Krispy Kreme, Inc. (DNUT) Business

Item 1. Business

The Joy of Krispy Kreme

Krispy Kreme, Inc. (“KKI” and, together with its subsidiaries, the “Company” or “Krispy Kreme”) is one of the most beloved and well-known sweet treat brands in the world. Over its nearly 89-year history, Krispy Kreme has developed a broad consumer base globally and currently operates in 42 countries through its unique network of shops (“Doughnut Shops”), partnerships with leading retailers, and growing digital business. The Company’s purpose is to touch and enhance lives through the joy that is Krispy Kreme.

Our Business Model

We are an omni-channel business that focuses on fresh, high-quality doughnuts with 15,194 points of access globally as of the end of fiscal 2025. We refer to the points of access where consumers can purchase our doughnuts as our “Global Points of Access” or “Points of Access” when referring to points of access in a particular region or segment. We sell doughnuts to consumers through three main channels: (1) Hot Light Theater Shops and Fresh Shops, (2) fresh delivery, and (3) digital. These channels are supported by a capital-efficient Hub and Spoke model, which leverages production capabilities of our “Hubs” to deliver fresh doughnuts to our “Spokes.”

The primary components of our Hub and Spoke model are as follows:

•Doughnut Factories: Non-consumer facing production Hubs, which provide fresh doughnuts to our Spoke locations in certain countries or regions.

•Hot Light Theater Shops: Consumer-facing Hubs where fresh doughnuts are made and sold on premise, providing a unique and differentiated consumer experiences while serving as local production Hubs for our network. The average capital investment for a Hot Light Theater Shop is $2 million to $5 million.

•Fresh Shops: Smaller Doughnut Shops and kiosks, without manufacturing capabilities, selling fresh doughnuts delivered from Hub locations. The average capital investment for a Fresh Shop is $0.1 million to $1 million.

•Fresh Delivery: Fresh doughnuts delivered from local Hub locations to grocery stores, club wholesalers, convenience stores, quick service or fast casual restaurants (“QSR”), and drug stores that sell our doughnuts displayed in Krispy Kreme branded cabinets and merchandising units. Formerly referred to as our delivered fresh daily or “DFD” channel, we have simplified the language to reflect that we vary delivery frequency schedules for certain locations. The average capital investment for a fresh delivery door is $2,000 to $6,000.

•Digital: Fresh doughnuts for pickup or delivery, ordered through our branded digital platforms or through third-party digital channels, including delivery apps and our customers’ digital platforms.

In the U.S., our sales are derived from Points of Access that are primarily operated by the Company. Internationally, our sales are derived from Points of Access that are operated by both the Company and franchise partners.

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Digital is our fastest-growing channel in the U.S. and represents a significant opportunity to capitalize on the multi-year acceleration in third-party channel growth. As a dynamic and rapidly evolving part of our omni-channel strategy, we are focused on meeting consumers where they are, streamlining the ordering journey to reduce friction, improving conversion rates, and enhancing the overall guest experience. We continue to expand our digital capabilities through new third-party platform integrations, increased third-party advertising, and strategic partnerships to further scale and strengthen the channel.

The Ingredients of Our Success

Rooted in our purpose to touch and enhance lives through the joy that is Krispy Kreme, we believe the following competitive differentiators position us to generate significant growth.

High-Quality, Hand-Crafted, Proprietary Doughnuts

Our iconic Original Glazed doughnut is recognized for its fresh, hot-off-the-line, melt-in-your-mouth experience, and is complemented by a wide variety of hand-crafted and decorated doughnuts. Our high-quality doughnuts are made from our own proprietary formulations and using our proprietary doughnut-making equipment. We utilize strict quality standards and uniform production systems to foster consistent and high-quality consumer interactions, no matter where in the world the consumer experiences it. Our doughnuts are most often purchased for sharing, bringing joy to everyday moments and special occasions.

Beloved Global Brand with Ubiquitous Appeal

We believe that our brand love and ubiquitous appeal differentiate us from the competition. Our iconic, globally recognized brand has a rich history that is epitomized by our fresh Original Glazed doughnut. We believe we are one of the most loved sweet treat retailers in the U.S. and many markets around the world, with a loyal and emotionally connected consumer base.

We continuously seek to understand what consumers are celebrating or experiencing in their lives and actively engage our followers to activate this emotional connection through memorable, sharable moments that we believe further fuel our brand love.

Shareable Experiences

Our sweet treat assortment begins with our iconic Original Glazed doughnut inspired by our founder’s classic yeast-based recipe that serves as the foundation of our offerings. In addition, we maintain a core doughnut menu, which we relaunched in 2025 to feature trending flavors, fan favorites requested on social media, and popular doughnuts that were offered previously only for a limited time. We also offer a rotating seasonal menu, limited time offerings (“LTOs” or “specialty doughnuts”) such as our flavored glazes, smaller portion options such as our “doughnut dots” and “minis,” which lend themselves well to gifting and sharing occasions such as birthdays and school activities, and seasonal activations to generate buzz for our brand and engage consumers.

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A taste of our offerings includes:

Our seasonal activations create unique assortments centered on holidays and events, with Valentine’s Day, St. Patrick’s Day, Easter, the Fourth of July, Halloween, and Christmas all examples of holidays for which we routinely innovate. We also aim to maintain brand relevance by creating product experiences that are culturally relevant and tied to buzzworthy events.

The success of specialty products, including minis, LTOs and seasonal activations, affirms our belief that our innovations create additional opportunities for consumers to engage with our brand and lead to increased purchase frequencies, a key benefit given that U.S. consumers visit fewer than three times per year on average. We believe these offerings also grow brand love while encouraging gifting and sharing.

Omni-Channel Model to Expand Our Reach

We believe our omni-channel model, enabled by our Hub and Spoke approach, allows us to maximize our market opportunity and deliver consistent high-quality doughnuts across the globe. Our goal is to make our freshly made doughnuts available to consumers as conveniently and efficiently as possible. The production capacity of our Hubs allows us to reach more consumers wherever they may be—whether in-shop, in a grocery or convenience store, on their commute home, or at their own doorstep via home delivery. We use this tailored approach to reach consumers across a variety of distinct formats to support growth in highly attractive and diverse markets. Our approach focuses on maintaining brand integrity and scarcity value while capitalizing on significant untapped consumer demand.

The Hub and Spoke approach is applied globally and is currently most developed in certain of our international Company-owned markets. With lessons learned in those international markets, we are further developing the Hub and Spoke approach in the U.S., with a focus on expansion in key, population-dense U.S. markets where we have a limited or no presence despite our high brand awareness.

We believe we have a significant opportunity to increase our presence in certain of our existing international markets where we have a less developed Hub and Spoke model, providing opportunity to grow within markets in which we are already present. We also view Hub and Spoke expansion to other international markets where we do not currently have a presence as a growth driver for the future.

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Franchise Development

The Company operates a global network of locations through a combination of Company-owned/operated and franchise-owned/operated shops and is planning to expand the franchising model globally going forward. The Company intends to refranchise certain international Company-owned markets and the Company’s joint venture in the western U.S. An expanded franchised business model will enable the Company to grow its brand presence while leveraging the capital, local market knowledge, and operational involvement of franchisees. This expansion will allow Krispy Kreme to operate a more capital-light model where franchisees provide the capital investment required to develop, operate, and maintain their locations and are responsible for the day-to-day operation of their businesses. We expect continued franchise development to result in a decrease in revenue from product sales and an increase in revenue generated from franchisees, primarily through a mix of: (i) fees, recognized over the term of the franchise agreement, (ii) ongoing royalty fees, calculated as a percentage of franchisee sales, and (iii) sales of product mix and equipment to franchisees.

For fiscal 2025, approximately 75% of the Company’s systemwide sales came from Company-operated locations. Through refranchising efforts, Krispy Kreme expects nearly 50% of systemwide sales to be generated by franchisees beginning fiscal 2027.

Our Segments

We conduct our business through the following three reported segments:

•U.S.: Includes all Company-owned operations in the U.S., and Insomnia Cookies Bakeries globally through the date of deconsolidation. Refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements included in Item 8 of Part II of this Annual Report (the “audited Consolidated Financial Statements”) for more information;

•International: Includes all Company-owned operations in the U.K., Ireland, Australia, New Zealand, Mexico, and Canada, as well as Japan for all periods covered by this Annual Report; and

•Market Development: Includes franchise operations across the globe.

Unallocated corporate costs are excluded from the Company’s measurement of segment performance. These costs include general corporate expenses.

The following table presents our Global Points of Access as of December 28, 2025:

We generate revenue from product sales through (1) the sale of doughnuts and complementary products to in-shop, digital, and fresh delivery customers and (2) the sale of doughnut mix, other ingredients and supplies, and doughnut-making equipment to franchisees. In addition, we generate revenue from our franchisees through development and initial franchise fees relating to new shop openings, ongoing royalties charged to franchisees based on their sales, and advertising fees based on their sales.

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Total fiscal 2025 revenue of $1,522.6 million consists of the following revenue by reporting segment:

The U.S. segment’s fiscal 2025 revenue of $913.1 million consists of:

The International segment’s fiscal 2025 revenue of $535.1 million consists of:

The Market Development segment’s fiscal 2025 revenue of $74.5 million consists of:

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Our Growth Strategy

Krispy Kreme is a growth company, anchored by our globally recognized brand and strong consumer demand for our iconic fresh doughnuts. In 2025, we implemented a turnaround plan to de-leverage the balance sheet and deliver sustainable, profitable growth focused on our two biggest opportunities, profitable U.S. expansion and our capital-light international franchise model. We expect to open in at least three new countries every year and at least 100 new shops globally in fiscal 2026.

Our turnaround plan focuses on the following four components:

1.Refranchising

2.Driving Return on Invested Capital

3.Expanding Margins

4.Driving Sustainable, Profitable Growth

Refranchising

We expect refranchising to enable us to more profitably drive systemwide sales growth and accelerate unit development through our capital-light franchise model. As we work to refranchise certain international markets, we are prioritizing the right partners to maximize value and position the Company for long-term growth while improving financial flexibility by paying down debt.

Driving Return on Invested Capital

To drive return on invested capital, we are reducing capital intensity by improving utilization of current assets and focusing on franchise development to support growth. We are utilizing existing Hubs to support additional fresh delivery doors, which increases not only total Sales per Hub, but also profitability and capital efficiency because the production Hubs have largely fixed costs including rent, utilities, and labor.

We are also making selective, capital-light investments in geographies which currently have limited access to our products or where we have insufficient production to meet demand. This includes opening in new international franchise markets and pursuing opportunities to refranchise certain international Company-owned markets and to restructure our consolidated subsidiary in the western U.S., W.K.S. Krispy Kreme, LLC.

Our international pipeline remains a key driver of capital-light expansion with future growth expected to come not just from new shop openings with franchisees but also through fresh delivery door expansion in grocery, convenience, club wholesalers and QSR.

Expanding Margins

We seek to expand margins by simplifying the business and strengthening operations in the U.S. to reduce costs while prioritizing product freshness and quality. Our Hub and Spoke model enables an integrated approach to operations, which is designed to bring efficiencies in production, distribution, and supervisory management.

We seek to make doughnuts more efficiently by optimizing production, streamlining Hub activities to leverage capacity, and improving labor productivity including through improved labor management systems and processes in our shops. We also seek to deliver doughnuts more efficiently by improving route management, optimizing production and delivery schedules to support cost-effective expansion, and through the use of third-party logistics (“3PL”) carriers. We are improving our demand planning through a system that is intended to enhance service and to deliver both waste and labor efficiencies across all our channels. We vary delivery frequency schedules for certain locations in partnership with our customers to continuously optimize our fresh delivery network. Through these efforts, we expect to drive efficiency and support expansion while maintaining our commitment to quality.

Driving Sustainable, Profitable Growth

To drive sustainable, profitable growth in the U.S., we are focused on growing our fresh delivery business with new and existing strategic customers with high-volume and high-margin doors, seeking to have the right product variety, in the right amount, in the right place, and at the right time.

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Our marketing strategy is focused on driving everyday sales through our refreshed core menu, creating excitement with buzzworthy limited time offers, and accelerating growth in digital. We also continue to emphasize the Original Glazed doughnut—our most iconic, most affordable and most profitable product, while leveraging digital channels to engage consumers and further amplify sales.

Marketing and Innovation

Our marketing strategy is as distinctive and innovative as our brand. We engage in cultural moments that resonate with our consumers, introduce new product experiences aligned with seasonal trends and evolving societal interests, and foster meaningful connections through simple, frequent, brand-led offerings that inspire sharing.

The tactics which support this strategy are also distinct. In the U.S., Krispy Kreme’s paid media strategy is 100% digital with a heavy focus on social media where our passionate consumer base engages and shares our marketing programs far and wide through their own networks. Earned media is also an important part of our media mix. We create promotions and products that attract media outlets to our brand. Through the widespread dissemination of our programs through pop culture, entertainment, and news outlets, we seek to achieve disproportionately large attention relative to our spend.

We believe our marketing strategy, supported with non-traditional media tactics, has proven to be an effective combination that simultaneously drives sales while growing brand love. By drawing inspiration from important societal events, we create a unique way for our consumers to celebrate and engage. Our ability to create this connection between our consumers and our brand is what has helped make the Krispy Kreme brand iconic, and helps to solidify our position in popular culture.

Our doughnuts are made from our proprietary doughnut mix and glaze flavorings using our unique process and proprietary doughnut-making equipment. To uphold our high-quality, consistent product experience, we maintain high standards for raw materials and periodically refine our formulation to deliver consistent quality in every batch. In addition, we supplement our core product offerings with innovative specialty doughnuts and seasonal activations that are anticipated by consumers and the media alike and generate significant social sharing amongst our fans and media coverage. The impact of limited time seasonal offerings goes beyond the sales of the innovations themselves; they drive traffic and create additional sales of our core product offering.

Krispy Kreme has a brand presence across both emerging and well-established social media platforms, including Facebook, Instagram, X, YouTube, and TikTok. These channels enable us to engage with our consumers on a personal level, while spreading the global brand of Krispy Kreme, including communicating promotional activity, featured products, new shop openings, and highlighting core equities of the brand. Social media allows precise geo-targeting around our shops and effective targeting of consumers likely to be interested in our messages.

Research and Development

New product innovation is important to the success of our business. We believe that the development of new Krispy Kreme doughnuts, beverages, and other products attracts new consumers to our brand, increases shop sales, and allows our shops to strengthen daypart offerings. One of our properties in Winston-Salem includes research and development facilities including test kitchens and doughnut producing equipment used in developing new products and processes.

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Team Members and Human Capital Resources

Investing in, developing, and maintaining human capital is critical to our success. Globally, Krispy Kreme employs approximately 17,000 Krispy Kremers as of December 28, 2025. We are not a party to any collective bargaining agreement in the U.S. and most of our equity markets, although we have experienced occasional unionization initiatives.

We depend on our Krispy Kremers to provide great customer service, to make our products in adherence to our high-quality standards and to maintain the consistency of our operations. While we continue to operate in a competitive market for talent, we believe that our culture, policies, and people and culture programs contribute to our strong relationship with our Krispy Kremers, which we feel is instrumental to our business model. Our approach to people and culture is organized under four key pillars: Connection and Engagement; Performance, Capability, and Talent; Growth and Development; and Kudos and Recognition. We are building programs under each of these key areas to support our goal to attract and retain top talent. Underpinning these programs is our culture, which is best captured by our Leadership Mix. The Leadership Mix is the set of behaviors that guide the Company’s expectations for how our Krispy Kremers should show up for the business and each other every day and consisted of the following in 2025:

The Leadership Mix is designed to empower our Krispy Kremers to do the right thing for our consumers, their fellow Krispy Kremers, and for the business. We pride ourselves on being an entrepreneurial and innovative team that is not afraid to take smart risks in support of our business goals. Consistent with our Leadership Mix, we seek to attract a diverse team of Krispy Kremers from a wide range of backgrounds. The success of our business is fundamentally connected to the well-being of our Krispy Kremers. Accordingly, we are committed to their health, safety, and wellness.

Our Total Rewards platform provides Krispy Kremers and their families with access to a variety of pay, health, and wellness programs that we believe are competitive, innovative, flexible, and convenient. Our total package of pay and benefits is designed to support the physical, mental, and financial health of our people and includes medical, dental, vision, employee assistance program, life insurance, and retirement benefits as well as disability benefits and assistance with major life activities, such as educational reimbursement and adoption. Many of these benefits are available to our part-time Krispy Kremers; we believe that offering select benefits to our part-time Krispy Kremers offers us a competitive advantage in recruiting and retaining talent. We also maintain certain employee equity ownership plans, including for our shop general managers, to align Krispy Kremers’ incentives with the Company’s long-term strategic goals.

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Responsibility

We are committed to touching and enhancing lives through the joy that is Krispy Kreme and our ambition is to Be Sweet in All That We Do, which represents our Responsibility platform. With this platform, we focus on our greatest opportunities for positive social and environmental impact with our people, our communities, and our planet. To outline our journey, progress, and future ambitions, we periodically issue Be Sweet Responsibility reports or fact sheet updates. These materials are available on our website at krispykreme.com/responsibility-report. The contents of these materials are not incorporated by reference into this Annual Report or in any other report or document KKI files with or furnishes to the SEC.

Supply Chain

Sourcing and Supplies

We are committed to sourcing the best ingredients available for our products. The principal ingredients to manufacture our products include flour, shortening, and sugar which are used to formulate our proprietary doughnut mix and concentrate at our Winston-Salem, North Carolina manufacturing facility. We procure the raw materials for these products from different vendors. Although most raw materials we require are typically readily available from multiple vendors, we currently have approximately 20 main vendors.

We manufacture the doughnut mix used to make our doughnuts at our manufacturing facility in Winston-Salem and a third-party facility in Pico Rivera, California, domestically, and at several locations internationally. In support of international markets, we produce a concentrate exclusively at our Winston-Salem facility for shipping efficiency. The concentrate is mixed with commodity ingredients in local markets to yield a finished doughnut mix.

At an additional facility in Winston-Salem, we manufacture our proprietary doughnut-making equipment for shipment to new shops and Doughnut Factories around the world. We manufacture a range of doughnut-making lines, with different capacities to support the needs of different shop types.

We provide other ingredients, packaging and supplies, principally to Company-owned and domestic franchise shops. Our Krispy Kreme shop-level replenishments generally occur on a weekly basis, working with one national distribution partner. In addition, we work with a regional distribution partner to serve the New York City market.

In the U.S., we maintain seven Doughnut Factories, of which one is operated by a franchisee. The Doughnut Factories are located in Indianapolis, Indiana; Monroe, Ohio; New York, New York; Elk Grove, Illinois; Concord, North Carolina; Fort Lauderdale, Florida, and Las Vegas, Nevada. Internationally, we operate 39 Doughnut Factories, of which 25 are operated by franchisees. Each Doughnut Factory supports multiple business channels for Krispy Kreme. Our Doughnut Factories, along with Hot Light Theater Shops, manufacture fresh doughnuts daily, powering the Hub and Spoke model by producing product for Spoke locations such as Fresh Shops and Carts and Food Trucks. In addition, local Doughnut Factories and Hot Light Theater Shops produce finished doughnuts for fresh delivery to local and regional fresh delivery doors. We operate delivery routes out of each Doughnut Factory and certain Hot Light Theater Shops to deliver doughnuts that are made fresh locally and maintain our highest standards of quality and brand experience.

Quality Control

We operate an integrated supply chain to help maintain the consistency and quality of products. Our business model is centered on ensuring consistent quality of our products. In addition to the doughnut mixes and mix concentrate that we manufacture, we have an agreement with an independent food company to manufacture certain doughnut mixes using concentrate for domestic regions outside the southeastern U.S. and to provide backup mix production capability in the event of a business disruption at our manufacturing facility. In-process quality checks are performed throughout the production process, including ingredients, moisture percentage, fat percentage, sieve size, and metal checks. We provide specific instructions to franchise partners for storing and cooking our products. All products are transported and stored at ambient temperature.

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Competition

We compete in the fragmented indulgence industry. Our domestic and international competitors include a wide range of retailers of doughnuts and other sweet treats, coffee shops, and other café and bakery concepts. We compete with snacks sold through convenience stores, supermarkets, restaurants, digital, and retail stores. The number, size and strength of competitors vary by region and by category. We also compete against retailers who sell sweet treats such as cookies, cupcakes, and ice cream. We compete on elements such as food quality, freshness, convenience, accessibility, customer service, price, and value. We view our brand engagement, overall consumer experience and the uniqueness of our doughnuts, including the Original Glazed doughnut, as important factors that distinguish our brand from competitors, both in the doughnut and broader indulgence categories.

Intellectual Property

Our Doughnut Shops are operated under the Krispy Kreme® trademark, and we use many federally and internationally registered trademarks and service marks, including Original Glazed®, Hot Krispy Kreme Original Glazed Now®, and the logos associated with these marks. We have registered various trademarks in over 65 other countries, and we generally license the use of these trademarks to our franchisees for the operation of their Doughnut Shops. We have also licensed our marks for other consumer goods. In addition, we maintain certain proprietary formulas that we have established as trade secrets. We believe that our trademarks, service marks, and trade secrets have significant value and are important to our brand. To better protect our brand, we have registered and maintain numerous Internet domain names.

Government Regulation

As a company with global operations, we are subject to the laws and regulations of the U.S. and the foreign jurisdictions in which we operate as well as the rules, reporting obligations and interpretations of all such requirements and obligations by various governing bodies, which may differ among jurisdictions. Changes to such laws, regulations, rules, reporting obligations and related compliance obligations could result in significant costs and adversely impact our capital expenditures, results of operations, and competitive position. We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures, results of operations or competitive position as compared to prior periods.

Seasonality

Our sales peak at various times throughout the year due to certain promotional events and holiday celebrations. Additionally, our hot beverage sales generally increase during the fall and winter months while our iced beverage sales generally increase during the spring and summer months. Quarterly results also may be affected by the timing of the opening of new shops, closing of existing shops, or completion of strategic transactions such as refranchising transactions. For these reasons, results for any fiscal quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Available Information

This Annual Report, and all other reports and amendments thereto that KKI files with or furnishes to the SEC, are publicly available free of charge on the Investor Relations section of our website at investors.krispykreme.com or at sec.gov as soon as reasonably practicable after these materials are filed with or furnished to the SEC. We also use our website as a tool to disclose important information about the Company and comply with our disclosure obligations under Regulation Fair Disclosure. Our corporate governance principles, code of conduct, Board committee charters, and certain other corporate governance policies are also posted on the Investor Relations section of our website. The information on our website (or any webpages referenced in this Annual Report) is not part of this or any other report KKI files with, or furnishes to, the SEC.