Revenue Recognition
Disaggregation of Revenues
Revenues are disaggregated as follows:
| | | | | | | | | | | | | | | | | |
| Fiscal Years Ended |
| December 28,
2025 | | December 29,
2024 | | December 31,
2023 |
Company Shops, Fresh Delivery, and Branded Sweet Treats | $ | 1,445,211 | | | $ | 1,574,449 | | | $ | 1,592,573 | |
Mix and equipment revenue from franchisees | 40,909 | | | 53,329 | | | 58,593 | |
Franchise royalties and other | 36,496 | | | 37,619 | | | 34,938 | |
| Total net revenues | $ | 1,522,616 | | | $ | 1,665,397 | | | $ | 1,686,104 | |
Other revenues include advertising fund contributions from franchisees, rental income, development and franchise fees, and licensing royalties from customers for use of the Krispy Kreme brand, such as Keurig coffee cups.
Contract Balances
Deferred revenue and related receivables are as follows:
| | | | | | | | | | | | | | | | | |
| December 28,
2025 | | December 29,
2024 | | Balance Sheet Location |
Trade receivables, net of allowances of $976 and $1,060, respectively | $ | 55,736 | | | $ | 57,439 | | | Accounts receivables, net |
Deferred revenue: | | | | | |
Current | $ | 16,668 | | | $ | 16,506 | | | Accrued liabilities |
Noncurrent | 9,780 | | | 8,569 | | | Other long-term obligations and deferred credits |
| Total deferred revenue | $ | 26,448 | | | $ | 25,075 | | | |
Trade receivables at the end of each fiscal year relate primarily to payments due for royalties, franchise fees, advertising fees, sale of products, and licensing fees. Deferred revenue primarily represents the Company’s remaining performance obligations under gift cards and franchise and development agreements for which consideration has been received or is receivable and is generally recognized on a straight-line basis over the remaining term of the related agreement. The noncurrent portion of deferred revenue primarily relates to the remaining performance obligations in the franchise and development agreements. Of the deferred revenue balances as of December 29, 2024, $10.1 million was recognized as revenue in the fiscal year ended December 28, 2025. Of the deferred revenue balance as of December 31, 2023, $13.5 million was recognized as revenue in fiscal the year ended December 29, 2024.
Transaction Price Allocated to Remaining Performance Obligations
Estimated revenue expected to be recognized in the future related to performance obligations that are either unsatisfied or partially satisfied as of December 28, 2025 is as follows:
| | | | | |
Fiscal year | |
| 2026 | $ | 10,940 | |
| 2027 | 3,554 | |
| 2028 | 2,799 | |
| 2029 | 1,416 | |
| 2030 | 675 | |
Thereafter | 7,064 | |
| $ | 26,448 | |
The estimated revenue in the table above relates to gift cards, consumer loyalty programs, and franchise fees paid upfront which are recognized over the life of the franchise agreement. The estimated revenue does not contemplate future issuances of gift cards nor benefits to be earned by members of consumer loyalty programs. The estimated revenue also does not contemplate future franchise renewals or new franchise agreements for shops for which a franchise agreement or development agreement does not exist as of December 28, 2025. The Company has applied the sales-based royalty exemption which permits exclusion of variable consideration in the form of sales-based royalties from the disclosure of remaining performance obligations in the table above.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.