Cypress-based WKS Restaurant Group has increased its ownership stake in the company’s joint venture with Krispy Kreme Inc. from 45% to 80%.
WKS, founded by Chief Executive Roland Spongberg in 1987, paid approximately $90 million to Krispy Kreme on March 23. The donut chain said it plans to use the funds, which included approximately $50 million of cash, to reduce debt (Nasdaq: DNUT).
The transaction added 23 company-operated locations in California and Hawaii to the joint venture with WKS, which previously counted 50 Krispy Kreme shops and approximately 1,000 delivery locations at Kroger, Target, and Walmart.
“We are reinforcing our confidence in the brand and positioning the business to accelerate development across the Western U.S.,” WKS CEO Spongberg said in a statement.
“Our long-standing partnership with WKS has been key to Krispy Kreme’s growth in the Western U.S.,” Krispy Kreme CEO Josh Charlesworth added. “This transaction advances our strategy to drive sustainable, profitable growth through capital-light refranchising while further reducing our leverage.”
WKS Restaurant Group also operates El Pollo Loco, Wendy’s and Denny’s restaurants, and counts more than 10,000 employees across 19 states.
