To assign a valuation multiple for Krispy Kreme franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
Under $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.34
Over $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.86
After a few years in the business, when you go to sell your Krispy Kreme franchise based on the median multiple of 0.34 and net sales of 2021 of $3,500,000 it would sell for about $1,190,000. This is just 47% of your initial investment.
However, as an owner of multiple Krispy Kreme franchises, you do have the ability to make a profit. Owners in the Food and Beverage Industry with over $5 million in sales have a median multiple of .86. So, if you had 10 Krispy Kreme franchises this would be ~$35,000,000 in sales. That, at the multiple of 0.86 would sell for $30,100,000. This is higher than the estimated investment of $24,987,500 and makes around $5 million profit.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.