Krispy Kreme signs deal to enter India
May 15, 2012 (Menafn - Winston-Salem Journal - McClatchy-Tribune Information Services via COMTEX) --Krispy Kreme Doughnuts Inc. is expanding the international reach of its hot glazed doughnuts to India, the world's second most populous country at 1.2 billion.
The company said Monday it had signed its first franchise deal in India. Bedrock Food Co. Pvt. Ltd. plans to open 35 shops over five years in northern India, including the cities of Delhi, Jaipur and Lucknow.
Jeff Welsh, president of Krispy Kreme's international division, said Bedrock's management team's "strong industry experience and knowledge of the Indian consumer are great assets" for the company's entrance into India.
Bedrock also holds the development rights for Subway in parts of north, west and south India and operates about 185 Subway restaurants.
"Krispy Kreme is extremely popular in Asia and we expect Krispy Kreme to be well-received in India," said Purwa Sinha, managing director of Bedrock.
"Our experience with the Indian consumer shows they are very fond of sweets and believe in the concept of sharing. Coffee and doughnuts as a category has huge potential in India and we expect the market to grow quickly over the next few years."
The franchise agreement with Bedrock marks the 21st overseas jurisdiction in which Krispy Kreme sells its products.
The strategy could be pivotal because the jobs of its 3,900 employees, including 408 in Winston-Salem and an additional 102 elsewhere in the Triad, are riding on Krispy Kreme's ability to make its doughnuts a regular choice rather than an occasional treat in international markets.
"India is a huge, promising market," said Michael Lord, an associate professor of strategy and entrepreneurship at Wake Forest University.
"It's also a difficult market to get just right. India has so many diverse tastes and can be a very complicated place to do business."
That said, having a franchisee with a successful Subway presence in India should help Krispy Kreme sales there, Lord said. "This should help make the expansion go more smoothly, despite all the complications of doing business there."
Krispy Kreme announced in April plans to enter Russia with 40 shops in five years.
In the past 10 months, Krispy Kreme has announced major expansions for the United Kingdom (35 planned new shops for a total of 80), Japan (73 planned new shops for a total of 94) and Mexico (58 planned new shops for a total of 128).
Although international franchise sales represented 6 percent of Krispy Kreme's revenue in its fourth quarter of 2012, which ended Jan. 29, global expansion is a big part of its growth strategy.
In February 2011, Krispy Kreme said its goal was having close to 1,000 international shops by 2016.
The company ended fiscal 2012 with 602 franchise stores and 92 company stores, with international representing 460 franchise stores. It plans to add 75 international franchise stores during fiscal 2013.
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