Krispy Kreme calls it “doughnut theater.” And the sight and smell of one of its center-stage doughnut machines, which can fry and glaze as many as 2,600 doughnuts an hour, create such an opening-day stampede that police are routinely needed to handle traffic snarls.
THIS SLAVISH DEVOTION to its neon hot now signs has made this chain as much a cultural phenomenon as a business. It’s grown to 278 locations in 37 states and Canada, producing some 2.7 billion doughnuts a year. Shares in Krispy Kreme, which went public two years ago, have risen more than threefold. The company is now pushing into other international markets like Australia and Spain, betting dollars to doughnuts that it can replicate feeding frenzies abroad.
The secrets to its success? One is its 65-year-old recipe, locked away in a vault. Another is consistency. To make between 4,000 and 10,000 dozen doughnuts a day—24 hours a day—managers must have all the tools at hand to keep the factory humming. The company’s customized Web portal, mykrispykreme.com, is designed to take guesswork, and valuable time, out of managing a franchise and let owners connect more directly with headquarters. Stakes are high, after all, with annual revenue of a franchise often topping $2 million.
Log on, and the opening screen offers weather news (more people buy doughnuts and coffee when the weather turns). That little innovation was “ridiculously simple,” but has paid big dividends by allowing managers to better forecast how many doughnuts to make, says Frank Hood, the company’s chief information officer. Planning to add another franchise? Architectural renderings and blueprints are there. Ordering supplies and doughnut mix is all done online, eliminating costly errors. “I can knock off inventory in 15 minutes now,” says Jesse Mendez, who manages a Krispy Kreme outlet in North Miami. “I’ve seen a good 2 to 3 percent increase in profitability just from the portal.”
The portal is even a virtual help desk. Need to know how to calibrate a coffee grinder? Fix a fryer? It’s all there, with streaming video and audio and graphics on what to do. The videos, called “Hot Topics,” are available 24 hours a day. Granted, they’re not the most riveting performances. But in the rapidly growing world of Krispy Kreme doughnut theater, they’re winning rave reviews from franchise owners.
© 2003 Newsweek, Inc.