Krispy Kreme Entrepreneurship

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If you’ve been to anyone of Krispy Kreme’s over 1,000 locations, you’re no stranger to the glowing “Hot Now” sign that can make any car stop in its tracks and turn right around to get a fresh, hot Krispy Kreme doughnut. Since 1937, the brand has been delighting customers with their one-of-a-kind yeast-raised doughnut recipe brought to you by entrepreneur Vernon Rudolph.

A Doughnut, a Dream, and a 1936 Pontiac

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This brand that much of America has now come to know and love started when Vernon Rudolph’s uncle purchased a secret doughnut recipe from a New Orleans chef, Joe LeBeau. While Rudolph’s uncle simply wanted him to sell the doughnuts door-to-door, Rudolph couldn’t help but see the bigger picture and began opening shops with the help of his family members.

In 1937, he settled in Winston-Salem selling doughnuts out of his 1936 Pontiac with two friends and only $25 in his pocket. Although there was no storefront, people smelled the doughnuts around town and came asking to buy what they were making. As demand increased, he found an old facility in Old Salem that he turned into a retail store by cutting a hole in the wall and installing a window.

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A Taste of Innovation

Beginning in the 1940s, the company standardized the product with central manufacturing of the doughnut mixture, distributing to their expanding network of storefronts, and inventing and manufacturing their own machinery to create the doughnuts. This saved them time, space and ingredients. The machines have since been put on display in each shop so customers can see the process of the famous Krispy Kreme doughnuts being made.

The glowing “Hot Now” signs and signature green tile roofs came about in the 1960s as the stores became more visible throughout the southeast.

Moving Forward and Making History

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In 1973, Rudolph passed away and the Krispy Kreme brand was purchased by Beatrice Foods in 1976. However, early franchisees were unimpressed with how it was being run and bought the firm back just six years later.

In the following years, the brand experienced several major milestones. The first location in New York opened in 1996, followed by the first California location in 1999. By 1997, they reached “icon status” and company artifacts were donated to the Smithsonian Institution’s National Museum of American History. As of April 2000, Krispy Kreme became a publicly traded company. One year later, they opened their first location in Toronto, Canada, among 49 other new locations for that year. By 2006, their nearly 400 locations were selling approximately 2.7 billion doughnuts every day.

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The Recipe for Success

Krispy Kreme’s success comes from pure entrepreneurial spirit and a strong ability to remain consistent and relevant in the ever-changing business world. The average lifespan of an S&P 500 company was 33 years in 1965, yet this brand has survived for over 80 years. Krispy Kreme strays away from traditional advertising and relies primarily on word-of-mouth and carefully-timed free samples. Their approach has proven successful, with about 1,000 locations in 29 countries.

The famous “Hot Now” signs contribute to this success in serving as an immediate call to action, tempting passersby with the thought of a fresh, warm doughnut. The brand has even created an app so fans can receive personalized push notifications when their favorite store turns on their sign.

A Franchise Dedicated to Giving Back to its Community

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Krispy Kreme is actively involved in the communities they operate in. They have supported community fundraising since 1955 when they offered the opportunity to buy doughnuts at cost price and sell for a profit, as long as it is for a good cause. They also offer balloons and hats to supplement the doughnuts being sold.

The brand has partnered with former NASCAR driver Kyle Petty and the Victory Junction Camp for the Drive for 45 campaign. This partnership gives customers the chance to donate to Victory Junction, which encourages voluntarism and educates others about what the camp does and how their efforts help the children who participate. Their efforts have since allowed over 700 children to reach beyond their illnesses and attend the camp.

An annual “Cops on Doughnut Shops” fundraiser is held to support the Special Olympics. Police officers sit on rooftops of Krispy Kreme stores and collect donations from the public and customers to raise funding for the Law Enforcement Torch Run and increase awareness of the Special Olympics movement.

The company offers fans another way to engage with the brand through their “Sweet Stops.” Fans can request a visit from the “KK Cruiser” in any of the 48 domestic states of the United States by tweeting #SweetStops and suggesting a location. The account will then randomly message fans back when they plan on stopping at the locations they have suggested.

Krispy Kreme has also worked with United Way of Forsyth County in North Carolina for their annual golf tournament. These efforts have raised over $50,000 annually since the program started.

All of the brand’s community involvement has resulted in Krispy Kreme being labeled in the third tier of “Most Charitable Franchises” by franchisehelp.com.