US doughnut maker and retailer Krispy Kreme Doughnuts has announced that it has obtained Canadian Court approval to purchase the assets of KremeKo, one of its Canadian franchisees, and will now operate these Canadian operations as a wholly-owned subsidiary.
Since April 2005, KremeKo has been operating under protection of the companies’ creditors arrangement act, the Canadian equivalent of Chapter 11 bankruptcy protection.
“Over the past six months, our Canadian affiliate has made significant progress in reducing costs, increasing efficiencies and improving its overall operating results,” said Steve Cooper, chief executive officer of Krispy Kreme.
“We now have a financially viable business in eastern and central Canada with the potential for solid growth in both the retail and wholesale sides of the business. This restructuring represents an important milestone for Krispy Kreme and we look forward to our continued presence in this market.”
Krispy Kreme anticipates that the purchase transaction will close by the end of the month. The Canadian operations include six retail stores, along with a wholesale operation.