No Dough for Krispy Kreme Australia

Krispy Kreme’s master franchise in Australia is filing for bankruptcy.Krispy Kreme Australia, which is a chain of doughnut retailers as opposed to the automated doughnut factories that bake them before your eyes in the U.S., blames soft sales and rising costs for its need to restructure.

Its insolvency comes just as the Baskin-Robbins master franchise of Dunkin’ Brands has gone south.

Local media wonders if it is less about the troubles with a contract requiring rapid roll-outs but more about different tastes. “Their predicaments raise questions about whether Australian consumer tastes have evolved to such a degree that it is now near-impossible for US brands to find long-term success on our shores,” observes Australia’s Herald Sun. Don Meij, who bought the Australian franchise rights for Domino’s Pizza told The Australian, “It's a really tough market for an American. We might talk the same, dress similar, feel similar as countries, but we're very different."

How are they different? Apparently, they like independent restaurants over big chains where the food is the same – with the exceptions of McDonald’s, Hungry Jack, etc. Its unionized labor market makes its workers, largely students, among the best skilled and paid in the world.

Apparently, that’s why the media, American scholars and businessmen Down Under feel that U.S. brands like Krispy Kreme and Baskin-Robbins may be doomed.