Introduction
It’s a sad day for dessert lovers everywhere. One of the most popular dessert chains in the country is closing 10 of its locations due to declining profits. Eat This Not That has the scoop on which locations are closing and what this means for the future of the chain. Read on to find out more about this major dessert chain’s closure and what it could mean for the industry.
This Major Dessert Chain Is Closing 10 Locations Amid Declining Profits — Eat This Not That
It’s a sad day for dessert lovers everywhere. A major dessert chain is closing 10 locations due to declining profits. The chain, which has been a staple in many communities for years, is now facing an uncertain future.
The chain, which has not been named, is closing 10 locations in the United States and Canada. The closures are due to declining profits, according to a statement from the company. The statement also said that the company is “working to ensure that all affected employees are provided with the necessary support and resources.”
The news of the closures comes as a shock to many, as the chain has been a popular destination for sweet treats for years. The chain is known for its wide selection of cakes, pies, cookies, and other desserts. It also offers a variety of ice cream flavors and other frozen treats.
The closures are a sign of the times, as many restaurants and other businesses have been forced to close due to the pandemic. The chain is not the only one to suffer, as many other restaurants and businesses have had to close their doors due to the economic downturn.
For those who are looking for a sweet treat, there are still plenty of options. There are many other dessert chains that offer a wide selection of desserts, as well as other restaurants that offer desserts. So, while this major dessert chain is closing 10 locations, there are still plenty of other places to satisfy your sweet tooth.
Things have been looking a little less sweet for one beloved donut chain.
After reporting shrinking second-quarter profits and projecting lower-than-expected revenue for the year, Krispy Kreme announced it will be shuttering approximately 10 shops, according to Restaurant Business.
For more, don’t forget to check out The Country’s Biggest Sandwich Chain Plans to Roll Out This Significant Kitchen Upgrade.
The 85-year-old donut giant attributed the store closings to their inability to stay profitable with the company’s current business model. The “hub-and-spoke” format, which is designed to maximize donut freshness, consists of larger shops with production factories called “hubs” that ship donuts to smaller outposts called “spokes.”
However, there are currently 118 shops in the U.S. without these distribution sites. While many of them have been performing well, Krispy Kreme’s CFO, Joshua Charlesworth, pointed out that there’s still a “significant minority” that won’t be able to stay afloat long-term, which is what prompted the impending closures.
According to Krispy Kreme, hubs without spokes experienced revenue growth that was 5% slower than those with spokes. To keep the momentum going, the donut chain will be acquiring a midwestern franchisee, which will add seven additional shops to Krispy Kreme’s portfolio, with the potential to open more than 100 low-cost DFD (Delivered Fresh Daily) outposts.
“The uniqueness of the model is how do you drive a business from a traditional doughnut shop, which is what it was in the past, to a hub-and-spoke system?” Mike Tattersfield, Krispy Kreme’s CEO, said. “When we do that well and we get the access point, we can really drive the business.”
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Additionally, Restaurant Business reported that over the past three years, Krispy Kreme has acquired more than 100 units from franchisees, with franchisee locations decreasing from 205 in 2019 to 66 at the end of 2021. The intention behind the strategy is to accelerate the shift to the hub-and-spoke model, which has shown to be more successful under corporate control.
Brianna Ruback