Krispy Kreme site still up for sale
Published on August 16th, 2006
WOBURN - More than seven months after Krispy Kreme officially withdrew from the former Registry of Motor Vehicles site in East Woburn, the property is still for sale.
Local attorney Joseph Tarby, who represents New England Dough, which formerly held the franchise rights to Krispy Kreme in the area, said he has received a number of inquiries about the property, which is located off Hill Street near Route I-93.
"I've gotten calls, because it's such a great location right off the highway, but the property is still on the market," said Tarby.
New England Dough, which also holds franchise rights to two other restaurant chains, including Burger King, could also conceivably retain the site, but one of the reasons why the City Council denied a special permit request for a Krispy Kreme in 2005 was traffic, which presumably would not improve if a Burger King was present on the former Registry site.
New England Dough officials have also said in the past that the site is not large enough to accommodate a full-service restaurant. Rhode Island-based Jan Co., New England Dough's parent firm, bought the parcel at an auction in 2004.
New England Dough appealed the council's denial, but eventually withdrew its court action in January after the North Carolina-based parent company pulled its franchise rights to the area. Closed were four of the eight Krispy Kreme stores in Massachusetts - including the heralded outlet at Wellington Circle in Medford - which culinary experts blamed on a combination of the trend toward consuming less carbohydrates and stiff competition from Dunkin' Donuts, a New England institution.
The company's problems aren't limited to New England, however, as this week stores were closed in Buffalo, N.Y., and Clayton, Mo.
The parent company also underwent some financial difficulties. By fall of 2004, the Securities and Exchange Commission announced it was looking into some dubious accounting practices at Krispy Kreme.
Amid allegations in a stockholder lawsuit of padded sales figures, the company restated its 2004 earnings and warned investors that it was in danger of defaulting on a $150 million credit line. On the news, the share price tumbled more than 17 percent last January, and on Wednesday was trading at around $8.35 per share.
Last month, Krispy Kreme's lenders agreed to extend the filing deadline for the company's fiscal 2006 annual report by three months to Oct. 31.
Earlier this year, Krispy Kreme said it would delay filing its annual report for the fiscal year ended Jan. 29 because it used accounting resources to prepare its overdue fiscal 2005 annual report. The company filed that in late April, meeting a deadline and averting a delisting from the New York Stock Exchange.
The news hasn't been all bad for Krispy Kreme, however. On Tuesday, the chain's first shop was opened in China, and the franchise rights were awarded for Indonesia, as Krispy Kreme furthers its expansion into the Asian market.
(Material from the Associated Press was used in this report.)
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