During the difficult times of the Depression era, several North Carolina entrepreneurs pooled together their limited resources to form businesses, such as Texas Pete, that fostered the state’s economic success in the twentieth century. Vernon Rudolph and his Krispy Kreme doughnuts are excellent examples of the entrepreneurial spirit that flourished in North Carolina despite the Great Depression.
In 1933, Rudolph purchased a secret recipe for yeast-raised doughnuts from a New Orleans-French chef and opened a doughnut shop in Paducah, Kentucky. Rudolph soon moved to Winston-Salem, NC, (some say Camel cigarettes attracted him to the city) where he opened the first Krispy Kreme on July 13, 1937. From a rented building in what is now Historic Old Salem, Rudolph baked his Krispy Kreme doughnuts and sold them to local grocery stores. It was not long before the sweet smell of baking doughnuts attracted customers directly to Rudolph’s store. Envisioning a potential business opportunity, Rudolph cut a hole in the wall of his bakery and began to sell the hot doughnuts directly to customers.
As Krispy Kreme doughnuts’ popularity grew in the 1940s and 1950s, Rudolph opened more stores across the Carolinas and other southeastern states. Each store made their doughnuts from scratch, and that caused too much variation in the doughnuts for Rudolph’s taste. In an innovative move to increase consistency, Krispy Kreme opened its own mix plant that delivered the same dry dough to each of its stores. Krispy Kreme subsequently created its own doughnut making machinery that mechanized everything from cooking to glazing and thereby improved the efficiency and quality of the doughnuts.
During the 1960s the signature appearance of Krispy Kreme stores also became more standardized with its green tile roofs and its “heritage road sign.” These signature features helped brand the Krispy Kreme chain as stores opened outside of the southeastern region. Vernon Rudolph passed away in 1973 with apparently no estate planning, and his family was forced to sell Krispy Kreme. After the company was reorganized, Beatrice Foods Company purchased the firm in 1976. Many early franchisees were disappointed with changes Beatrice made to the franchise. Beatrice Food leadership had changed the sign and even the secret recipe to make production cheaper. Led by Joe McAleer, the early franchisees purchased Krispy Kreme in 1982 and returned the firm to an independent status. McAleer immediately reverted back to the original doughnut recipe and the classic road sign.
By 1999, Krispy Kreme had expanded nation-wide with stores from New York City to California. The company went public in April 2000 and expanded internationally in 2001 with a store in Canada. Today, Krispy Kreme operates over 500 stores in the United States, the District of Columbia, Australia, Bahrain, Canada, Indonesia, Japan, Kuwait, Lebanon, Mexico, the Philippines, Puerto Rico, Qatar, Saudi Arabia, South Korea, the United Arab Emirates, and the United Kingdom. Majority of these Krispy Kreme stores are owned by local franchisees. Krispy Kreme also places a high priority on community service and offers multiple fundraising plans for non-profits, schools, and community groups.
Andy Serwer, “The Hole Story How Krispy Kreme became the hottest brand in America” Fortune Magazine (7 July 2003) http://money.cnn.com/magazines/fortune/fortune_archive/2003/07/07/345535/index.htm (accessed January 1, 2010); “Krispy Kreme Doughnuts, Inc.—Company History” http://www.fundinguniverse.com/company-histories/Krispy-Kreme-Doughnuts-Inc-Company-History.html; Sheridan Hill, “The Dough Boys” Business North Carolina (August 1, 1994) http://www.thefreelibrary.com/The+dough+boys.-a016146820 (accessed January 11, 2010); “History” http://www.krispykreme.com/history.html# (accessed January 11, 2010)