January 09, 2006
Upon Further Review....
According to this Reuters article, on Thursday January 5, 2006 Krispy Kreme Doughnuts Inc. said it terminated the franchise license of its Southern California franchisee, Great Circle Family Foods, because it was not paying royalties and other fees. Great Circle operates 28 Krispy Kreme outlets in Southern California. On Friday, however, Krispy Kreme announced that it reinstated the franchise license because Great Circle agreed to resume payments. In September, two principals at Great Circle sued Krispy Kreme, accusing the company of overcharging for equipment and supplies and misappropriating franchisee funds. Great Circle’s attorney acknowledged that Great Circle had not been making royalty payments because the company believes Krispy Kreme may owe it money. Krispy Kreme allegedly has refused to provide Great Circle with financial information to determine if money is owed.