Krispy Kreme Doughnut Corporation (KKDC) has agreed to reinstate its Southern California franchise, Great Circle Family Foods’, licenses, effective immediately.

The company, a wholly-owned subsidiary of Krispy Kreme Doughnuts Inc, terminated Great Circle’s franchise rights for failure to pay certain royalty and brand fund payments on 5 January 2006, as reported by just-food.

Krispy Kreme also filed a lawsuit in North Carolina to stop Great Circle from using the Krispy Kreme trademarks and confidential information following the termination of its franchise rights. After a judge entered a temporary restraining order, Great Circle agreed to remit the past due royalty and brand fund fees that triggered the termination and to pay such fees on a timely basis going forward. KKDC will now resume product shipments to Great Circle – who remain indebted to KKDC for other amounts due under its franchise agreements.

Great Circle is Krispy Kreme’s largest franchisee and currently operates 28 Krispy Kreme locations in the Southern California area.