Krispy Kreme doughnuts in Malaysia, thanks to Berjaya

 

Berjaya Krispy Kreme Doughnuts Sdn Bhd (BKKD), the franchisee of the American chain of doughnut stores in Malaysia, will spend up to RM24 million to open 20 outlets in five years.

From the total, over RM1 million has been invested in a flagship store in Berjaya Times Square. The store will open its doors to the public on Monday.

BKKD executive director Datuk Francis Lee said most of the Krispy Kreme outlets will be located in the Klang Valley.

Berjaya Group, which now holds five franchises in the food and beverage sector, is upbeat on its latest franchise despite the weak economic conditions.

Lee said half of the battle is already won with Krispy Kreme's brand. This is strengthened by Berjaya's experience in franchise business.

He said the local food sector is not badly affected by the global crisis and the government stimulus packages will help revive the economy.

"With the crisis, we can now get lower rental at shopping malls, where previously it was hard to find a good location and rental was high.

"We believe the pie is big enough for us to share (with other doughnut chain stores)," he told a news conference in Kuala Lumpur yesterday.

Also present were Krispy Kreme International president Jeff Welch and vice president (marketing) Jim Rogers.

Krispy Kreme, which was founded 72 years ago in North Carolina, is now present in 16 countries outside the US.

Malaysia is the third country in South-east Asia, after the Philippines and Indonesia, to embrace Krispy Kreme's signature hot original glazed doughnuts.

Berjaya holds 70 per cent share of BKKD, while the rest is held by a few individuals.

Lee said BKKD will finance the expansion of Krispy Kreme with internal funds and borrowings. It expects to break even in the second year.

BKKD will open a second outlet by the end of this month at Mid Valley Megamall.

Meanwhile, Welch said after Malaysia, Krispy Kreme will be in Turkey and China.

He said Berjaya is chosen as the franchisee in Malaysia due to the company's strong experience in franchise.

"We also take into account the overall state of the economy, good income level and the people here enjoy good treats," he said.