Krispy Kreme

• 1. A Name Spelled Wrong

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  Krispy Kreme is a doughnut company whose name is spelled wrong on purpose. The brand is a deliberate non-standard spelling of crispy cream, chosen for marketing effect. Its founder, Vernon Rudolph, lived from 1915 to 1973, and he did not invent the recipe behind the business. He bought a yeast-raised recipe from a chef in New Orleans. Today the company is an American multinational doughnut maker and coffeehouse chain. This documentary asks how a single bought recipe grew into an international brand. It asks why fast growth nearly broke the company. And it asks what one doughnut maker can teach us about franchising, public trust and the limits of novelty.

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• 2. Kentucky To Carolina

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  In 1933, eighteen-year-old Vernon Rudolph and his brother Lewis went to work for their uncle, Ishmael Armstrong, in Paducah, Kentucky. Armstrong ran a small general store that sold a wide variety of goods. Its doughnuts were especially popular. The exact origin of the recipe is still partly a mystery. It is believed that Armstrong drew inspiration from Joseph LeBeouf, an Ohio River barge cook famous for light, fluffy doughnuts that contained potatoes.

  The Great Depression was hard on the store. In 1934, Vernon and Ishmael moved to the larger city of Nashville, Tennessee, hoping business would be better there. The uncle and nephew sold only doughnuts and opened The Krispy Kreme Doughnut Company in a rented store on Gallatin Road. The shop did so well that Vernon's father, Plumie, also left Kentucky to help sell doughnuts.

  In 1937, Rudolph opened a store of his own. He chose Winston-Salem, North Carolina, after learning that his favorite cigarette company, Camel Cigarettes, was headquartered in that small city. The first North Carolina store stood in a rented building at 534 South Main Street, in what is now called historic Old Salem. Rudolph mostly sold to convenience stores. He also sold hot doughnuts to individual customers who came during production time, between midnight and 4 a.m.

  A local architect named Benny Dinkins designed the Krispy Kreme logo. In 1939, a bakery opened in Akron, Ohio, the first Krispy Kreme outside the South.

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• 3. Spreading Out

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  By the 1950s, Krispy Kreme had grown beyond North Carolina, with an early store in Savannah, Georgia. In the 1960s the brand was known throughout the Southeast, and it began moving into other areas. Ownership changed in 1976, when Krispy Kreme Doughnut Corporation became a wholly owned subsidiary of Beatrice Foods of Chicago, Illinois. Headquarters stayed in Winston-Salem. In 1982, a group of franchisees bought the corporation back from Beatrice Foods.

  The 1990s brought another phase of rapid expansion. Stores began opening outside the southeastern United States, where most of them had been. In December 2001, the first store outside the country opened in Mississauga, Ontario, Canada.

  Joining the chain as a franchise owner takes serious money. The minimum investment ranges from about $450,000 to above $4 million.

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• 4. Boom And Bust

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  On the 5th of April 2000, Krispy Kreme went public on the NASDAQ at $21 a share, under the ticker symbol KREM. On the 17th of May 2001, it switched to the New York Stock Exchange with the ticker KKD. It kept that ticker until its private acquisition. In August 2003, the stock reached its all-time high of $50, a gain of 135% from its IPO price.

  For the fiscal year ending in February 2004, the company reported sales of $665.6 million and operating profits of $94.7 million. Those results came from almost 400 stores, counting international locations. The market first saw a business with solid fundamentals, adding stores at a rapid clip while sales and earnings kept rising.

  In May 2004, the company missed quarterly estimates for the first time and suffered its first loss as a public company. Chairman and CEO Scott Livengood blamed the low-carbohydrate diet craze. Analysts were skeptical. Commentary at the time said that "blaming the Atkins diet for disappointing earnings carried a whiff of desperation." Rival Dunkin' Donuts had not suffered from the low-carb trend over the same period.

  By 2005, the stock had lost 75-80% of its value. Earnings were declining, and the SEC was investigating the company's alleged improper accounting practices. A turnaround plan in December 2005 aimed to close unprofitable stores to avoid bankruptcy. Analysts looking for a deeper explanation pointed to how the company had grown.

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• 5. Franchise Squeeze

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  Analysts suggested that Livengood had expanded too rapidly after the IPO, over-concentrating certain markets. At the parent-company level, this worked at first, because new franchisees paid royalties. Over time it hurt the franchisees, who had to compete with one another. In the 2003-04 fiscal year, the parent enjoyed a 15% increase in second-quarter revenues. Same-store sales rose only a tenth of a percent.

  Supermarkets and gas stations also began carrying the doughnuts, and these outlets soon contributed up to half of the chain's sales. That added market saturation and more competition for franchisees. The newer outlets needed pre-made doughnuts, not the ones made fresh in factory stores. This alienated devoted fans. A once-special treat had become ubiquitous, and its novelty faded.

  The parent company had another source of profit. It required franchisees to buy mix and doughnut-making equipment from its Krispy Kreme Manufacturing and Distribution division, known as KKM&D. In 2003, KKM&D earned $152.7 million, which made up 31% of sales, with a reported operating margin of 20% or higher. The mark-ups came largely at the franchisees' expense. Dunkin' Donuts generally avoids selling equipment or materials to its franchisees, which keeps both sides' interests aligned.

  Franchisees also accused Krispy Kreme of channel stuffing. Their stores reportedly received twice their regular shipments in the final weeks of a quarter, so headquarters could make its numbers. Questions also surrounded the company's buybacks of franchisees, including some operated by company insiders. A report released in August 2005 singled out then-CEO Livengood and then-COO John W. Tate for blame over the accounting scandals. It did not find that they committed intentional fraud.

  On the 4th of March 2009, the SEC issued a cease and desist order against Krispy Kreme. It cited inflated revenues and illicit dealings in buying back the company's own stores to prop up revenues. The company had also set up mechanisms to guarantee it beat earnings estimates by $0.01. In the end, Krispy Kreme reduced its net income over two years by more than $10.5 million. The order also proposed remedial actions for the company to take.

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• 6. New Owners, New Channels

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  In 2010, Krispy Kreme Express, a delivery service for businesses, began testing at the Battleground Avenue location in Greensboro, North Carolina. In the early 2010s, the company began developing shops with tunnel ovens, which allow an all-day Hot Now experience of hot doughnuts. On the 24th of February 2015, it opened its 1,000th shop, in Kansas City, Kansas.

  In May 2016, JAB Holding Company announced an offer of $1.35 billion to buy Krispy Kreme and make it privately owned. The deal closed on the 27th of July 2016. Shareholders received $21 in cash for each share, the same price at which the stock had first been offered in 2000. In December 2017, the corporate headquarters moved to Charlotte, North Carolina. Winston-Salem kept most operational departments and the Krispy Kreme Support Center.

  In 2018, Krispy Kreme acquired the bakery chain Insomnia Cookies at a $175 million enterprise value. Insomnia continues to operate independently. On the 25th of August 2020, the first Krispy Kreme vending machine launched in North Carolina, offering 3-packs of doughnuts around the clock. In 2022, the company adopted a hub and spoke model to reach more access points, such as convenience stores, grocery stores and McDonald's restaurants. By the end of 2023, its doughnuts were sold at 14,000 different points. Meanwhile, in May 2021, Krispy Kreme confidentially filed for an initial public offering, and on the 1st of July 2021 it went public again on the Nasdaq as Krispy Kreme Inc.

  On the 26th of March 2024, Krispy Kreme and McDonald's announced a partnership to roll doughnuts out to all McDonald's locations nationwide by the end of 2026. It followed a successful test in Kentucky. Pittsburgh and Columbus, Ohio, were selling the doughnuts at McDonald's by the end of 2024. By June 2025, Krispy Kreme announced the partnership would end, citing "unsustainable operating costs" and insufficient demand. Also in 2024, Krispy Kreme sold a majority stake in Insomnia Cookies to Verlinvest and Mistral Equity Partners at a $350 million enterprise value, double the 2018 figure.

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• 7. Around The World

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  The first Krispy Kreme store outside North America opened in Penrith, part of metropolitan Sydney in Australia. The second international store opened inside Harrods department store in London, and it closed in June 2011. By 2018, the United Kingdom had over 100 standalone stores and a presence in 500 Tesco stores. On the 2nd of December 2015, the company opened its largest UK store, in Glasgow, Scotland.

  In South Korea, the first store opened on the 16th of December 2004. The 100th store opened exactly ten years later, on the 16th of December 2014. In India, the first store opened in Bangalore on the 19th of January 2013, run by Citymax Hotels India under a franchise arrangement. A Chennai shop followed on the 23rd of July 2014, at Express Avenue mall. In August 2011, the Japanese operation planned to grow from 21 stores to 94, and the Mexican operation announced plans to grow from 58 to 128 within five years.

  On the 25th of September 2013, Krispy Kreme announced 25 stores within five years in Colombia, its first South American country. On the 18th of May 2015, it signed a development agreement to open 31 shops in South Africa over five years, its first venture into Africa. The first South African store opened in Rosebank, Johannesburg, on the 25th of November 2015.

  Not every opening lasted. The first Bangladesh store opened in Banani, Dhaka, on the 5th of May 2016, and the company quietly left the country around 2020. By contrast, the store that opened in Dublin, Ireland, on the 26th of September 2018 has since become the most profitable store worldwide. In December 2023, the first Paris store was expected to make 45,000 doughnuts per day, and the menu was tweaked for French customers with a gingerbread flavored doughnut. The company opened its first Moroccan store on the 9th of August 2024 and its first Brazilian store on the 29th of April 2025. On the 17th of November 2025, it opened its first store in Tashkent, Uzbekistan.

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• 8. Flavors And Flashpoints

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  On the 19th of February 2007, Krispy Kreme began selling a Whole Wheat Glazed doughnut for health-conscious customers. It had nearly the same calories as the original glazed, 180 against 190, but more fiber, 2 grams against 0.5. By January 2008, every Krispy Kreme doughnut had 0.5 of a gram of trans fat or less. A federal labeling rule allowed rounding, and the company benefited by advertising its doughnuts as trans fat-free, with "0 grams trans fat!"

  On the 1st of July 2010, Krispy Kreme introduced a doughnut made with the soft drink Cheerwine, sold in grocery stores in North and South Carolina during July. It proved so popular that the Salisbury, North Carolina, location, in the town where Cheerwine is made, kept selling it. After the 31st of July, that was the only place to get one. The Cheerwine Kreme doughnut returned in July 2011 and debuted in Tennessee and Roanoke, Virginia. Later flavors tied the brand to other names, including Jelly Belly jelly beans in 2017 and Reese's doughnuts in August 2019.

  In January 2021, during Veganuary, Krispy Kreme UK launched its Original Glazed vegan doughnut, and three more vegan flavors followed in December. In 2024, the Dolly Southern Sweets Doughnuts Collection offered four limited-time flavors, including Dolly Dazzler and Banana Puddin' Pie. Inspired by Dolly Parton, they were the company's first flavors inspired by a celebrity.

  Promotions have ranged from the everyday to the extravagant. Since 1955, Krispy Kreme has offered fundraising kits, and it splits the proceeds from each box sold with the organization. In 2006, it moved into television and radio advertising with its "Share the Love" campaign of heart-shaped doughnuts. In 2014, it released a $1,685 doughnut for The Children's Trust. It was covered in 24-karat gold, decorated with edible diamonds and filled with Dom Pérignon champagne jelly.

  In March 2021, Krispy Kreme announced a free Original Glazed doughnut every day, except Thanksgiving Day and Christmas Day, for the rest of the year. It was offered to US customers who could prove they had received a COVID-19 vaccine. Multiple physicians criticized the move. Former Baltimore health commissioner Leana Wen tweeted that someone eating a doughnut daily without other lifestyle changes could gain 15 pounds by year's end. Nutrition therapist Elyse Resch replied that weight stigma and fat-shaming are forms of oppression, and that everyone deserves satisfaction in eating. Krispy Kreme said its doughnuts are "an occasional indulgence best enjoyed in moderation."

  In February 2015, a branch in Kingston upon Hull, England, announced "Krispy Kreme Klub Wednesday" for the school half-term break, an event where children could decorate doughnuts. Facebook promotion called it "KKK Wednesday," an abbreviation shared with the Ku Klux Klan, an American white supremacist terrorist group. Krispy Kreme promptly apologized, canceled the event, pulled all related marketing and launched an internal investigation.

  In 2016, the company committed to sourcing 100% cage-free eggs in the US by 2021 and globally by 2026. In 2024, it stated that it had reached the goal in its US operations. Supply constraints from avian flu led it to review the timing of the global goal, and it said it would set a new target once the supply chain stabilizes.

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