Krispy Kreme Doughnuts has said that its wholly-owned subsidiary, Krispy Kreme Doughnut Corporation, has terminated the franchise licenses of its financially troubled Southern California franchisee, Great Circle Family Foods, LLC (Great Circle).

In a statement, the company said Great Circle has been in default of its franchise agreements as a result of non-payment of royalty and brand fund fees.

“Krispy Kreme Doughnut Corporation provided Great Circle with notice of the default in payments and an opportunity to cure. However, Great Circle has refused to cure the default and continues to refuse to make the royalty payments and brand fund contributions required under the franchise agreements,” the statement said.

Great Circle currently operates 28 Krispy Kreme locations in the Southern California area.