Krispy Kreme Introduces New Store Concept in Arizona Market

Chain responds to demand, first time Krispy Kreme opens three new stores on same day

PHOENIX, Oct. 9 /PRNewswire/ -- Krispy Kreme is evolving its store concept to better compete in today's market with the "neighborhood doughnut shop," first being introduced in the Arizona market on Oct. 9, 2008. Also, for the first time in history, the company is opening three stores on the same day to meet Arizona market demand.

Krispy Kreme made its return to Arizona in May 2008 after a two-year absence and its signature factory store located in Mesa, Ariz., has exceeded all expectations.

"Some might ask why we're introducing a new concept with the Mesa store being so successful, but it's all about responding to customers needs," said Dan Brinton, Arizona franchise partner.

The Krispy Kreme Mesa store features the company's signature doughnut-making machine capable of producing more than 200 dozen doughnuts an hour - all within sight of customers through the glass viewing area. At this rate, it can produce approximately 60,000 doughnuts per day and 400,000 doughnuts per week, making it possible to service the neighborhood doughnut shops.

Each new Krispy Kreme location will have doughnuts delivered fresh multiple times throughout the day from the Mesa factory store. The new Krispy Kreme locations will offer 15 varieties of doughnuts, including Krispy Kreme's signature Original Glazed doughnut. The stores also will feature Krispy Kreme's Signature Coffee line that features two drip coffees - Smooth and Robust Decaf -- all made from high-quality coffee beans roasted by Krispy Kreme's own Roastmaster to exact specifications. Customers can also enjoy Krispy Kreme Chillers and Shamrock Farms mmmmilk with their doughnuts.

"We've had customers visiting the new store locations to check them out prior to opening and everyone is receptive to the concept. Each store is distinctly Krispy Kreme and provides consumers with what matters most - the best-tasting doughnuts around," said Brinton.

The three new neighborhood stores officially opened to the public on Thursday, Oct. 9 with a "Glazed Treasure Hunt" planned for the community. The grand opening combines the "treasured" doughnuts with the popular family activity of geocaching. Individuals and teams have the opportunity to find one of 20 buried "glazed treasures" - featuring a year supply of doughnuts, year supply of coffee and coupons for free Shamrock Farms single-serve mmmmilk - in the Phoenix Metro Area and northern Arizona.

    The three store locations are:

    620 E. Roosevelt St., Phoenix, AZ 85004 (lobby and drive thru)
    2747 E. Indian School Rd., Phoenix, AZ 85016 (lobby)
    12629 N. Paradise Village Parkway West, Phoenix, AZ 85032 (double drive
    thru and walk-up)

"Krispy Kreme is not only working hard, but working smart, to become the nation's neighborhood doughnut shop once again. We've learned from past expansions and are confident in our product, our brand and our new approach to meeting consumer demand," added Brinton.

Depending upon the success of the new store concept, Krispy Kreme Corporate plans to rollout similar style neighborhood doughnut shops in markets across the country.

About Krispy Kreme

Krispy Kreme is a leading branded specialty retailer of premium quality sweet treats, including its signature hot Original Glazed(R) doughnut. Headquartered in Winston-Salem, NC, the company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Krispy Kreme is proud that for decades its Fundraising program has helped non-profit organizations raise millions of dollars in needed funds. Today, Krispy Kreme and its one-of-a-kind Hot Light can be found in approximately 500 locations around the world. Visit us at www.KrispyKreme.com.

Information contained in this press release, other than historical information, should be considered forward-looking. Forward-looking statements are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Krispy Kreme's operating results, performance or financial condition are the outcome of pending governmental investigations, including by the Securities and Exchange Commission (the "SEC") and the United States Attorney's Office for the Southern District of New York; potential indemnification obligations and limitations of our director and officer liability insurance; the quality of Company and franchise store operations; our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans; our relationships with our franchisees; our ability to implement our international growth strategy; our ability to implement our new domestic operating model and refranchising strategy; currency, economic, political and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients; compliance with government regulations relating to food products and franchising; our relationships with wholesale customers; our ability to protect our trademarks; risks associated with our high levels of indebtedness; restrictions on our operations and compliance with covenants contained in our secured credit facilities; changes in customer preferences and perceptions; significant changes in our management; risks associated with competition; and other factors discussed in Krispy Kreme's Annual Report on Form 10-K for fiscal 2008 and other periodic reports filed with the SEC.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Krispy Kreme Doughnuts, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.