Founded in Paducah, Kentucky, in 1937, theiconic company Krispy Kreme Doughnut Corporation is observing its 75thanniversary this year. Long valued throughout the South for its namesake yeast-doughdoughnut covered in a sweet glaze, the company has weathered the ups and downsof changing consumer tastes, alleged mismanagement, financial shenanigans, healthconcerns, and other issues over the years.
After rapid expansion throughout the Southeastin the 1960s and 1970s, the company was acquired by Beatrice Foods in Chicago.A group of franchisees bought the company back in the early 1980s. More rapidexpansion occurred in the 1990s, and in April 2000, Krispy Kreme became apublicly-held entity, initially on the NASDAQ and a year on the New York StockExchange.
Krispy Kreme continued to expand for a fewmore years, but then setbacks began in terms of missed estimates and financialslosses. Management at the time blamed the popularity of the Adkins low-carbdiet for the declines, but analysts suggested that the company was over-storedin too many markets, leading to declining same-store sales.
Source: Chain Store Guide database of Chain Restaurant Operators
Corporate revenues also took a big hit duringthese times because the company derives much of its total revenue from the saleof product and equipment to its franchisees as well as franchise fees androyalties. With its franchisees struggling and stores closing, new managementwas brought in to turn the business around.
Source: Chain Store Guide database of Chain Restaurant Operators
One of the major strategies explored by thenew governing officers was expansion into the international marketplace. KrispyKreme had opened its first non-domestic location in 2001 with a store inOntario, Canada. In 2005, the company recommenced its international expansionprogram by awarding development rights in the Middle East, Hong Kong, Macau,Tokyo, the Philippines and Indonesia. Of the 402locations in operation at the end of 2005, only 17% (68) were international. Atthe end of the most recent quarter, that number had risen to 477 (67%), withstores located in Australia, Bahrain, Canada, China, Indonesia, Japan, Korea,Kuwait, Lebanon, Malaysia, Mexico, the Philippines, Qatar, Saudi Arabia,Thailand, Turkey, UAE, and the United Kingdom. Current CEO Jim Morgan hasannounced plans to have at least 900 Krispy Kreme international outposts by2017.Heading into year 76, the company appearspoised to continue taking on its competitors around the world. Japanesefranchisees plan to nearly quadruple the store count in coming years, andMexican operations will more than double in five years. Krispy Kreme DoughnutCorporation also continues to venture into uncharted territory, with a recentannouncement of an 80-store development agreement for India.
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In the month of August, Chain Store Guidereceived responses from 314 restaurant chains with at least five locations. Ofthe companies surveyed, 28% said that Android or Apple mobile devices arecurrently in use inside their restaurants, with Apple being the dominantmanufacturer. 73% stated they are currently not using any mobile devices.
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