Krispy Kreme Reinstates Great Circle’s License

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Krispy Kreme Doughnuts Inc. said on Friday that it reached an agreement with L.A.-based Great Circle Family Foods to reinstate its license, one day after the doughnut chain operator terminated the license of its largest franchisee.


The agreement reinstates all franchise agreements and the notice of termination is withdrawn, said Winston-Salem, N.C.-based Krispy Kreme. Shipments of ingredients will resume immediately so Great Circle can continue to operate its 28 stores. The franchisee employs nearly 750 people in Southern California.


“Southern California customers can rest assured that their favorite doughnuts Krispy Kreme will be rolling off our conveyors without interruption,” said Richard Reinis, chief executive of Great Circle, in a statement.


On Thursday, Krispy Kreme said it ended the license because Great Circle refused to make royalty payments and contributions to a marketing and advertising fund. Termination of the franchise license meant that Great Circle could no longer operate its stores as Krispy Kreme outlets.


Two principals in Great Circle, Richard Reinis and Roger Glickman, sued Krispy Kreme in September, claiming executives misappropriated marketing funds and billed them for fake charges. Reinis and Glickman also claimed that the chain was trying to force them into bankruptcy, made false representations, inflated prices and engaged in deceptive business practices.

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