... Ethics-Krispy Kreme Introduction The purpose of this case study is to analyze the accounting scandal at Krispy Kreme. "The Krispy Kreme story is one of a newly public company, experiencing rapid growth, that failed to meet its accounting and financial reporting obligations to its shareholders and the public,"(as cited in Maremont & Brooks, 2005). The senior managers were the ones who profited from this accounting scandal and the shareholders and the public suffered as a result. There are several prevention methods that can be taken to prevent this from occurring in the future. It will benefit Krispy Kreme to hire internal auditors who can report to management any regulations. Analysis Company Overview Krispy Kreme opened its first store July 13, 1937 in Winston-Salem, NC (Krispy Kreme). According to the Krispy Kreme website, “Vernon Rudolph bought a secret yeast-raised doughnut recipe from a New Orleans French chef, rented a building in what is now historic Old Salem in Winston-Salem, NC, and began selling Krispy Kreme doughnuts to local grocery stores”(Krispy Kreme). Krispy Kreme donuts can be found at many grocery stores with sixty personal stores around the United States. Krispy Kreme offers a fundraiser program for schools and churches. Krispy Kreme has expanded its business internationally “celebrating the 100th shop in Mexico” in 2013 (Krispy Kreme). Accounting Scandal “Former executives at Krispy Kreme Doughnuts Inc. who...
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...Accounting 557 Assignment 1 Student EAS Professor Alfred Greenfield Strayer University 27 October 2013 Many organizations have been in the news over the past few years due to accounting ethical breaches that have affected their customers, employees, and the general public. I searched the Internet to locate a story in the news that depicts an accounting ethical breach. I selected Krispy Kreme. I enjoy their hot donuts and was curious to learn more about how they played with the numbers. For some reason I always want to dig into the trickery behind the manipulation of financial statements. When we get right down to it playing games is what happens. Someone comes along and they think they know something the rest of us are too dumb to know. They think they are special and that God bestowed upon them special powers to get away with something no one else has been able to get away with in the entire history of mankind. I am intrigued with the thought process behind the faces of these people who think they have what it takes to trick the rest of us. I can only think of a few words; hubris, vanity, ego, arrogance and delusional. I do not believe it is truly possible to ever get away with anything. No man has a good enough memory to be a successful liar. Given the corporate ethical breaches in recent times, I will assess whether or not I believe that the current business and regulatory environment is more conducive to ethical behavior. I will say up front that as I start this...
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...hgdsthyjuyktuikthgfhfghnyukmkmyuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuunnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuKrispy Kreme is an international chain of doughnut stores that was founded by VernonRudolph in 1937 in Winston-Salem, North Carolina, United States. The parent company isKrispy Kreme Doughnuts, Inc. (NYSE: KKD), which is based in Winston-Salem.While selling assorted types of doughnuts, Krispy Kremes signature item is a glazed doughnutthat is traditionally served warm.Products are sold in Krispy Kreme stores, grocery stores, convenience stores, gas stations, Wal-Mart and Target stores in the United States. Internationally, Loblaws supermarkets and Petro-Canada gas stations in Canada along with BP Service Stations and BP Travel Centres inAustralia carry Krispy Kreme. In the United Kingdom Tesco supermarkets, Tesco Extra andmost service stations carry Krispy Kreme products.The companys growth was steady prior to its initial public offering but profits have decreased inrecent quarters. However, new branches have opened in downtown Philadelphia and otherlocations.HistoryKrispy Kremes founder Vernon Rudolph and his uncle purchased Joseph LeBeoufs donut shopon Broad Street in Paducah, Kentucky along with a secret recipe for yeast-raised doughnuts in1933 acquired from a Buffalo, New York businessman. Rudolph began selling the yeastdoughnuts in Paducah and delivered them on his bicycle...
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...Journal of Business Case Studies – April 2008 Volume 4, Number 4 Lessons From Krispy Kreme J. Richard Anderson, Stonehill College ABSTRACT The recent decline of Krispy Kreme Doughnuts, Inc. raises a natural question: shouldn’t investors (and auditors) have been more wary of this Wall Street darling? Weren’t there tipoffs that would have allowed investors to avoid another franchisor “crash and burn” situtation like Boston Chicken or TCBY frozen yogurt? This paper traces the meteoric rise and fall of Krispy Kreme and discusses a number of advance indicators of future problems: insider share-dumping, conflicts of interest within the Board of Directors and senior management, turnover in the CFO position, the use of synthetic leases, repurchased franchises, disappointing join venture results, and the problems of earnings management in the quarterly reports of a fairly small publicly-owned business. Keywords: Corporate Financial Reporting, Investor Awareness, Reading Financial Reports INTRODUCTION S hould we be surprised when a Wall Street darling like Krispy Kreme Doughnuts crashes and burns? Shouldn’t there be warning signals when a company ranked as the best IPO of the 2000-02 period with a 711% stock price runup in three years loses all of that appreciation over the next 18 months? What causes a company to go from a market capitalization of just under $3 billion to little more than $300 million in such a short period? This paper argues that there were numerous...
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...Badra October 15, 2009 BUSN 6200 Fall I 2009 Team Andrews KKD Case Analysis TABLE OF CONTENTS I. Introduction .................................................................... 1 II. SWOT Analysis ................................................................ 2 III. Industry Analysis ............................................................. 5 IV. Recommended Strategy ................................................. 10 List of Figures A. Figure 1: Porters Five Forces Model...................................... 6 B. Figure 2: Business Strategies ............................................... 9 BUSN 6200 i Fall I 2009 Team Andrews KKD Case Analysis I. INTRODUCTION Krispy Kreme Doughnuts, Inc. (KKD) is a unique brand offering doughnuts, beverages, collectibles, and franchise opportunities. Pioneered as a small bakery in Winston Salem, North Carolina on July 13, 1937; KKD has evolved into a publicly traded firm boasting 395 retail stores and over four million dollars in sales (second quarter fiscal year 2008). So, why did the firm’s president and chief executive officer Daryl Brewster (pictured right) say “After several quarters of progress on our turnaround, second quarter results [fiscal year 2008] did not meet our expectations.”? His statement is largely due to the significant losses the firm has experienced since fiscal year 2005. KKD’s total revenues sunk from the five million dollar range at...
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...the process. Another aspect of show business is product placements on hit shows like. The Sopranos and Will & Grace and movies like Bruce Almighty. Finally, international expansion is fueled by celebrities like Dick Clark, Hank Aaron, and Jimmy Buffet, who clamored for Krispy Kreme franchises of their own. Krispy Kreme doesn’t just grant franchise rights to anyone. Krispy Kreme makes 65 percent of its revenue selling donuts directly to the public through its 106 company-owned stores. Another 31 percent comes from selling flour mix, donut-making machines, and donut supplies to its 186 franchised stores. The final 4 percent of revenue comes from franchisee licenses and fees. Krispy Kreme is now expanding and selling donuts through convenience stores. Will this hurt the brand? Stan Parker, Krispy Kreme’s senior vice president of marketing, says it won’t because the company continues to emphasize freshness. It replenishes the packaged donuts daily from the local Krispy kreme store and removes any unsold packages. The donuts’ presence in convenience stores will help remind people of the taste of a fresh, hot Krispy Kreme donut, and that brings them back into a Krispy Kreme shop. The success of Krispy Kreme has been a wake-up call for competitor Dunkin’ Donuts, which had become complacent. The one-two punch of...
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...Summarize from Krispy Kreme’s CEO on 19th March 2014 Co-founder of KDN are Mrs. Ausanee Mahagitsiri Leonio and her husband, Mr. Lawrence Leonio. KDN was found in 2009. The head quarter office located at CTI Tower on Ratchadapisek Road. Krispy Kreme use FRESH strategy and now has 11 stores with 21 flavors in Thailand. Mrs. Ausanee has her own inspiration from “The Secret book” that “You are the designer of your destiny. You are the writer who write your story. The pen is your hand and the outcome is whatever that you choose” and she bring this as her passion in term of running business. For my personal opinion, K.Ausanee doesn’t special from another CEOs. I think she just receive both Strategy and powerful branding from Krispy Kreme’s Head Quarter and she also luckily that Krispy Kreme FC who always was the first queue both Paragon and Central Lardpraow branch gave help to set role of the line and told K.Ausanee about what Krispy Kreme FC do in other country (Element of culture) Anyway, I think Krispy Kreme Thailand has very good marketer as I remember that they spend only a year to be number 3 in Thailand Doughnut Market. Since year 2009 until now, Krispy Kreme got many problems from uncontrollable factors such as flood disaster, economic, politic crisis etc. Even K.Ausanee can’t control these uncontrollable factors but she lead Krispy Kreme Thailand to adjust or adapt business itself in a manner consistent with successful outcome. I think many marketing campaign of Krispy Kreme Thailand...
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...Submitted To: Professor Mazen Badra October 15, 2009 BUSN 6200 Fall I 2009 Team Andrews KKD Case Analysis TABLE OF CONTENTS I. II. III. IV. Introduction .................................................................... 1 SWOT Analysis ................................................................ 2 Industry Analysis ............................................................. 5 Recommended Strategy ................................................. 10 List of Figures A. Figure 1: Porters Five Forces Model...................................... 6 B. Figure 2: Business Strategies ............................................... 9 BUSN 6200 i Fall I 2009 Team Andrews KKD Case Analysis I. INTRODUCTION Krispy Kreme Doughnuts, Inc. (KKD) is a unique brand offering doughnuts, beverages, collectibles, and franchise opportunities. Pioneered as a small bakery in Winston Salem, North Carolina on July 13, 1937; KKD has evolved into a publicly traded firm boasting 395 retail stores and over four million dollars in sales (second quarter fiscal year 2008). So, why did the firm’s president and chief executive officer Daryl Brewster (pictured right) say “After several quarters of progress on our turnaround, second quarter results [fiscal year 2008] did not meet our expectations.”? His statement is largely due to the significant losses the firm has experienced since fiscal year 2005. KKD’s total revenues sunk from the five million dollar range at the close of...
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...CASE STUDY OF KRISPY KREME Just like their Donoughts the Krispy Kreme stock seemed irresistible when they went public in 2000. It was even named as IPO of the year and the Forbes named it as the company to look out for. But now it is just a firm with a market capitalization over 300 million. So what did Krispy Kreme did wrong to be in a situation like this. The decline of Krispy Kreme Donoughts Inc. with a market capitalization of over 3 billion to just over 300 million was due to the use of synthetic leases, repurchased franchises, disappointing joint venture results and due to the problems of earnings management. This paper argues that there were numerous warning signals in the doughnut franchisor’s accounting and managerial decisions that investors refused to take seriously as they bid the stock from its IPO price of $6 to its eventual peak of $50 on NYSE. There are lots of lessons that can be learned from this autopsy of the Krispy Kreme and might well make investors and auditors more wary about jumping on the next IPO bandwagon. They bought out a struggling Michigan franchisee and agreed to raise the purchase price from $26 million to $32 million so that the franchisee could afford to close two stores and to settle its overdue debts owed to Krispy Kreme, thus avoiding a bad debt loss. Why would so many large franchisees of a supposedly-successful chain want to get out of their investment when operations seemed to be going so well? As we see in the exhibit...
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...Dunkin’ Donuts: Betting Dollars on Donuts Force 1-Competitiors, Force 2-New Entrants, Force 3-Suppliers, Force 4-Customers, Force 5-Substitutes.” (Exploring Management). According to Porter’s first force, we should take a look at Dunkin’ Donuts competitors. Their top competitor is obviously Starbucks, followed by Krispy Kreme and McDonalds. “But many who have struggled to compete with Starbucks have had to do so with limited resources or only a few franchises. Not so with Dunkin’ Donuts, whose parent brand, Dunkin’ Brands, also owns Baskin-Robbins.” (Exploring Management). Dunkin’ Donuts and Starbucks are in a tough rivalry, but Dunkin’ Donuts is holding their ground and trying to come out victorious. The second Force is based on the new entrants in the coffee and donuts community. This could cause some decline in Dunkin’ Donuts business, but after everything settles in I think that they will continue to be on top and smoke their competition with their uniqueness. As long as their customers are perfedctedsdfasdfsadfasdf, the business owners and employees will be happy. Customers will keep coming back if they have a good experience with this business and they’ll buy more products and recommend them to their friends. Which brings in more money for the happy owners. The fifth and final force are the substitutes used. SUBSTITUTES!“Although Dunkin’ Donuts often partners with a select group of grocery retailers-such as Stop & Shop and Wal-Mart- to create a store-within-a-store...
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...How Life Can Change in a Matter of Seconds It was a cool fall October night and my family had just left church. I had not been feeling well and was not eating much at all. My husband was concerned so he suggested that we go somewhere for a late dinner. After great debate I decided tat the only thing I really wanted was broccoli and cheese soup from Ruby Tuesday’s. My daughter, Holly, was in ill sorts and was fussing about not wanting to go with us which was a very unusual characteristic for her. My aunt told us she would stay at our house with her while we went out to eat. After we had dinner we had to drive across town to pick up some Krispy Kreme doughnuts for my aunt because she was leaving for Gatlinburg, Tennessee with her grandchildren the next morning. We decided that since it was already 9:00 pm we would take the back way home which included riding on dark “country” roads. I was driving as my husband relaxed in the passenger side from over indulgence. We were almost home and we were driving on a curvy road. When we went around a curve it all of a sudden looked like a thousand fireflies were in front of us. I heard my husband exclaim “what in the world and then he screamed look out!” But it was too late because just as I realized it was a truck in our lane with no headlights on and the “fireflies” that I saw were actually the reflection of our lights on his grill we hit head on. I do not know how long it was before I came too from...
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...BACKGROUND OF KRISPY KREME DOUGHNUTS Krispy Kreme Dougnuts was founded on July 13, 1937 in Winston-Salem, North Carolina, United States by Vemon Rudolph. The company became a publicly-traded company in April 2000. Krispy Kreme Doughnuts produces approximately 5.5 million doughnuts a day consisting of 20 varieties. Krispy Kreme Doughnuts serves customers in 395 stores where 40 stores are in the United States and the rest are in 10 foreign countries namely Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico, the Philippines, South Korea and the United Kingdom. 282 stores are owned by franchisees while 113 stores owned by the corporation. THE VISION OF KRISPY KREME DOUGHNUTS Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth. 1) People: Being a great place to work where people are inspired to be the best they can be. 2) Portfolio: Bringing to the world a portfolio of quality doughnuts brand that anticipate and satisfy people's desires and needs. 3) Partners: Nurturing a winning network of customers and suppliers, together we create mutual, enduring value. 4) Planet: Being a responsible citizen that makes a difference by helping build and support sustainable communities. 5) Profit: Maximizing long-term return to shareowners while being mindful of our overall responsibilities. THE MISSION OF KRISPY KREME DOUGHNUTS Our mission declares our purpose as a company....
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...Cultural factors affect waiting lines. For example, fast checkout lines (e.g.,10 items or fewer) are uncommon in Japan. Why do you think so? When Krispy Kreme donuts entered the Japanese market, people were willing to wait in line for up to three hours to get donuts although another brand of donuts was available. I have tried these donuts and agree that they taste really good, however I would not wait in line for up to three hours for them. The Japanese on the other hand, enjoy standing in line. Japanese people are very patient. If there is no line for a product it may be looked upon as unpopular and of no value. Waiting in line is so common in Japan that it is used as a marketing tool; the Japanese may rent persons to stand in line for them when they are physically challenged or just don’t feel like standing in line but want the product being offered. I feel fast checkout lines are uncommon in Japan because the Japanese are patient people and enjoy waiting in line. They take the attitude that anything of value is worth standing in line for. If there is no line, there is no value. An added benefit of standing in line are the conversations between family members and friends and the memories that they make. Kohlbacher, F., & Holtschneider, U. (2008). Tokyo Queues for You. J@Pan Inc, (78), 24-26. Marquand, R., & Staff, w. (2005, September 27). Japanese queue - gladly - for a 35-foot platypus and falafel. Christian Science Monitor. p....
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...fair is to showcase and promote the states agriculture arts, crafts and culture through the annual agriculture fair. The State Fair’s aim is to educate all North Carolinians about the importance of agriculture to our heritage and our economy. The exhibits are antique farm machinery, cultivate a career tent, flower and garden show, heritage circle, and state fair ARK and the village of yesteryear. The completions include general exhibits such as livestock, poultry, rabbits, family and consumer sciences, horses and folk festival. Entertainment includes concerts in Dorton Arena, fireworks, Grand Stand shows, Kiddie fun Park, carnival rides and games. There is also a wide variety of foods ranging from pizzas, funnel cakes, ice cream, Krispy Kreme doughnuts, candy apples and deep fried candies. The antique farm machinery exhibit displays a collection of vintage farm...
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...District Manager for Dunkin Donuts Odera Mogor MGT330: Management for Organizations Professor Jamal Ibrahim December 21, 2015 Introduction With the promotion of being the new District Manager, it is my mission to execute and coordinate business operations to achieve financial goals. I will make sure that business operations are executed in compliance to company standards. Establish a relationship of trustworthiness and effective communication with my staff. I will identify the company’s weaknesses and create a plan of action to remedy them. I will identify and maximize the company’s revenue, while addressing the teams concerns and provided guidance when necessary. I will also be providing my expertise in talent acquisition for the company. It is my responsibility to ensure that all guests are always serviced at a high personalized level, and will make sure that Dunkin Donuts is deeply involved with its communities. “Dunkin’ Brands offers a comprehensive series of award-winning training programs for crew members, managers and franchisees designed to foster deep connections to our brands’ heritage and improve the guest experience and business results at the restaurant level” (Dunkin Brands, 2014). In this paper, I will outline how job design, organizational design, staffing, staff training and performance evaluation are the fundamentals of creating a business that is built to last. Job Design In order for the new Dunkin Donuts to be successful, it is very important to...
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