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Krispy Kreme Doughnuts, Inc. (KKD) is an exclusive brand that offers doughnuts, beverages, collectibles, and franchise opportunities. It started as a small bakery in Winston Salem, North Carolina on July 13, 1937; and has evolved into a publicly traded firm boasting 395 retail stores and over three million dollars in sales (second quarter 2010). This was not always the case however, by the end of 2004, the economy began to slow. This caused businesses in competition with Krispy Kreme to flood their market hindering plans that Krispy Kreme had of expansion. Eventually they would have to scale back due to declining sales. Consumer interest in low carbohydrate diets such as the “Atkins” and “South Beach” diet plans are somewhat to blamed for these declines in sales. KKD’s total revenues hasn’t been steady since 2005, it has gone from the five million dollar range at the close of 2006 to the four million dollar range at the close of 2007. This decline in sales was followed by a system wide decrease in retail stores. KKD’s retail operation was cut down from 433 stores at the end of 2005 to 395 stores at the end of 2007. However, this didn’t mean the end for KKD because the fast food restaurant industry that KKD competes in has experienced an ever-increasing growth during the last twenty years. This trend is expected to continue because of the percentage of Americans who work more and eat less home cooked meals keeps increasing. KKD executives believe that the key to improving the firm’s performance and increasing industry growth is to increase the number of stores that operated by franchising.
Within KKD’s industry their leading competitors are Dunkin Donuts, with sales of $2.7 billion (2002) 5200 outlets worldwide and a forty five percent market share, and Tim Horton’s, which is a Canadian based company that has expanded into U.S. markets. Tim Horton’s sales in 2002 in

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