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Krispy Kreme Essay

1807 words - 7 pages

Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts. Its principal business is owning and franchising Krispy Kreme doughnut stores where over 20 varieties of doughnuts, including its Hot Original Glazed, are made, sold and distributed and where an array of coffees and other beverages are offered. Krispy Kreme began a single doughnut shop in Winston-Salem, North Carolina on July 13, 1937, where Vermon Rudolph bought a secret yeast-raised doughnut recipe from a French chef from New Orleans, rented a building in and began selling Krispy Kreme doughnuts. Within a short time, Rudolph’s products became so popular that he cut a hole in his factory’s wall to sell directly to customers, thus was born the central Krispy Kreme retail concept: the factory store. By the 1940s and 1950s there were a small chain of stores that were mostly family-owned, 29 shops in 12 states. During the 1960s Krispy Kreme had a steady growth throughout the Southeast and began expanding.After Rudolph’s death, in 1973, Beatrice Foods bought the company and quickly expanded it to more than 100 locations. Beatrice introduced other products, such as soups and sandwiches, and cut costs by changing the appearance of the stores and substituting cheaper ingredients in the doughnut mixture. By 1980 the company was starting to fail, so Beatrice put it up for sale. A group of franchisees who had been the first Krispy Kreme franchisees, completed a leveraged buyout of the company in 1982, and they also bought back the original doughnut formula and the company’s traditional logo. The company struggled for awhile, but by 1989, Krispy Kreme had become debt-free and had slowly begun to expand. A store was opened in New York in 1986, in 1999 one was opened in California, and in December of 2001 there was a store opening in Toronto Canada.On April 5, 2000, the corporation went public on the NASDAQ using the ticker symbol KREM in what was one of the largest initial public offerings in recent years; one day after the offering, Krispy Kreme’s share price was $40.63, giving the firm a market capitalization of nearly $500 million. On May 17, 2001, Krispy Kreme switched to the New York Stock Exchange, with the ticker symbol KKD, which is its current symbol. PricewaterhouseCoopers LLP served as Krispy Kreme’s independent registered public accounting firm for fiscal 2005, 2006, and 2007. The primary industry of Krispy Kreme is fast food or restaurant and their ranking is 54 out of 54.Krispy Kreme Doughnuts has had a rough go of it in the last few years. They have showed an annual loss for the last three years beginning in their 2005 annual filing. This is widely regarded to be a direct effect of their rapid expansion in the previous years. As of October 2007 Krispy Kreme had Approximately 449 store locations (including satellite stores) in 41 U.S. states and 11 foreign countries. However, things do look a little better for them this year as compared to the...

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