Acquisitions and Divestitures

3 Months Ended

Mar. 29, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Divestitures

2026 Acquisitions and Divestitures

W.K.S. Krispy Kreme and Awesome Doughnut

On March 23, 2026 (the “Effective Date”), Krispy Kreme, Inc., through its wholly owned subsidiaries, Awesome Doughnut, LLC (“Awesome Doughnut”) and Krispy Kreme Doughnut Corporation (“KKDC”), completed transactions with its joint venture partner, WKS Restaurant Group (“WKS”), as a result of which: (i) WKS’s indirect ownership stake in the Company’s Western U.S. joint venture, W.K.S. Krispy Kreme, increased from 45% to 80%; and (ii) KKDC’s ownership stake in W.K.S. Krispy Kreme decreased from 55% to 20% (the “WKS Refranchising”). The WKS Refranchising included the following principal components:

•Awesome Doughnut entered into an Asset Purchase Agreement (the “APA”) with W.K.S. KK HoldCo, Inc., an affiliate of WKS (“WKS Holdco”), pursuant to which WKS Holdco acquired, as of the Effective Date, substantially all of the franchise rights, operating assets, equipment, personal property, vehicles, goodwill, and business of the Awesome Doughnut-owned and operated Krispy Kreme shops in California (collectively, the “California Assets”) from Awesome Doughnut for an aggregate purchase price of $40.4 million, paid through delivery of a promissory note issued by WKS Holdco, as borrower, payable to Awesome Doughnut, as lender (“Seller Note”). The Seller Note bears interest at a rate of five percent (5%) per annum, payable quarterly in cash or in-kind at the option of the borrower. The Seller Note matures on March 22, 2032, and allows for prepayment without penalty. The Seller Note is secured by a pledge agreement between WKS Holdco and Awesome Doughnut, pursuant to which WKS Holdco pledged its equity interests in W.K.S. Krispy Kreme and other securities, as collateral. The Seller Note is subordinate to the new debt financing obtained by W.K.S. Krispy Kreme described below.

•WKS Holdco contributed the California Assets and $13 million in cash to W.K.S. Krispy Kreme, in exchange for equity interests in W.K.S. Krispy Kreme. In addition, KKDC contributed the franchise rights, operating assets, equipment, personal property, vehicles, goodwill, and business of the Company-owned and operated Krispy Kreme shop in Hawaii (the “Hawaii Assets”) to W.K.S. Krispy Kreme, in exchange for equity interests in W.K.S. Krispy Kreme, pursuant to a Contribution and Exchange Agreement, dated as of the Effective Date, by and between KKDC and the JV. Following the foregoing contributions, WKS’s ownership stake in W.K.S. Krispy Kreme through its affiliate increased to 80% and KKDC’s ownership percentage decreased to 20%. As part of the WKS Refranchising, utilizing in part the proceeds of new debt financing obtained by W.K.S. Krispy Kreme, W.K.S. Krispy Kreme repaid in cash to KKDC the approximately $53.5 million balance of existing intercompany debt owed to KKDC by W.K.S. Krispy Kreme.

As a result of KKDC’s ownership interest decreasing to 20%, Krispy Kreme, Inc. deconsolidated W.K.S. Krispy Kreme from the Company’s Condensed Consolidated Financial Statements and recorded a loss on divestiture of 33.8 million (gross of income taxes) which is included within Gain on refranchising in the Condensed Consolidated Statements of Operations. The loss recognized was calculated as follows:


	As of March 29, 2026
Cash proceeds, net of cash disposed	$	53,487
Seller note received	40,404
Fair value of retained noncontrolling interest in W.K.S. Krispy Kreme - common and preferred shares	14,831
Carrying value of California Assets, Hawaii Assets, and former noncontrolling interest in W.K.S Krispy Kreme	4,150
Less: Carrying value of California Assets, Hawaii Assets, and net assets of W.K.S. Krispy Kreme, including cash and cash equivalents	(140,999)
Less: Direct costs to sell	(1,508)
Loss on divestiture	$	(33,785)

The Company’s 20% ownership in W.K.S. Krispy Kreme consists of common and preferred shares of W.K.S. Krispy Kreme. The Company does not have a controlling interest but does exercise significant influence. As such, the Company will account for this investment under the equity method of accounting in accordance with ASC 323 for the common shares owned. The Company’s preferred shares were determined not to be in-substance common stock, and as such are not eligible for the equity method of accounting under ASC 323. These preferred shares will instead be accounted for as an equity security in accordance with ASC 321. Equity investments are included within Other assets on the Condensed Consolidated Balance Sheets.

Concurrently with the WKS Refranchising, the Company and W.K.S. Krispy Kreme entered into a six-year consulting agreement, effective March 23, 2026, under which the Company will provide strategic advisory services to the joint venture, including governance and strategy support, brand and market advisory, operational and risk advisory, and transitional back-office support services.

Divestiture of Krispy Kreme Japan

On March 2, 2026, the Company completed the sale of 100% of its equity interests in Krispy Kreme Japan for gross cash proceeds of $69.3 million. Krispy Kreme Japan was a previously consolidated entity, and KKI recognized a gain on divestiture of $42.4 million (gross of income taxes) which is included within Gain on refranchising in the Condensed Consolidated Statements of Operations.

2025 Acquisitions and Divestitures

In the quarter ended March 30, 2025, there were no acquisitions or divestitures.

Krispy Kreme, Inc. 10-Q