Krispy Kreme Coming Here

May 13, 2002
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GRAND RAPIDS — Planning commissioners got their first taste of a new Krispy Kreme site plan last week, as the famous doughnut-maker wants to locate its first area store on the northeast corner of the East Beltline and 28th Street SE.

The 4,200-square-foot store would be built on a CenterPointe Mall out-lot, near Toys-R-Us and on the parcel that previously held a Bank One branch. An average of 75,000 vehicles drive through the intersection each day, which is set to undergo some lane-widening work soon.

Dough-Re-Mi LLC, a Toledo, Ohio-based partnership, is bringing Krispy Kreme here. The firm owns the exclusive franchise rights for Krispy Kreme in Michigan and Ohio, and has stores in Dearborn Heights, Warren, Livonia, Roseville and Toledo. The Dearborn Heights store was the first to open in Michigan in November 1998.

“We’re excited about bringing the first Krispy Kreme to West Michigan and about giving area residents the opportunity to have the Krispy Kreme experience,” said Joe Nachtrab, president of Dough-Re-Mi.

Besides the East Beltline location, Dough-Re-Mi also is reportedly looking at locations on Alpine Avenue in Walker and on 28th Street SW near U.S. 131 in Wyoming. Last fall, the firm leased nearly 20,000 square feet in Detroit for a bakery to supply Krispy Kreme doughnuts to more than 400 grocery and convenience stores in the metro area.

Grubb & Ellis/Paramount Properties is the local commercial real estate firm handling the transaction. Bill Bussey, who heads the firm’s retail division, told the Business Journal that when he first approached the company about coming here they declined, because they felt the city was too small.

“But over a period of six months we sent them demographics and said Starbucks is here and here is how they’re doing,” said Bussey. “Finally, they said if they’re here maybe we should look at the market.”

The store should open next fall, offer a drive-thru and a seating area, and will employ 75 full- and part-time workers. The doughnuts will be baked and sold at the store, which expects to serve 10,000 customers each week.

Integrated Architecture is designing the store. CenterPointe Mall owns the property.

Krispy Kreme makes 5 million doughnuts daily, or nearly 2 billion doughnuts a year.

Each of its 222 company-owned stores and franchises produces from 4,000 to 10,000 dozen doughnuts daily. The company’s key product is its Hot Original Glazed doughnut.

Store sales have grown by 9.7 percent, 14.1 percent and 17.1 percent for the past three fiscal years. For FY 2002, system-wide sales topped $620 million, up almost 39 percent from the previous fiscal year. Net income for FY 2002 reached $26 million, up 79 percent from FY2001.

Vernon Rudolph started selling Krispy Kreme to grocery stores in Winston-Salem, N.C., in 1937 after he bought a doughnut recipe from a French chef in New Orleans. Rudolph died in 1973 and three years later the firm was sold to the Beatrice Foods Co. In 1982, a small group of Krispy Kreme associates bought the company from Beatrice Foods. The firm went public in April 2000 and opened its first international store near Toronto last December.

Krispy Kreme is located in all the country’s major markets and company executives are currently working on a franchise strategy to put stores in the nation’s smaller cities.

“The doughnuts melt in your mouth,” said Bussey, a Georgia native who is familiar with Krispy Kremes. “And they’ve developed a cult-like following.”           

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