krispy kreme see froggy fresh . krispy kreme doughnuts inc. type private industry restaurant founded july 13 1937 founder vernon rudolph headquarters krispy kreme doughnuts inc. winston salem north carolina 27102 united states number of locations 1003 1 area served australia bahrain bangladesh cambodia canada colombia dominican republic india indonesia japan kuwait malaysia mexico philippines puerto rico qatar russia saudi arabia singapore south africa south korea taiwan thailand turkey united arab emirates united states and united kingdom 1 key people james h. morgan chairman tony thompson president and ceo products baked goods soft drinks hot beverages sandwiches frozen beverages iced beverages revenue us 460.331 million 2014 2 us 435.843 million 2013 2 operating income us 46.57 million 2014 2 us 37.729 million 2013 2 net income us 34.256 million 2014 2 us 20.779 million 2013 2 total assets us 338.546 million 2014 2 us 341.938 million 2013 2 total equity us 265.093 million 2014 2 us 246.432 million 2013 2 number of employees 4300 2014 1 website krispykreme.com krispy kreme doughnuts inc. is an american global doughnut company and coffeehouse chain based in winston salem north carolina . krispy kreme is to become a privately held company owned by jab beech itself a private german investment firm . krispy kreme founder vernon rudolph bought a yeast raised recipe from a new orleans chef and in 1937 rented a building in what is now historic old salem in winston salem and began selling to local grocery stores . 3 in the united states krispy kreme s products are sold via their own outlets as well as through grocery convenience stores supermarkets and temples . they are also available in other countries through various channels . the company s growth was steady prior to its initial public offering but profits have decreased in recent quarters . on february 24 2015 krispy kreme opened its 1 000th shop in kansas city kansas . 4 contents 1 history 1.1 growth 1.2 ipo and accounting scandals 1.3 management shuffle 1.4 new offerings and changes 1.5 international operations 2 retail availability 3 environmental and ethical record 4 see also 5 references 6 external links history edit this section needs additional citations for verification . please help improve this article by adding citations to reliable sources . unsourced material may be challenged and removed . march 2007 learn how and when to remove this template message krispy kreme corporate offices krispy kreme delivery truck circa 1939 krispy kreme doughnuts in 1933 eighteen year old vernon rudolph began working for his uncle ishmael armstrong who owned a small general store in paducah kentucky that sold a wide variety of goods including its very popular doughnuts . 5 while the exact origin of the doughnut recipe remains partially a mystery it is believed that ishmael armstrong was inspired by an ohio river barge cook named joseph lebeouf who was famous for his light and fluffy doughnuts . 5 the store struggled during the great depression so in 1934 vernon and ishmael decided to move to the larger city of nashville tennessee where they hoped business would be better . the uncle and nephew focused solely on selling their doughnuts and opened the krispy kreme doughnut company in a rented store on gallatin road . 5 the shop did so well that vernon s father plumie also left kentucky and moved to nashville to help sell doughnuts . in 1937 vernon rudolph opened his own store deciding on winston salem north carolina for the location when he learned that his favorite cigarette company camel cigarettes was headquartered in the small north carolina city . 5 rudolph primarily sold to convenience stores however he also sold hot doughnuts to individual customers who came during production time between midnight and 4am . 5 the first store in north carolina was located in a rented building on south main street in winston salem in what is now called historic old salem . the krispy kreme logo was designed by benny dinkins a local architect . the first krispy kreme bakery outside the south opened in akron ohio in 1939 . expansion occurred in the 1950s including an early store in savannah georgia . by the 1960s krispy kreme was known throughout the southeast and it began to expand into other areas . in 1976 krispy kreme doughnut corporation became a wholly owned subsidiary of beatrice foods of chicago illinois . the headquarters for krispy kreme remained in winston salem . a group of franchisees purchased the corporation back from beatrice foods in 1982 . in may 2016 jab beech a german investment firm announced it made an offer to purchase the company for 1.35 billion over the following two months that would make the company privately owned . 6 the transaction closed on july 27 2016 . an assortment of doughnuts on display in a shop in washington d.c. krispy kreme in santo domingo dominican republic next to a cinnabon store growth edit play media krispy kreme donuts being prepared high quality krispy kreme began another phase of rapid expansion in the 1990s opening stores outside the southeastern united states where most of their stores were located . then in december 2001 krispy kreme opened its first store outside the u.s. in mississauga ontario canada just outside toronto . 7 ipo and accounting scandals edit on april 5 2000 the corporation went public on the nasdaq at 21 using the ticker symbol krem . 8 on may 17 2001 krispy kreme switched to the new york stock exchange with the ticker symbol kkd which is its current symbol . the stock reached what would be its all time high of 50 on the new york stock exchange in august 2003 a gain of 235 percent 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 from almost 400 stores including international locations . the market initially considered the company as having solid fundamentals adding stores at a rapid clip and showing steadily increasing sales and earnings . 9 since then it had lost 75 80 % of its value by 2005 amid earnings declines as well as an sec investigation over the company s alleged improper accounting practices . 10 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 attributed the poor results to the low carbohydrate diet craze . this explanation was viewed with skepticism by analysts as blaming the atkins diet for disappointing earnings carried a whiff of desperation 9 and as rival donut chain dunkin donuts has not suffered from the low carb trend over the same compared period . 11 analysts suggested that livengood had expanded the chain too rapidly after the ipo which concentrated certain markets with too many stores . 11 while this approach initially grew revenues and profits at the parent company level due to royalty payments from new franchisees which also increased sales this reduced the profitability of individual franchisees in the long run as they were forced to compete with one another . for the 2003 04 fiscal year while the parent enjoyed a 15 percent increase in second quarter revenues same store sales increased only a tenth of a percent during that time . by contrast mcdonald s focused on profitability at the franchise level . krispy kreme also had supermarkets and gas stations carry their donuts which soon contributed up to half of the chain s sales creating further market saturation as well as increasing competition to its franchisees . all this expansion devalued krispy kreme brand s novelty by making the once specialty donuts ubiquitous particularly as the newer sales outlets required pre made donuts as opposed to the ones made fresh in factory stores which alienated brand devotees . 9 besides royalty payments from new stores the parent company also enjoyed significant profits by requiring franchisees to purchase mix and doughnut making equipment from the parent s krispy kreme manufacturing and distribution kkm & d division . kkm & d earned 152.7 million in 2003 which made up 31 percent of sales with a reported operating margin of 20 percent or higher but these mark ups were largely at the expense of its franchisees . by comparison rival chain dunkin donuts generally avoids selling equipment or materials to its franchisees which keeps company and franchisee interests aligned as well as having a royalty stream based on same store sales . 9 krispy kreme has been accused of channel stuffing by franchisees whose stores reportedly received twice their regular shipments in the final weeks of a quarter so that headquarters could make its numbers . 9 the company was also dogged by questionable transactions and self dealing accusations over the buybacks of franchisees including those operated by company insiders . 11 a report released in august 2005 singled out then ceo scott livengood and then coo john w. tate to blame for the accounting scandals although it did not find that the executives committed intentional fraud . 12 on march 4 2009 the sec issued a cease and desist order against krispy kreme for its actions inflating their revenues and engaging in illicit activities regarding the purchasing of its own stores to prop up revenues and setting up mechanisms to guarantee it beat earnings estimates by 0.01 which eventually resulted in krispy kreme reducing net income over 2 years of over 10.5 million . in it it proposed remedial actions for krispy kreme to take . 13 management shuffle edit on january 18 2005 krispy kreme announced stephen cooper chairman of financial consulting group kroll zolfo cooper llc as interim ceo succeeding scott livengood who retired as chairman president ceo and a director . the company also named steven panagos a managing director of kroll zolfo as president and coo . 14 a turnaround plan in december 2005 aimed to close unprofitable stores in order to avoid bankruptcy . 9 15 new offerings and changes edit in 2003 a pilot project in mountain view california to sell doughnuts through car windows and sunroofs at a busy intersection with wireless payment failed . although based on informal advertising such as word of mouth in 2006 krispy kreme moved into television and radio advertisements beginning with its share the love campaign with heart shaped doughnuts . 16 on february 19 2007 krispy kreme began selling the whole wheat glazed doughnut in an attempt to appeal to the health conscious . the doughnut has 84 kj 20 kilocalories in most countries or 20 calories in the us fewer than the original glazed 754 kj vs. 837 kj and contains more fiber 2 grams vs. 0.5 grams . as of january 2008 the trans fat content of all krispy kreme doughnuts was reduced to 0.5 of a gram or less . the u.s. food and drug administration in its guidelines allows companies to round down to 0 g in its nutrition facts label even if the food contains as much as 0.5 of a gram per serving . krispy kreme benefited from this regulatory rule in its subsequent advertising campaign touting its doughnuts as trans fat free and having 0 grams trans fat . 17 on july 1 2010 krispy kreme introduced a doughnut that included the soft drink cheerwine which was to be sold in grocery stores in north and south carolina during july . 18 the doughnuts proved so popular the salisbury north carolina krispy kreme location the town where cheerwine is made sold them as well . 19 after july 31 this was the only place to get them . 20 the cheerwine kreme doughnut returned for july 2011 and made its debut in tennessee and roanoke virginia . 21 also in 2010 krispy kreme express a delivery service for businesses began testing at the battleground avenue location