Two weeks ago, the franchisee owner of Krispy Kreme Doughnuts for the Phoenix area, Rigel Corporation, abruptly closed all eight of its Arizona stores. Rigel had filed chapter 11 bankruptcy protection two days before it shut its doors. Kripsy Kreme, the parent corporation, would like to reopen the stores as quickly as possible but that might take some time if the stores are tied up in bankruptcy.

Krispy Kreme's problems are not unexpected. The parent company has stumbled in the last few years, having lost $198 million in 2005, and is still in a precarious position. Lenders have given it an extension until October 31, 2006 to file its financial statements. The company is moving ahead with its foreign expansion with nine stores currently operating in South Korea and a new store opening in Hong Kong in August 2006. However, it doesn't look good for the US stores; the turnaround specialist brought in to save the company quit in March 2006. If the fat lady isn't quite singing yet, she's walking onto the stage.

John Laub is the Chairman of the CEO-CFO Group.

1. "Krispy Kreme closes its stores. Doughnut chain shuts down all 8 Valley locations."
Erica Sagon. The Arizona Republic. August.12, 2006..

2. "Krispy Kreme stores close in Arizona." John Yantis. Tribune. August 12, 2006.