Case Number: 5-109-007, Year Published: 2009
HBS Number: KEL454
Franchisor, Franchise System Growth, Franchisee, Hot Original Glazed Doughnut, Scott Livengood, Growth, Restating Financial Statements
The case depicts Krispy Kreme’s franchise system growth and decline as a lesson to entrepreneurs running a company as a franchisor. Burton D. Cohen, retired senior vice president and chief franchise officer for McDonald’s Corporation from 1980 to 1999, explains the strengths and weaknesses in Krispy Kreme’s franchising strategy during the period from 1997 to 2006. Areas examined in the case include: franchisee agreements, accounting practices, volatility in stock valuation, franchise system growth, franchise ownership structure, product distribution strategy, and commissary growth. The case depicts how Krispy Kreme started and how it ended up in a low point.
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