Everything about Krispy Kreme Doughnuts totally explained
Krispy Kreme is a chain of
doughnut stores. Its parent company is
Krispy Kreme Doughnuts, Inc., based in
Winston-Salem, North Carolina,
United States.
Krispy Kreme sells a variety of
doughnuts, but it's most famous for its traditional
glazed doughnut, often served warm. Select varieties of Krispy Kreme doughnuts are carried in many
grocery stores,
convenience stores, and
gas stations. Krispy Kreme doughnuts can also be found in some larger
Wal-Mart and
Target stores in the
United States,
Wal-Mart,
Loblaws supermarkets and
Petro-Canada gas stations in
Canada, and now many
Tesco supermarkets and
Tesco Extra hypermarkets in the
United Kingdom.
The company's growth was steady prior to its
initial public offering but profits have decreased in recent quarters.
As of February 2008, Kuwait-based M A Kharafi Group owned 9.1% of Krispy Kreme Doughnuts Inc.
Most free-standing Krispy Kreme stores are constructed with a long window between the customer area and the kitchen allowing patrons to watch the operation of the doughnut making machines. The machines produce rings of
dough,
yeast raise,
bake,
deep-fry, flip, and
glaze the doughnuts. These stores have a neon sign that, when lit (usually morning and evening), tells customers that hot, fresh Original Glazed doughnuts are coming off the line at that moment. Some smaller locations, however, bring in their doughnuts from other locations rather than producing them on-site. Krispy Kreme's competitors within the United States include
Dunkin' Donuts,
Starbucks, and
Winchell's.
History
The founder,
Vernon Rudolph, worked for his uncle, Ishmael Armstrong, who purchased a secret recipe for yeast-raised doughnuts and a shop on Broad Street in
Paducah, Kentucky, from Joseph LeBeouf of Lake Charles, LA . Rudolph began selling the yeast doughnuts in Paducah and delivered them on his bicycle. The operation was moved to Nashville, TN, and other family members joined to meet the customer demand. Rudolph sold his interest in the Nashville store and in 1937 opened a doughnut shop in Winston-Salem, NC, and began selling to groceries and then directly to individual customers. The first Krispy Kreme store was located in a rented building on South Main Street in Winston-Salem in what is now called historic
Old Salem.
By the 1960s, Krispy Kreme was well-known throughout the southeastern United States, and it began to expand into other areas of the country.
In 1976, Krispy Kreme Doughnut Corporation became a wholly owned
subsidiary of
Beatrice Foods Company of
Chicago, Illinois. The headquarters for Krispy Kreme remained in Winston-Salem.
A group of
franchisees purchased the
corporation back from Beatrice Foods in 1982.
In 2003, a pilot project in
Mountain View, California, to sell doughnuts through car windows and sunroofs at a busy intersection (with
wireless payment) failed.
On
June 3,
2005, National Doughnut Day in the US, participating franchises gave away free doughnuts.
On
February 19,
2007, Krispy Kreme began selling the Whole Wheat Glazed doughnut in an attempt to appeal to the health conscious. The doughnut has twenty
kilocalories (83,736
J) fewer than the original glazed (180 vs. 200 kcal) and contains more fiber (2 grams vs. 0.5 grams). As of January 2008, Krispy Kreme doughnuts are free of trans fats and are labeled as "0 grams of trans fat".
Growth
Krispy Kreme began another phase of rapid expansion in the 1990s, opening stores outside the southeastern
United States where most of their stores were located. Then, in December 2001, Krispy Kreme opened its first store outside the U.S. in
Mississauga,
Ontario,
Canada, just outside
Toronto. Since 2004, Krispy Kreme has rapidly expanded its international operations.
On
April 5,
2000, the corporation went
public on the
NASDAQ using the
ticker symbol KREM. On
May 17 2001, Krispy Kreme switched to the
New York Stock Exchange, with the ticker symbol KKD, which is its current symbol.
On
January 18 2005, Krispy Kreme announced
Stephen Cooper, chairman of financial consulting group
Kroll Zolfo Cooper LLC, as interim
CEO. Cooper replaces
Scott Livengood, who the company said has retired as chairman, president, CEO and a director. The company also named
Steven Panagos, a managing director of Kroll Zolfo, as president and
COO.
Although based on informal advertising such as word-of-mouth, in 2006, Krispy Kreme moved into television and radio advertisements, beginning with its "Share the Love" campaign with heart-shaped doughnuts.
Problems
Arizona and New Mexico
On August 11, 2006, all 11 Krispy Kreme stores in Arizona and New Mexico were closed without warning when the Rigel Corporation, the franchise responsible for all Krispy Kreme stores in these states, filed for bankruptcy. There was no statement from Rigel's corporate offices regarding the closures and no word was given regarding a possible reopening of the stores. The closing was further controversial because store owners didn't provide any warning of the closing to their employees, except to an undisclosed number who were notified the day before. Most claim not to have known about the impeding closures until they came to work and found the location closed (this was typical of Rigel's practices elsewhere.) The total number of employees affected isn't known, but a local report indicated 55 employees were without work just in Tucson, Arizona.
Krispy Kreme reentered the Arizona market when a new franchisee reopened its East
Mesa, Arizona location on May 13, 2008. This location was purchased by Krispy Kreme after Rigel closed it in 2006. The new franchise owner, Dan Brinton, plans to eventually open 4 to 5 factory stores in the Phoenix market. These stores are planned to support 10 to 15 smaller non-factory stores that will only sell doughnuts and other products.
California
In January 2006, Krispy Kreme terminated the franchise license of Great Circle Family Foods LLC, alleging non-payment of required fees. At the time, they were one of the largest franchisees, operating 28 stores in Southern California. Preceding this action was a financial dispute by Great Circle, culminating in their September lawsuit filed against Krispy Kreme. The lawsuit was settled in July 2006 and led to the reinstatement of Great Circle's license.
On
August 22,
2007 Great Circle Family Foods and some of its wholly owned subsidiaries filed for
Chapter 11 Bankruptcy.
Canada
The 18 stores which opened in Canada, out of 32 planned, have since been reduced to 5 stores. Three of those exist in Quebec (in
Laval,
Greenfield Park, and
Quebec City.) and other two stores are in
Calgary, Alberta and
Mississauga, Ontario. Krispy Kreme's Canadian assets were put up for sale in 2005 seven weeks after the U.S.-based doughnut company had the firm that owns and operates stores in Canada placed under bankruptcy protection.
International operations
Besides the stores that Krispy Kreme operate in the United States and Canada, there are also franchise owned stores in the
United Kingdom,
Australia,
Kuwait,
Mexico,
South Korea,
Hong Kong,
Indonesia,
The Philippines,
Japan, the
United Arab Emirates,
Qatar and
Saudi Arabia. The first Krispy Kreme store to open outside North America was in
Sydney,
Australia.
The latest Krispy Kreme stores to open in Puerto Rico and Australia, on the Queen St. Mall in Brisbane City has proven to be very popular with long queues at all hours and people camping out on the first day of the opening.
Kool Kreme
Seattle based franchissee KremeWorks LLC, opened the first Kool Kreme inside the Tacoma Mall Krispy Kreme on
October 25,
2007. Kool Kreme is the new cousin to the Krispy Kreme brand. Kool Kreme includes fresh fruit toppings to add to sundaes and shakes; they also offer cones with three different choices of soft serve: Very Vanilla, Deep Chocolate, and Very Deep Swirl.
Further Information
Get more info on 'Krispy Kreme Doughnuts'.
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