Krispy Kreme From Wikipedia, the free encyclopedia Jump to: navigation, search Krispy Kreme Type Public (NYSE: KKD) Founded 1937 Headquarters Winston-Salem, North Carolina, USA Industry Restaurant Products Doughnuts, Soft drinks, Hot Drinks Revenue ▲Over 9 billion USD (2007)[1] Net income ▼ -67 million USD (2007)[1] Employees 3,288 (2008)[1] Website http://www.krispykreme.com/ Krispy Kreme is a chain of doughnut stores. Its parent company is Krispy Kreme Doughnuts, Inc. (NYSE: KKD), based in Winston-Salem, North Carolina, United States. Krispy Kreme sells a variety of doughnuts, but it is most famous for its traditional glazed doughnut, often served warm. Select varieties of Krispy Kreme doughnuts are carried in many supermarkets, 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; Loblaws supermarkets and Petro-Canada gas stations in Canada; and most 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.[2] As of February 2008, Kuwait-based M A Kharafi Group owned 9.1% of Krispy Kreme Doughnut Inc. [3] 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, raise yeast, 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.[4] A Krispy Kreme store in Atlanta, Georgia with the Hot Doughnuts sign on.Contents [hide] 1 History 1.1 Growth 2 Problems 2.1 New England 2.2 Arizona and New Mexico 2.3 California 2.4 Pennsylvania 2.5 Canada 2.6 Hong Kong 3 International operations 4 Kool Kreme 5 References 5.1 Other references 6 External links [edit] History This section needs additional citations for verification. Please help improve this article by adding reliable references (ideally, using inline citations). Unsourced material may be challenged and removed. (March 2007) Krispy Kreme delivery truck, circa 1939 An assortment of doughnuts on display in a shop in Washington, D.C..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, Louisiana. Rudolph began selling the yeast doughnuts in Paducah and delivered them on his bicycle. The operation was moved to Nashville, Tennessee, 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, 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 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. A location in Eden Prarie, closed as of February 21, 2008, along with all Minnesota, USA locationsIn 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, the trans fat content of all Krispy Kreme doughnuts was reduced to 0.5 of a gram or less. The U.S. Food and Drug Administration, in its guidelines, allows companies to round down to 0 g in its nutrition facts label even if the food contains as much as 0.5 of a gram per serving. Krispy Kreme elected to benefit from this regulatory loophole in its subsequent advertising campaign, touting its doughnuts as "trans fat free" and having "0 grams trans fat!". [5] [edit] Growth Krispy Kreme doughnuts being made at a restaurant in Sydney, AustraliaKrispy 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.[6] 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. [7] [edit] Problems A Krispy Kreme employee wearing the typical uniform with the signature garrison cap. [edit] New England In 2002, Krispy Kreme opened its first store in New England (the "home turf" of competitor Dunkin' Donuts) in Newington, Connecticut. What followed was a period of aggressive expansion throughout the region, followed by the closing of all stores, outside of one remaining in Connecticut, in the region. Many people have their own reason for why these New England stores failed. Some say that New Englanders' fidelity to Dunkin Donuts led to the Krispy Kreme collapse, others say that Krispy Kreme's coffee "left many locals unimpressed, a mortal sin in the joe-loving Hub."[8] [edit] Arizona and New Mexico On August 11, 2006, all 11 Krispy Kreme stores in Arizona and New Mexico were closed without warning when Rigel Corporation, the franchisee 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 did not 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 is not 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.[9] [edit] California In January 2006, Krispy Kreme terminated the franchise license of Great Circle Family Foods LLC, alleging non-payment of required fees.[10] 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.[11] On August 22, 2007 Great Circle Family Foods and some of its wholly owned subsidiaries filed for Chapter 11 Bankruptcy.[12] [edit] Pennsylvania On July 16, 2008, Sheetz, a convenience store chain based in Altoona, PA, quit buying Krispy Kreme doughnuts because of the opening of its own kitchen. As a result of this, on December 14, 2008, the Krispy Kreme store located in Altoona closed its doors without warning. Sheetz was one of Krispy Kreme's largest consumers. [edit] 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) while the other two stores are in Mississauga, Ontario and Delta, British Columbia. 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.[13] [edit] Hong Kong The Hong Kong franchisee of Krispy Kreme went into liquidation on 27 October 2008. The directors had tried to find a purchaser in the previous 3-4 months and have not been successful. Five of the seven Hong Kong stores closed the night before the 27th, with only two outlets at the city's airport to remain open.[14] [edit] International operations Inside a Krispy Kreme store in Portsmouth, England. A Krispy Kreme store at Times Square, Hong Kong.Main article: Krispy Kreme operations by country 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, Puerto Rico, South Korea, Hong Kong, Indonesia, the Philippines, Japan, the United Arab Emirates, Qatar, Saudi Arabia, Lebanon (in 2008) and Bahrain. The first Krispy Kreme store to open outside North America was in Sydney, Australia[15]. International Krispy Kreme store openings have continued to draw crowds. The latest Krispy Kreme stores to open in Australia, at the Queen St. Mall in Brisbane City in April 2008, has proven to be very popular with long queues at all hours and people camping out on the first day of the opening.[16]On Saturday, July 5th, 2008, Krispy Kreme opened its doors in the Pacific Fair Shopping Centre on the Gold Coast. [edit] Kool Kreme Seattle based franchisee KremeWorks LLC, opened the first Kool Kreme inside the Tacoma Mall Krispy Kreme on October 25, 2007. Kool Kreme is a 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.[17] [edit] References ^ a b c "Company Profile for Krispy Kreme Doughnuts Inc (KKD)". http://zenobank.com/index.php?symbol=KKD&page=quotesearch. Retrieved on 2008-10-03. ^ "Krispy Kreme Doughnuts Inc. (KKD) Income statement". Yahoo! Finance. 2006-12-16. http://finance.yahoo.com/q/is?s=KKD&annual. Retrieved on 2006-12-16. ^ http://www.zawya.com/story.cfm/sidZAWYA20060413104226 ^ "Krispy Kreme Doughnuts Inc. (KKD): Competitors". Yahoo! Finance. 2006-12-16. http://finance.yahoo.com/q/co?s=KKD. Retrieved on 2006-12-16. ^ "Krispy Kreme's Entire Menu: Zero Grams Trans Fat". http://www.reuters.com/article/pressRelease/idUS120625+07-Jan-2008+PRN20080107/. ^ Krispy Kreme CEO departs - Triangle Business Journal: ^ "Krispy Kreme using TV, radio to sell treats". MSN. http://www.msnbc.msn.com/id/11144425/. ^ "The rise and fall of Krispy Kreme in New England". The Boston Globe. 2006-07-23. http://www.boston.com/business/globe/articles/2006/07/23/the_rise_and_fall_of_krispy_kreme_in_new_england/. Retrieved on 2006-07-23. ^ "Krispy Kreme to make return to Mesa". azcentral.com. 2008-04-22. http://www.azcentral.com/business/articles/2008/04/21/20080421biz-krispy21-ON.html. Retrieved on 2006-04-22. ^ (Associated Press) Krispy Kreme Ends Franchisee's Licenses ^ Page 36 from a 10-K SEC Filing, filed by KRISPY KREME DOUGHNUTS INC on 10/31/2006 ^ Krispy Kreme franchisee in Fullerton files for bankruptcy protection - Fast Food Maven - OCRegister.com ^ Krispy Kreme's Canadian assets for sale ^ "Krispy Kreme's Hong Kong Franchisee in Liquidation (Update1)". Bloomberg. 2008-10-27. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNa9sLbnua1s. ^ American Krispy Kreme says PR is way to Australian stomachs B&T online 7 March 2007 ^ Krispy Kreme store opens - WhatsOn - BrisbaneTimes - brisbanetimes.com.au ^ STLtoday - Krispy Kreme tests soft-serve dessert [edit] Other references I Remember Paducah When by Barron White ISBN 0-9113338-72 Winston-Salem Journal, "Krispy Kreme Lawsuit Filed." December 31, 2004.[dead link] Krispy Kreme Corporation Investor FAQ Krispy Kreme Press Kit Krispy Fills Kreme-Filled Hole in the Market Forbes Krispy Kreme Doughnuts Corp. Page [edit] External links Wikimedia Commons has media related to: Krispy Kreme Official Krispy Kreme web site Official Australia Krispy Kreme web site Official Japanese Krispy Kreme web site Mr. Donut vs. Krispy Kreme! Yahoo! - Krispy Kreme Doughnuts, Inc. Company Profile Feelin' Foodie: Krispy Kreme Westfield Fountain Gate The Age: Horde of the Rings How Stuff Works: Krispy Kreme Retrieved from "http://en.wikipedia.org/wiki/Krispy_Kreme" Categories: Companies listed on the New York Stock Exchange | Companies established in 1937 | Fast-food chains of the United States | Fast-food chains of Canada | Fast-food franchises | Doughnut shops | Companies based in Winston-Salem, North Carolina | Bakeries of the United States | Restaurant chains in the United States