Krispy Kreme announced yesterday that an independent law firm concluded that no one in the company engaged in any misconduct related to the company’s acquisition of a Michigan franchise. Krispy Kreme has been under investigation by the SEC for its franchise buyback procedures and accounting, as well as its earnings outlook. The company also faces shareholder claims. Although the company released a statement regarding the Michigan franchise, it continues to review other errors and adjustments related to accounting franchise buybacks in Michigan and northern California.
Krispy Kreme posted a $3 million loss in the third quarter of 2004 and recently stated that it would close a $4.6 million doughnut plant in northeast Ohio as a result of oversupply problems.
Posted by franchiselawblog at December 17, 2004 05:26 PM