fund the logistics of the operation weighed on profitability and poor sales at some of the locations where it sold doughnuts—notably McDonald’s—led to a shift in thinking earlier this year. As part of the turnaround plan, Krispy Kreme said it would sell off some company units.
The doughnut chain has been in Japan for 20 years and has 89 locations there and 300 points of access in Tokyo, Osaka and other major cities.
It will now be owned by Unison, which specializes in consumer, healthcare and business-to-business services. It has raised about $5 billion in assets across six funds in Japan and three in Korea. It has invested in a bubble tea, noodle and sushi chains along with a wine retailer.
Josh Charlesworth, CEO of Krispy Kreme, in a statement called Unison “a proven, skilled operator with deep expertise in the retail beverage and restaurant sectors” and an “ideal, long-term partner to operate and grow Krispy Kreme in Japan.”
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