How one rival donut franchise is cashing in on Krispy Kreme closures

Sydney based donut franchise Dreamy Donuts has moved to cash in on problems at rival Krispy Kreme Australia, offering to honour Krispy Kreme vouchers and courting the chain’s former staff for franchisee prospects.

Dreamy Donuts, which has 18 stores in Australia and two in New Zealand, announced late last week that it will honour Krispy Kreme vouchers until the end of November in what the company admits is a cheeky marketing campaign.

Natalie Brennan, brand manager for Dreamy Donuts and the national services and support manager for the chain’s owner Foodco Group, is upfront about the fact that Krispy Kreme’s collapse is helping her company, particularly because Krispy Kreme has shut its shopping-centre-based stores first, and Dreamy Donuts stores are concentrated in shopping complexes.

“Any donut or coffee that is not sold by Krispy Kreme, that is an opportunity for us. Their closures have predominately been in the shopping centres, so there is business to be picked up.”

Brennan says the company will continue to increase advertising while Krispy Kreme attempts a restructure, but says she will also be looking for ways to increase’s Dreamy Donut’s overall market presence.

She says she is keen to talk to sacked Krispy Kreme employees, particularly with an eye to spotting young managers who may be keen to become franchisees.

“We’ve got lots of site opportunities, but the problem is finding franchisees,” Brennan says.

But like many franchisors, helping potential franchisees access funds remains a big stumbling block.

“If we could get more young people, then the businesses would do better. People with the enthusiasm and the drive and the time to work on their businesses are great, but they often don’t have the money.”

The company has recently started to help arrange financing options to help existing franchisees buy additional stores, but Brennan says she is open to opening this up to prospective franchisees who are keen to get into the donut game.

“We are open to people to have got enthusiasm and drive coming to talk to us.”

FoodCo Group also owns the Muffin Break and Jamaica Blue brands, and has 350 franchisees around Australia.