Krispy Kreme, Inc.

Restaurants | Financial Main Page | IGHRM Main Page
Disclaimer:

International Guild of Hospitality & Restaurant Managers

Krispy Kreme Doughnuts, Inc., incorporated in 1999, is a branded specialty retailer of doughnuts. The Company has established Krispy Kreme as a consumer brand. Krispy Kreme's principal business is owning and franchising Krispy Kreme doughnut stores where it makes and sells over 20 varieties of doughnuts, including its Hot Original Glazed. Each of its stores is a doughnut factory with the capacity to produce from 4,000 dozen to over 10,000 dozen doughnuts daily.

The Company's business is driven by two complementary business units: its Company and franchise stores (collectively, Store Operations) and Krispy Kreme Manufacturing and Distribution (KKM&D). Its principal source of revenue is the sale of doughnuts produced and distributed by Store Operations. As part of its business model, Krispy Kreme's stores are both retail outlets and highly automated, high-volume producers of its doughnut products, and can sell their products through its multiple sales channels. Each of its stores offers at least 15 of its more than 20 varieties of doughnuts, including its signature Hot Original Glazed and nine other prescribed varieties. The Company also sells its special blend Krispy Kreme coffee, other beverages, other bakery items and collectible memorabilia, such as tee shirts, sweatshirts and hats. As of February 3, 2002, approximately 119 of its stores sold to major grocery store chains, including Kroger (which accounted for 9.4% of its total revenues in fiscal 2001 and 7.9% in fiscal 2002), Food Lion, Giant Food and Acme Markets, and to local and national convenience stores, as well as to select co-branding customers. On the other hand, the mission of KKM&D is to create competitive advantages for its stores, while operating as a profitable business enterprise. Krispy Kreme has developed important operating competencies and capabilities, which it uses to support its stores. The Company implements the mission of KKM&D through three strategic business units: mix manufacturing, equipment manufacturing and distribution centers.

Krispy Kreme divides its stores into three categories of ownership: Company stores, associate stores and area developer stores. The Company refers to associates and area developers as franchisees, collectively. Krispy Kreme owned 75 stores as of February 3, 2002 . Company stores, as of February 3, 2002 , included nine stores in Northern California and two stores in Philadelphia , both of which are operated by area developer joint ventures in which Krispy Kreme has a majority ownership interest. The Company had 23 associates that operated 52 stores as of February 3, 2002 . As of February 3, 2002 , Krispy Kreme had 24 area developers operating 91 stores with contractual commitments to open over 200 stores in their territories during their initial development schedule. As of February 3, 2002 , the Company held a majority interest in its Northern California and Philadelphia area developers, and minority interests in seven additional area developer markets, in each case through joint venture arrangements.

The Company's competitors include Dunkin' Donuts, Hostess and Dolly Madison.

Disclaimer:
The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly urged to obtain professional advice with qualified individuals or corporations for any investments of funds.