Years after exiting a number of locations in Canada, doughnut chain Krispy Kreme is looking to expand its current presence in the Canadian market with more cafes as well as theatre-style stores with drive-thrus.
Levi Hetrick, Chief Growth Officer & Operating Partner for Krispy Kreme Canada, said the brand currently has 13 locations across the country in BC, Ontario and Quebec – 12 of those are owned and operated by his group. A franchise based out of Seattle runs the brand location in BC.
“What we’re looking to do is build a factory, a theatre hub, location in Calgary much like we already have in Mississauga, in Scarborough, Ontario, in Greenfield Park, a suburb of Montreal and one in Quebec City and the deals we’ve recently completed and will open soon in Winnipeg and Edmonton,” said Hetrick.
“It’s about a 4,500-square-foot production facility that’s also a drive-thru with sit-down retail. We call it a theatre hub because you can see the doughnuts being made. So the way that Krispy Kreme works each of our drive-thru facilities it’s also a factory. That’s where all the doughnuts are made fresh every day and then they’re sold on site and then also delivered to a nearby could-be smaller cafe. We sell at Costco We produce for our fundraising program. We do a lot of e-commerce through different partners and are potentially talking about wholesale agreements with people like Walmart, Loblaws, etc. But those are not currently in place today.’
The Calgary store is looking at opening late 2024 or early 2025. Fairfield Commercial Real Estate Inc. is working with Krispy Kreme to assist with their expansion in the Calgary market.
“We’re trying to be a bit opportunistic with real estate. We’re not going to build many, many factories like this – theatre hubs and drive-thru theatre hubs – in Calgary so we want to find the best one or two spots in Calgary to build a facility,” said Hetrick.
He said a theatre hub will open later this year in Toronto and then Winnipeg will also likely open later this year. There’s a signed deal in Edmonton as well to open likely in Q3 of next year.
“What we’re looking to do is build sort of the same building in multiple locations,” explained Hetrick. “Sort of a prototype that we’ve designed for the Canadian market and find great real estate in high traffic areas in each of the major cities across Canada and expand our reach.”
He said about 20 theatre hubs in the future would cover Canada with an additional 40 or so smaller locations in the cafe format.
“Krispy Kreme never actually left Canada. It just drastically reduced operations. What you probably recall is that in the early 2000s it was quite a run-up not just in Canada but across the globe to open as many Krispy Kreme’s as possible,” said Hetfrick. “Mississauga was literally the first international Krispy Kreme for the brand and it is still open and one of the most successful shops on the planet today. It produces and sells more doughnuts than any other shop, basically in the world.
“Early 2000s they got up to about 17 locations across a bunch of cities in Canada but the business was losing money and for a variety of reasons . . . the corporate group decided to drastically reduce and eventually to close most of Canada.
“It was at that time that my now business partners took the brand private. It was corporate owned. They took it private in 2006/2007 and that went down from 17 locations down to three. From that time, they’ve slowly grown it up to 10 locations and in late 2021 they established a partnership with the corporate entity and it’s no longer a franchise. It’s a joint venture partnership with Krispy Kreme corporate back in the States and that’s when I joined because I was part of Krispy Kreme corporate at the time. The brand has been around and we still think it’s got tons of potential in Canada just because Canadian consumers are fans of Krispy Kreme. But to be honest our biggest issue is access. Also a lot of people don’t know that the brand is still here. We have an opportunity to re-establish the brand for a lot of people and grow.”