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I. (Time Context) KRISPY KREME DOUGHNUT Krispy Kreme is an international chain of doughnut stores that was founded by Vernon Rudolph in 1937 in Winston-Salem. North Carolina, United Slates. The parent company is Krispy Kremc Doughnuts. Inc. (NYSE: KKD). which is based in Winston-Salem. While selling assorted types of doughnuts. Krispy Kreme's signature item is a glazed doughnut that is traditionally served warm. Products are sold in Krispy Kreme stores, grocery stores, convenience stores, gas stations. Wal-Man 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 in Australia carry Krispy Kreme. In the United Kingdom Tesco supermarkets. Tesco Extra and most service stations carry Krispy Kreme products. The company's growth was steady prior to its initial public offering but profits have decreased in recent quarters. However, new branches have opened in downtown Philadelphia and other locations.

BUSINESS OPERATION We generate revenues from three distinct sources: stores we operate. which we refer to as Company Stores; development and franchise fees and royalties from our franchise stores. which we refer to as Franchise: and a vertically integrated supply chain. which we refer to as KK Supply Chain. Company Stores. Franchise and KK Supply Chain comprise our three reportable segments under generally accepted accounting principles t"GAAP").

INTERNATIONAL OPERATIONS The first Krispy 'Creme store to open outside North America was in Penrith. Australia. in Sydney. At lint the operation was successful. opening 53 other stores around the country However as of November 1,2010 the entire Australian division went into voluntary administration. with media reports attributing this to poor sales.Thcy have since come out of administration as of December 2010, and continued trading, with fewer stores. Besides the stores that Krispy Krcmc operate in the United States and Canada, there are also locations in the United Kingdom. Australia. Lebanon. Turkey. Dominican Republic. Kuwait. Mexico. Puerto Rico. South Korea. Malaysia. Thailand, Indonesia, the Philippines, Japan, China, the United Arab Emirates. Qatar. Saudi Arabia. Bahrainilong Kong (2006-20081. andEthiopia. In August 2011. Krispy !Creme's Japan operation planned to increase the number of stores from 21 to 94. and its Mexico operation announced the number of stores would increase from 58 to 128 in five years. In the United Kingdom Krispy Kreme continues its expansion and has plans and funding in place to open further stores in 2012. 1|Page

FRANCHISEE EXPANSION AND REDUCTION New england In 2002. Krispy Kreme opened its second store in New England in Newington. Connecticut. What followed was a period of aggressive expansion throughout the region: this included a Krispy Kreme at the Prudential Center in Boston. Massachusetts. which opened on April 15. 2004 and closed sixteen months later. Initially fueled by hype surrounding the opening of Krispy Kreme in New England. this regional expansion was followed by the closing of all but one store. at the Mohegan Sun casino in Uncasville. In January 2010 the Milford store, the first to open in the region, closed after a long decline in patronage. Some say that Krispy Kreme's coffee "left many locals unimpressed. a modal sin in the joe-loving . Krispy Kreme also opened one store in Cranston. Rhode Lsland in May 2003. It is now closed after receiving initial fanfare. This may be due to dominance of Dunkin' Donuts in the state Arizona Krispy Kreme reentered the Arizona market when a new franchise reopened its East Mesa. Arizona. location on May 13. 2008. This location was purchased by Krispy Kreme after Rigel closed it in 2006. The new franchise owner. Dan Minton. plans to eventually open four to five factory stares in the Phoenix market. These stores arc planned to support 10 to IS smaller nonfactory stores that will only sell doughnuts and other products. Texas In 2002. Krispy Kreme opened a restaurant style store in the Amarillo area in Texas. Many thought that the local doughnut store was the reason the national chain closed. but this was not the case. The Amarillo Krispy Kreme closed on July 17. 2005. Another Krispy Kreme closed in Round Rock in 2009. However shop 251 in Grapevine is still open. as well as two shops in El Paso. Most recently Krispy Krone closed the Corpus Christi location. California In January 2006. Krispy Kreme terminated the donut license of Great Circle Family Foods LLC. alleging non-payment of required fees. Al the time, they were one of the largest franchisees, operating 28 stores in Southern California. Preceding this action was a financial dispute by Great Circle. culminating in their September lawsuit filed against Krispy Kreme. The lawsuit was settled in July 2006 and led to the reinstatement of Great Circle's license. On August 22. 2007. Great Circle Family Foods and some of its wholly owned subsidiaries filed for Bankruptcy. Great Circle enx..bsd from on July 6. 2009. and currently operates I I stores in Southern California. Nevada After opening to great hype in 2000. the franchise in Reno closed suddenly on May 15. 2008. Without warning, employees were greeted with a sign an the door that morning saying we apologize for any inconvenience." Rising fuel costs were cited as the primary reason for the closure. 2|Page

Puerto Rico On May 6, 2008. the first store in Puerto Rico opened, followed by two additional locations in 2010 and one additional location in 2011. Canada The 18 stores which opened in Canada, out of 32 planned. have been reduced to four. Two of thaw exist in Quebec lin Longucuil and Quebec City) while the other two stores are in Mississauga. Ontario andDelta. British Columbia. A small seasonal store was recently opened in Wasaga Beach. Ontario.The Wasaga Beach location receives its doughnuts from the Mississauga store every morning. Another small store recently opened on November 3. 2010 in Toronto at Bathurst and Harbonl Streets in the city's Harbonl Village neighbishuod. This store receives shipments from the Mississauga store. Krispy Kreme's Canadian assets were put up for sale in 2005 seven weeks after the U.S.based doughnut company had the firm that owns and operates stores in Canada placed under bankruptcy protection. The Canadian operations are managed under the franchisee Krispy K Canada Company of Mississauga. Ontario. Philippines In November 2006, Krispy !Creme opened the flagship store in the Philippines. These stores are franchise owned like many othen.The development deal for the franchise is awarded to the Real American Donut Company. Inc.. a company owned and operated by the principals of Max's Restaurant. The original franchise agreement is for 30 stores over the next five years.The flagship store was officially opened on November 30. 2006. at the Bonifacio High Street in Fort Bonifacio. Taguig City. The second store was opened on December 21. 2006 at SM Megamall in Mandaluyong City. The third store was opened on June 28. 2007 at Greenhills Shopping Center in San Juan City, it is the first Krispy Kreme drive-thin outlet in Asia and the first free-standing store in the Philippines. Branches in SM Mall of Asia and Trinoma opened October 2007. Three more branches opened in 2008 at Robinson Galleria in Quezon City. Another factory and drivethou store in SM Mall of Asia in Pasay City, the 9th store opened in Gateway Mall. Araneta Center. and a 10th in Glorietta 4. Makati City. There are also four branches located in the provinces with one branch at Marquee Mall in Angeles City, Pampanga. two branches at Ayala Center Cebu and Asiatown IT Park in Cebu City, and one branch at SM City Davao. Davao City. Japan Krispy Krum Doughnuts Japan operates 27 shops throughout the country.

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HISTORY Although Krispy Kreme (KKD) is perceived as a North Carolina institution, its origins are in Louisiana and Kentucky. The founder of Krispy Kreme, Vernon Randolph, worked at his uncle’s shop in Paducah, Kentucky, when the uncle purchased a secret recipe for making doughnuts from someone in Lake Charles, Louisiana. After working for his uncle, Vernon took the recipe to Nashville, Tennessee, to be part of a startup operation. After a relatively short time, Vernon sold his interest in the Nashville store and opened the first Krispy Kreme operation in Winston-Salem, North Carolina, in 1937. Initially, the company sold its doughnuts to local grocery stores. However, Vernon quickly realized that a direct market existed and began selling his hot glazed doughnuts to customers coming to the Winston-Salem location. As a result of the initial success in North Carolina, Krispy Kreme began expanding throughout the Southeast. With expansion in the 1950s, the process of making doughnuts was transformed to an entirely mechanized process with the introduction of an automatic dough cutter. A further change was introduced in 1962 when an extrusion process replacing cutting. In 1976, KKD became a wholly owned subsidiary of Beatrice Foods. However, in 1982, a group of franchisees dissatisfied with Krispy Kreme being part of a large organization purchased the business back from Beatrice. Krispy Kreme spent the rest of the 1980s expanding and strengthening its position in the southeastern United States. As the stock market soared in the late 1990s, the idea of going public intrigued the Krispy Kreme management. In 2000, Krispy Kreme was very successful in raising significant capital with its initial public offering. At first, the shares of stock were traded on the NASDAQ using the ticker symbol KREM. Since May 17, 2001, Krispy Kreme has been listed on the New York Stock exchange under the current symbol, KKD. After going public, Krispy Kreme went through a period of rapid expansion both domestically and, to some degree, internationally. The stock price quadrupled and opportunities appeared to prove endless. The hot sugar-glazed Krispy Kreme doughnut had a mystique associated with it. Krispy Kreme became a hot brand. Investors pursued exclusive franchising rights to open stores in various parts of the country. A franchise producing high-quality southern-style doughnuts freshly baked in an observable oven was a concept that generated great interest. Opportunities for this hot brand seemed endless. KKD opened its first store in Canada in 2001. By 2004 Krispy Kreme was also operating stores in Australia and South Korea. The year 2004 began a period of steep decline for Krispy Kreme. Early that year, Krispy Kreme announced that it had missed its quarterly earnings forecast and posted its first loss ever. The company blamed a diet-conscious public pursuing the lowcarbohydrate Atkins diet for its problems. The stock price plunged from $40 per share to under $10. Since 2005, Krispy Kreme has gone through a period of contraction. In Arizona and New Mexico, the main franchisee filed for bankruptcy closing all the Krispy Kreme stores. In 2008, another franchisee opened some stores in those states. In 2006, Krispy Kreme terminated the franchise license of Great Circle Family Foods that operated 28 4|Page

stores in California. While the dispute was settled, Great Circle filed for Chapter 11 bankruptcy in 2007. Sheetz, a large convenience store chain on the East Coast and one of Krispy Kreme’s largest customers, quit buying doughnuts in 2008 because it decided to open its own kitchen. Finally, international outlets shrunk with stores in Canada and Hong Kong shut down. These trends have impacted the profitability of the company. For the last three fiscal years, KKD has posted an operating loss. Quarterly earnings while mainly negative have been quite erratic. The year 2008 has seen more bad news with all quarterly earnings negative. Exhibits 1 and 2 show both the income statements and balance sheets for the past three fiscal years. In 2006, turnaround artist Stephen Cooper left Krispy Kreme, and Darryl Brewster became CEO. Brewster left the company in early 2008. The CEO position was filled by Jim Morgan, who continues to serve as chairman today. Krispy Kreme, however, continues to experience declining sales in the United States. A more health-conscious public has tended to shy away from glazed doughnuts, which have the perception of too many calories and carbohydrates. In early 2009, Yahoo Finance published a list of 15 firms that have a high probability of going bankrupt during the year. Krispy Kreme was on the list. KKD’s fiscal 2009 year ended on February 1, 2009. On June 5, 2009, KKD reported a 53 percent drop in its firstquarter 2010 earnings to $1.9 million, down from $4 million the prior year. KKD’s revenue decreased 9.9 percent to $93.4 million. KKD’s sales for that first quarter, however, were up 2.1 percent at KKD company-owned stores as opposed to franchised stores. Krispy Kreme needs a clear strategic plan to survive through 2011 and beyond while competing against Dunkin’ Donuts, Starbucks, and even McDonald’s

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II. (View Point) POINT OF VIEW Tony Thompson (C.O.O) I’d like to spend a few minutes discussing our fourth quarter and fiscal 2016 highlights, after which Price will walk you through the financial results in greater detail as well as our financial outlook for fiscal 2017. Then we will wrap up our remarks with a discussion of our plans for fiscal 2017 and beyond. Total revenue increased 4% for the quarter and nearly 6% for the year. Company’s same-store sales increased slightly for the quarter and rose 2.4% for fiscal 2016 marking our seventh consecutive year of same-store sales growth. Domestic franchise comps outpaced company shops increasing 2.5% and 4.8% for the quarter and year respectively. International franchise comps were negative as anticipated given the growth strategy in those markets. We added a net 134 shops during the fiscal year, representing 14% systemwide growth. Our international business led the way with very solid double-digit unit growth and included new country openings in South Africa and Germany. We also signed development agreements for seven new countries including Bangladesh, Cambodia, Guatemala, Panama, Peru, Bolivia and Myanmar. Domestically, we’re growing units at a prudent mid to high single-digit rate as we continue refining and optimizing our domestic operating model. For the year, adjusted earnings per share increased a solid 14%. During fiscal 2016, we made substantial progress in transitioning our discounting program from a heavy reliance on everyday discounts to special events days. In addition, we relied less on three offers to drive traffic. While the overall level of discounting was still higher than we would have preferred and impacted our company store margins. We were able to achieve our goal of having a lower overall percentage of discount transactions. Some of the special events, we focused on during the year were Valentine’s Day, Hero Day, our Birthday, Talk Like A Pirate Day and Day of the Dozens. Also we took advantage of the success of our Carolina Panthers partnership and leveraged that with our Panthers Win Days. In addition to focusing more on special event days, we introduced tiered pricing for our limited time offers. Our Point of View From year 2004 Krispy kreme company already faced a declining stage in their company Krispy Kreme announced that it had missed its quarterly earnings forecast and posted its first loss ever. The company blamed a diet-conscious public pursuing the low carbohydrate Atkins diet for its problems. And in early 2009, Yahoo Finance published a list of 15 firms that have a high probability of going bankrupt during the year. Krispy Kreme was on the list. In the said years, Krispy kreme struggled in finding ways on how they are going to solve these issues, but throughout the years, they have proven that this is just a challenge that they can surpass.

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II. (Statement of the Problem) PROBLEM The primary. and most critical. problem area is the lack of a cohesive marketing structure within or a strategic marketing plan for the organization. Flawed or absent marketing research has resulted in store closings and or expansions that were not backed up by market data or evidence that this investment would be feasible. The company spent very little on advertising. depending largely on word of mouth, and local publicity. Store openings were popular events in the communities. so often newspapers and other media provided free publicity for the events. This strategy seems to still work well for new store openings. but would not be sufficient to generate continuing business. As a result. Krispy Kreme acquired a company in 2007 that by the end of fiscal year 2008. had lost 525 million dollars. The second problem is using a vertically integrated supply chain whereby it manufactured the mixes and the proprietary doughnut-making equipment, as well supplying the coffee for use in their stores. While this KK Manufacturing and Distribution division of Krispy Kreme generally provided substantial revenues and earnings to the business, this too, began to slip along with other revenues. and also contributed to Krispy Kreme's lack of current market data. Analysis of revenues for fiscal year ending February I. 2007, showed KK Manufacturing and Distribution revenues at 5461195. Revenues by feb,3.2008 had dropped to 5429319 Another. perhaps incidental side-effect of this dependence on internal supply chain could be that the "isolation" from outside suppliers prevented an additional source of market information.

CONCLUSION The food industry has been affected by a recent trend toward healthier eating habits. Krispy Kreme has capitalized on this trend by positioning doughnuts as a popular. on-the-go food. Krispy Kreme's success has hinged on consistency throughout its locations and by delivering a high quality product. Future growth opportunities include expanding franchises as wall as penetrating alternate distribution channels. As Krispy Kreme analyzes potential growth opportunities within alternate distribution channels such as convenience stores and grocery chains. it must determine whether doing so will sacrifice brand equity and product quality. Expanding beyond its own stores will require the marketing of the doughnut in a cold format. As analysis has shown, Krispy Kreme's success has come from factors other than the saving temperature of its products. I believe that Krispy Krone can be successful in launching its product in new markets without establishing physical locations. Alternative channel distribution will help bring the Krispy Kreme product to millions of potential customers who have yet to experience the taste of America's best doughnut.

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IV.( Statement of Objectives)

The current company philosophy is geared to continuing making the Krispy Kreme doughnut the centerpiece of the business and to grow that business internationally. It is strongly believed that Krispy Kreme has a unique product, a heated fresh doughnut with a distinctive taste. The mission and values statements are as follows: MISSION : Our mission is to touch and enhance lives through the joy that is Krispy Kreme. VISION : Our vision is to be the worldwide leader in sharing delicious tastes and creating joyful memories. WE BELIEVE... Consumers are our lifeblood, the center of the doughnut There is no substitute for quality in our service to consumers Impeccable presentation is critical wherever Krispy Kreme is sold We must produce a collaborative team effort that is unexcelled We must cast the best possible image in all that we do We must never settle for "second best;" we deliver on our commitments We must coach our team to ever-better results

OBJECTIVES       

To have a better marketing strategy to advertise more the product. To make new research and development for the improvement of doughnuts. To develop new kind of doughnut that is nutritious which is made from vegetables. To earn higher percentage of sales by meeting the demands of the customers. To be able to suggest possible ways on how Krispy Kreme will be able to make their branches adhere with their philosophy as a whole company. To enhance t...