Just thinking about a warm, gooey, sugar-filled Krispy Kreme doughnut is enough to make you want to run out and buy one. In fact, it may be enough to make you want to buy the whole store. And for just a few hundred thousand dollars, you can.
Buying into a Krispy Kreme doughnut franchise can certainly be a lucrative way of life. After all, you could be making a near 80 percent gross profit margin. But, as the saying goes, you’ve got to spend money to make money. Here’s how much it really costs to open a Krispy Kreme shop.
Total Investment: $275,000 to $1.9 million
According to CNN Money, opening a Krispy Kreme can be a seriously expensive endeavor as it can cost upwards of $1.9 million in total to open. That, CNN noted, is much more expensive than other fast food chains like McDonald’s, which caps out at $750,000 for its most expensive franchise.
You need even more just to apply
Krispy Kreme has a rather rigorous application system, and that includes letting the organization check your bank statements. According to CNN, a would-be franchisee needs to have a net worth of at least $5 million to even apply, primarily to ensure he or she has the capital to see the store all the way through. Also, sorry first-timers, Krispy Kreme requires all applicants have "ownership and operating experience of multi-unit food service operations."
You’re on the hook for the restaurant’s furniture and equipment
Yes, that initial investment doesn’t come with furniture or doughnut-making equipment, meaning you’ll have to buy it all on your own, along with a few other items. But, according to Entrepreneur, the Krispy Kreme parent company does have internal financing options available for these needs.
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And you’ll need to keep paying Krispy Kreme… forever
As a franchisee, you’ll need to keep paying Krispy Kreme 4.5 percent of all profits in perpetuity, according to Entrepreneur. But, you get all the free doughnuts you want in return.
But, you could make a pretty penny in return
According to CNN, Krispy Kreme owners can rake in serious dough from their dough. Storeowners can average $60,000 to $70,000 a week, which comes out to about $3.4 million a year. One shop located outside of Denver brought in a cool $8 million in revenue in 2002 alone, far outpacing its initial investment. So, if you’ve got the money, the time, the drive, and the love of sweet breakfast treats, this may be a good investment ideal after all.