In an effort to expand in the flourishing South American
market, famous doughnut maker
Krispy Kreme Doughnut Inc.
) recently entered into a franchise development agreement with
IRCC Ltda., a Bogota-based restaurant operator. As per the deal,
the restaurateur will launch 25 restaurants across
Colombia's key cities such as Bogota, Medellin and Barranquilla
IRCC, a branch of VA! Group, is operating in the Colombian and
Latin American food service market for more than 30 years. The
company has a proven track record of operating in the premium
retail industry as well as managing food and beverage companies
Armed with superior knowledge about the market and local food
habits, the franchisee is hopeful of successfully spreading the
menu offering of a global brand like Krispy Kreme among
The Zacks Rank #3 (Hold) company sees tremendous growth
potential in this emerging market where it finds
under-penetration of quick-service restaurants as against the
saturated North American countries. Increasing disposable income
has enabled the residents to spend on branded food items. This,
along with the growing middle-income population, makes Colombia a
lucrative investment proposition for Krispy Kreme.
Krispy Kreme, boasting more than 785 restaurants across 21
countries, has been concentrating on international expansion for
the past few years. The company opened its first overseas unit 11
years ago. Since then, the company has made its presence felt at
22 locations across Latin America, the United Kingdom, Russia,
the Asia Pacific and the Middle East.
Earlier this month, the restaurateur debuted in Moscow,
Russia. This restaurant opening came in the wake of signing a
development agreement with the franchisee, LLC Doughnuts Café, in
Apr 2012 to unveil 40 restaurants in Moscow in the coming
Others players in the same industry, which look attractive at
current levels include
AFC Enterprises Inc.
Domino's Pizza, Inc.
CEC Entertainment Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
AFC ENTERPRISES (AFCE): Free Stock Analysis
CEC ENTERTANMNT (CEC): Free Stock Analysis
DOMINOS PIZZA (DPZ): Free Stock Analysis
KRISPY KREME (KKD): Free Stock Analysis
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