75 Years and Still Hot Now
Founded in Paducah, Kentucky, in 1937, the iconic company Krispy Kreme Doughnut Corporation is observing its 75thanniversary this year. Long valued throughout the South for its namesake yeast-dough doughnut covered in a sweet glaze, the company has weathered the ups and downs of changing consumer tastes, alleged mismanagement, financial shenanigans, health concerns, and other issues over the years.After rapid expansion throughout the Southeast
in 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 rapid expansion occurred in the 1990s, and in April 2000, Krispy Kreme became a publicly-held entity, initially on the NASDAQ and a year on the New York Stock Exchange.Krispy Kreme continued to expand for a few more years, but then setbacks began in terms of missed estimates and financials losses. Management at the time blamed the popularity of the Adkins low-carb diet for the declines, but analysts suggested that
the company was over-stored in too many markets, leading to declining same-store sales.
Corporate revenues also took a big hit during these times because the company derives much of its total revenue from the sale of product and equipment to its franchisees as well as franchise fees and royalties. With its franchisees struggling and stores closing, new management was brought in to turn the business around.
One of the major strategies explored by the new governing officers was expansion into the international marketplace. Krispy Kreme had opened its first non-domestic location in 2001 with a store in Ontario, Canada. In 2005, the company recommenced its international expansion program by awarding development rights in the Middle East, Hong Kong, Macau, Tokyo, the Philippines and Indonesia.Of the 402 locations in operation at the end of 2005, only 17% (68) were international. At the end of the most recent quarter, that number had risen to 477 (67%), with stores 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 has announced plans to have at least 900 Krispy Kreme international outposts by 2017.
Heading into year 76, the company appears poised to continue taking on its competitors around the world. Japanese franchisees plan to nearly quadruple the store count in coming years, and Mexican operations will more than double in five years. Krispy Kreme Doughnut Corporation also continues to venture into uncharted territory, with a recent announcement of an 80-store development agreement for India.
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In the month of August, Chain Store Guide received responses from 314 restaurant chains with at least five locations. Of the companies surveyed, 28% said that Android or Apple mobile devices are currently in use inside their restaurants, with Apple being the dominant manufacturer. 73% stated they are currently not using any mobile devices.