Krispy Kreme files for Chapter 11 (CNBC)

[doxieone]

No link yet.

Edit: I can't find anything yet. Still on the lookout!

EDIT: Link.

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38642.3507057176-846374436&siteID=mktw&scid=0&doctype=806&

[Cassandra]

1. Major overexpansion, I would say.

Too much yeast, perhaps?
I feel a bit sorry for the franchisees.

[Richard Steele]

62. They bit off more than they could chew?

I love Krispy Kremes, but they seem to be much
better at making doughnuts than they are at
running a large national corporation.

Their franchise expansion was just "too much, too soon".

Kinda reminds me of alot of the tech companies that
came and went during the "Internet Bubble".
They have a great product, and an assload of cash from the ISO...
and it all swirled down the toilet for lack of a good Business Plan.

[HereSince1628]

2. Wow, what went way up looks to be about to come down!

Not long ago KK was everyone's darling.

[bbernardini]

3. I've always preferred Dunkin' Donuts anyway. n/t

[notadmblnd]

4. don't care for dunkin's donuts

but their coffee can't be beat. It's also the only place you can get a decent roasted garlic bagel.

[displacedtexan]

6. Me, too.

Krispy Kremes are too greasy for me.

[HereSince1628]

10. I have to admit I like dunkin donuts, but I've never had a Krispy Kreme.

Too expensive for an educator's salary

[skids]

24. Gave up on Dunkin...

...when they stopped making "cruellers" and started making "sticks." Or whatever they decided to call them after they became too lazy to twist two pieces of dough together and elected instead to squeeze them straight from a tube.

[shrike]

44. Me, too

Buttermilk donuts are the best. Too bad I am no longer in my 20s, when I could eat such things with impunity.

[One_Life_To_Give]

47. DD lost it

Dunkin Donuts lost it when they switched from Local Baking.
Other than their coffee, it's no longer worth stopping there.

[Dervill Crow]

54. I haven't seen a Dunkin' Donuts in a couple of years.

Their donuts can't be beat. The one in my neighborhood changed to "Dippin' Donuts" shortly after Krispy Kreme moved into our area. The promise of a trip to Dunkin' got my kids through many a church service with a minimum of noise and fidgeting.

:donut:

[The HL]

5. It was all just a bunch of hype.

I never understood what all the fuss was about. They were clearly not as good as Dunkin Donuts, but they had a huge PR campaign as well as big advertising. I remember DJs on all the radio stations hyping them. It just goes to show, you cant fool all the people all the time.

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[LostinVA]

8. Absolutely not true

I've lived in NJ and in NC, and Dunkin' Donuts are the BEST cake doughnuts, and KK are the BEST yeast ones. The family got made a mistake by getting greedy and : expanding too fast, selling them in grocery stores (KK's claim to fame is the "Hot" sign outside stores), and putting the price up too much. It hurt the qua;lity of the product, as well as its branding. Big mistake. Too bad... KKs got me through alot of studying in college in the 80's....

[Rich Hunt]

27. that's true

I think Krispy Kreme probably just overextended themselves. They're just more popular in some areas than in others.

[ChairmanAgnostic]

29. their 7 corporate jets had nothing to do with it.

YES, they had leases or owned majority shares in 7 corporate jets at one time, misusing corporate financing and income to party hearty.

Ah hubris - it always hurts the little guys - like the investors and franchise owners.

[trogdor]

45. I wonder what kind of golden parachute their execs have.

How much money do they get to cart away when they abandon ship?

[ChairmanAgnostic]

52. the silly boys who burned through millions of assets in two years?

you think they planned ahead of time? doubtful. What will be interesting is the last grasping of assets at the very end in an effort to survive at the expense of the corperation - now, there is where litigation thrives.

[B3Nut]

9. I vastly preferred KK to DD...

Last Dunkin Donuts places I went to were when I lived in Battle Creek MI...the franchise there was *horrid*. The donuts were always stale-tasting and the coffee was not attended to properly. Far cry from the DD I used to frequent when I lived in Roanoke VA, much better.

The Krispy Kreme over in Brookfield WI I stop at when I'm in the Milwaukee area is wonderful...good donuts and killer coffee (except for one evening when an employee who obviously didn't give a damn about the quality was making the coffee).

Todd in Beerbratistan

[Inland]

63. I think you'll find DD greatly improved.

The coffee is especially good.

[Dover]

30. I remember the hype too. Lots and lots of coverage from every quarter

including all the news channels. I kept scratching my head thinking....what in the world is all the excitement about a doughnut?
And why is that newsworthy?

Never have had a KK....and in truth haven't had a doughnut for many years. But I think I'm safe in assuming that most doughnuts are good, and I doubt they can be 'improved' so much that they warrant all the attention KK got. I asked someone who had a box of KK near their office desk if they were all they were cracked up to be. The guy said 'no way....just another doughnut'.

The KK story seems a bit suspicious to me.

[meg]

38. They failed in Austin in their first store on Burnet Rd

at the Corner of Anderson Rd. I remember the hype about watching dough nuts through the process etc. This store did not last long. Then, a few years later, they opened 'the first Krispy Kreme store ever in Austin!'

What about the first one? The one that failed?

[Bernardo de La Paz]

7. Such dramatic stock rise & fall: investigate for culture of corruption

Follow the money.

Who did they donate to?
Did the executives get big interest free loans and other corrupt nonsense while small investors get bilked?

[Spinzonner]

11. Looks like they got themselves into a hole

[Binka]

14. A Donut Hole? n/t

[swimboy]

12. Noooooooooooooooooo!!!!!!!

The hot ones are singular in their insidious goodness and the Pumpkin Spice doughnuts are The Shit!

[underpants]

13. HAhahhahaha Spoken like a true _________er

We called Krispy Kremes "Band donuts" because they used to sell them as a fundraiser for our high school band. They also used to be sold by people in the median strip at stoplights. I never understood what the big facination was with them.

[geomon666]

58. I second that!

[Scurrilous]

15. Where's a cop...

...when you need one?

Krispy Kreme affiliate files for bankruptcy

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-17T123003Z_01_WEN1169_RTRIDST_0_LEISURE-KRISPYKREME-URGENT.XML

<snip>

"Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) said on Monday that a majority owned affiliate and franchisee partner in the Philadelphia region filed for Chapter 11 bankruptcy protection.

Krispy Kreme, still grappling with an accounting investigation that prompted it to restate earnings over several years, said it agreed to provide funding to Freedom Rings LLC during the restructuring process."

[Binka]

17. WTF? Freedom Rings LLC? This dude is a crook!

http://www.areadeveloper.us/mudco/speakers.shtml#rfiorentino

A first class con man. Actually the whole lot of them are. Ugly bunch of people as well. Blech!

[sendero]

16. I don't eat donuts..

... but both my wife and my ex wife have told me that KK donuts are crap and they don't know where this "greatest donut" stuff came from.

I think KK is running up against the same problem the Bush** administraton is. PR bullshit will get you the votes, but at some point you have to actually perform. :)

[Pryderi]

18. I like Dunkin' Donuts better than KK. I don't like my intestines glazed

[TheFarseer]

19. I've never had a better glazed donut that KK

They were too expensive for me but if someone brought them to work, you couldn't keep me away with a cattle prod. I've never had a dunkin doughnut.

[Freddie Stubbs]

20. Reuters: Krispy Kreme affiliate files for bankruptcy

CHICAGO, Oct 17 (Reuters) - Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) said on Monday that a majority-owned affiliate and franchisee partner in the Philadelphia region filed for Chapter 11 bankruptcy protection, sending the doughnut company's stock down 18 percent.

Krispy Kreme, still grappling with an accounting investigation that prompted it to restate earnings over several years, said it agreed to provide funding to Freedom Rings LLC during the restructuring process.

Freedom Rings operates six stores in the Philadelphia region, a Krispy Kreme representative said. The parent company has about 360 stores and 50 satellites in 45 U.S. states.

Krispy Kreme had expected the joint venture to open 16 stores in Philadelphia, New Jersey and Delaware, according to a March 2001 statement.

more: http://today.reuters.com/investing/financeArticle.aspx?type=hotStocksNews&storyID=URI:urn:newsml:reuters.com:20051017:MTFH82416_2005-10-17_12-49-33_N17196065:1

[TrueAmerican]

21. Like someone said they are overexposed

We used to stop at the only KK between Santa Maria and Los Angeles on our trips to Anaheim. But that was more to do with the novelety of getting the donuts onec in awhile. When they started putting them into gas stations and grocery stores it became overkill. KK is okay for a once in awhile treat. Not everyday.

[gristy]

22. stock down 12% to 4.86 in pre-market trading; down from 50 two years ago

www.finance.yahoo.com/q/bc?s=KKD&t=my

What a mess. Should it have been obvious?

[brainshrub]

23. I love KK donuts.

Reading this makes me want to go out and buy a dozen. Yum.

I think the owners got greedy.

[Bridget Burke]

25. I prefer Shipley's Donuts.

Based in Houston. And their kolaches are pretty good, too.

[malmapus]

26. Wow George, really strong economy you got here

:sarcasm:

[ckramer]

28. Stop eating donuts people, it makes you fat ;)

Seriously, too much donuts is not good for you.

[B3Nut]

33. But you have to treat yourself

once in awhile....it's good for the soul. :)

If you eat a bunch every day, you'll pay for it. But once in a blue moon doesn't hurt anything, ya gotta have some guilty pleasures! :D

Todd in Beerbratistan

[AlCzervik]

31. Victim of it's own success look like. I hope they can reorg and start

over again.

[BrightKnight]

61. Another Red company with accounting irregularities

"...it continues to face a federal accounting probe and shareholder lawsuits. The SEC investigation centers around Krispy Kreme's accounting for franchise buybacks and its earnings outlooks. The company recently disclosed accounting irregularities involving payments for the purchase of franchises as compensation to their owners, or failing to label as revenue some franchise fees that were paid with money that came from the parent company. The class-action suit accuses Livengood and other officers of knowingly filing false financial reports..."

http://www.investorguide.com/stock-archives.cgi?date=011805
---------

"Principals of Largest Franchise Group File Suit against Krispy Kreme Doughnut Corporation; Southern California Owners are Third Group to Seek Damages from Krispy Kreme for Alleged Fraudulent Activities”

https://us.etrade.com/e/t/invest/story?ID=STORYID%3Detrade_2005_09_29_eng-etrade_cbs2_market_watch_eng-etrade_cbs2_market_watch_BD75F302-92E0-4854-9158-DFE0A584A10B&provider=BusinessWire
-----

They brought in a new CEO to deal with their financial issues. They chose Stephen Cooper from Enron.

[merwin]

32. So I assume they have the same responsibilities as a consumer

under the new Bankruptcy laws... and have to pay back most of their debts.

[nothingshocksmeanymore]

34. The donut business is the most notorius money laundering gig there is

Really hard for a donut shop to go broke

[Missy M]

35. I'm not a big donut fan but I do love Krispy Kreme glazed donuts....

they are light and don't leave a big lump in the stomach!!! It is not Krispy Kreme filing Chapter 11 but a franchisee unit.

[RagingInMiami]

36. KK glazed and rasperry donuts are much better than Dunkin donuts

But even then, I would only eat them on a rare occassion. Man doesn't live on donuts alone.

But now they're going out of biz, I think I will run out and get some, just for old times sake.

[LibDemAlways]

37. A couple of years ago the LA Dodgers had

a promotion with KK that if a Home Game was a no-hitter, every ticket holder could get a free half-dozen KK donuts.

My brother and I happened to attend a no-hitter and stopped by KK on the way home. Of course, we weren't alone. The line went out the door.

The employees were so snotty to the ticket holders it was unbelievable. They'd hand out the free donuts to one person about every 5 - 10 minutes - literally shoving the box at them - and harrassing them for not being "paying customers."

Some suits at the top had come up with this giveaway as a PR move, and it backfired horribly when the franchisee - rather than turn it into an opportunity for people to sample the product and ultimately increase sales - behaved as though the ticket holders were coming in to rob the store.

[DiverDave]

39. I used to deliver the supplies to DD

you dont want to eat there, trust me.

The coffee is good though.

KK Glazed are the best. Warm...YUM

[William Bloode]

40. Sad news i reckon.

I love KK, but then again i am North Carolinian and we have always had KK, we are their home. Thats what is available in all the stores, and shops. There is little competion( no one can compete here it's ingrained in the mind).

All that being said i never saw all the hype either, as it is just a donut. The only thing that makes them special is they are so light, soft and airy. But JEEBUS the price! We are talking $4-5 for a dozen, or 6 filled.

[DS1]

41. I've still yet to see a Krspy Kreme

but then again, in my ultra-biased mind, any company that insists on spelling shit wrong to look cute deserves to be run into the ground.

[Chiyo-chichi]

42. mmmmmmmmmm.... donuts.....

[the other one]

43. TOTAL MISCHARACTERIZATION!!! read---

A krispy creme FRANCHISEE in philadelphia filed for bankruptcy. The parent company will aid in any way it can. The parent company is in no financial trouble.

[GOPisEvil]

46. Exactly. This is a FRANCHISE going belly-up. Sub. line shoud be edited.

Krispy Kreme itself is doing OK.

Although, how shitty do you have to be to lose money making Krispy Kremes?

[doxieone]

53. I tried to change, but can't get access.

[BR_Parkway]

48. No 'overpriced unions' and 'generous healthcare/pensions' to blame?

At least GM has something to distract from it's piss poor management decisions.

[Lilyhoney]

49. Krispy Kreme sucks. So I am not surprised. nt

[EmmaP]

50. Blech.

I never cared for either KK or DD. I always got my donuts from local donut shops...Mighty Fine or Jack Frost...now that's true donut goodness! Mmmmmmmm.

[Dulcinea]

59. Krispy Kremes are vile & disgusting.

They make me queasy.

[meganmonkey]

51. No loss

:shrug:

[Deja Q]

55. more companies will do this, solely to nix pensions & save ceo pay

[Chemical Bill]

56. KK and DD are both GOP moneybags. Buy blue. n/t

[Hardrada]

57. K. Kreme donuts have been driven

from our local Super Target store and have been replaced by Archer Family ones. My wife won't let me buy donuts since I need to lose some weight. Or chocolate eclairs either.

[Love Bug]

60. They expanded too quickly and their timing was bad

KK went into major expansion during the same time the low-carb craze was in full swing.

[maddezmom]

64. locking

A Krispy Kreme FRANCHISEE in Philly filed for bankruptcy, not the parent company