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May 7, 2002

USA: Krispy Kreme enters five new markets, increases store opening guidance for FY03

Winston-Salem, North Carolina-based Krispy Kreme Doughnuts is to expand into five new markets in three states, Texas, Wyoming and Montana, through three established franchisee groups.  KK-TX will be developing stores over the next five years in Lubbock and Amarillo, Texas.  Hal Smith, who is the current Krispy Kreme franchisee for Oklahoma City and Tulsa, Oklahoma, will become managing partner of the new venture. Smith is the former president of Steak & Ale, president/COO of Chili's, and chairman, CEO and president of Chi-Chi's Mexican Restaurants.

Winston-Salem, North Carolina-based Krispy Kreme Doughnuts is to expand into five new markets in three states, Texas, Wyoming and Montana, through three established franchisee groups. 

KK-TX will be developing stores over the next five years in Lubbock and Amarillo, Texas.  Hal Smith, who is the current Krispy Kreme franchisee for Oklahoma City and Tulsa, Oklahoma, will become managing partner of the new venture. Smith is the former president of Steak & Ale, president/COO of Chili’s, and chairman, CEO and president of Chi-Chi’s Mexican Restaurants.

His company, Hal Smith Restaurant Group, operates 26 full service restaurants across six separate concepts in six states. Krispy Kreme will retain about 33% of the new venture.

Rigel Corporation, led by Jim Morrissey and John Chisholm, has agreed to develop stores in El Paso, Texas. Rigel Corporation is also the current Krispy Kreme franchisee for Phoenix and Tucson, Arizona, and Albuquerque, New Mexico. Rigel has operated a number of restaurant concepts including Godfather’s Pizza, KFC and Bruegger’s Bagels. Krispy Kreme will retain about 40% of this new joint venture.

L&L Enterprise Holdings will develop stores in Montana and Wyoming. Lincoln Spoor is the current franchisee for Reno and Las Vegas, Nevada, Salt Lake City, Utah and Boise, Idaho.  Under this existing agreement, L&L has successfully developed stores in Las Vegas, Salt Lake City and Reno. Krispy Kreme will retain approximately 33% of this new venture.

Scott Livengood, Krispy Kreme chairman, president and CEO, commented: “We are excited to enter these new markets with partners who already understand our brand.”

Separately, Livengood added: “We expect to see increasing store opening momentum over the course of this year. As a result, we are increasing our projection of new store openings for the current fiscal year from 59 new stores to 62 new stores.”

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