Randy’s Donuts, known for its iconic giant doughnut visible from the 405 Freeway, is in growth mode, looking to go from 34 locations to more to more than 40 by year end with deals for hundreds more in the future.
Mark Kelegian, the chief executive of the doughnut chain, said international outposts are a big part of Randy’s business model partly because they are easier to set up.
By the end of the year, the chain will have signed franchising and development deals for up to 300 franchised locations internationally, Kelegian said.
“We have deals in the works for Japan, the United Kingdom, Australia and Switzerland and we hope to have deals in place by the end of the year for Mexico, Indonesia and possibly Taiwan,” he added.
The chain currently has 19 overseas franchise locations in the Philippines, South Korea and Saudi Arabia.
Domestically, the company will have up to 150 franchised locations open or in some stage of development by year’s end, Kelegian continued.
The company has signed deals for 11 stores in Arizona and 10 stores in the Atlanta area, he said.
“We are also in deep negotiations in Michigan, Hawaii, Idaho, Utah, Louisiana, Kentucky and parts of Texas,” he added.
The big different between international and domestic markets is that the overseas market moves a lot faster in terms of construction approvals and permitting, Kelegian said.
“The municipal issues are not nearly as complex or involved as it is here in the United States,” he said.
The chain’s franchisee in the Philippines, for instance, opened eight locations in the last 12 months.
“That is progress,” Kelegian added. “They can open up a store in 30 days where it would be take four, five, six months to open here in the United States.”
Another advantage of overseas markets is that labor costs are lower, which makes franchising a lot easier.
While that is not true for all countries – Australia and the United Kingdom, for instance, have high labor costs…
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