Krispy Kreme Doughnuts, Inc. (NYSE: KKD) announced today the acquisition of the Charleston, South Carolina market. The Company will purchase the rights to this market from an associate franchisee who currently operates two factory stores in that market. The Company did not disclose the purchase price but did indicate it expects the acquisition to be modestly accretive to earnings in the current fiscal year. Krispy Kreme will open a new store in the market on July 24, 2001 located at 1489 Savannah Highway, complete with the signature doughnut making theater.

Scott Livengood, the Company's Chairman, CEO and President said, "We are very excited about this acquisition. Charleston marks the second step in a series of franchise repurchases. In April, we repurchased the Savannah, Georgia market. We will evaluate the market for both retention as a company- owned operation and for refranchising to an area developer partner. For now, we will keep our options open, but would expect under any scenario to retain a significant share of this market."

Livengood also added, "This market, like Savannah, has been a special part of the Krispy Kreme family and heritage for over 30 years. We look forward to an even closer relationship with both our customers and the Krispy Kreme employees of Charleston."

The 63-year old North Carolina-based company is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates 185 stores in 30 states.

Krispy Kreme can be found on the World Wide Web at www.krispykreme.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Krispy Kreme's operating results, performance or financial condition are its dependence on franchisees to execute its store expansion strategy, supply issues, competition and numerous other factors discussed in Krispy Kreme's periodic reports, proxy statement and other information statements filed with the Securities and Exchange Commission.