Krispy Kreme Announces Stores Featuring New Doughnut Technology, Store Design and Beverage Program

Krispy Kreme Doughnuts, Inc. announced the location of three new outlets that will be used to test the Company's new Hot Doughnut Machine technology as well as introduce a new store design that has been developed to reflect and enhance the brand's core values. In addition, these stores will feature Krispy Kreme's new expanded beverage program.

The new stores testing the Hot Doughnut Machine technology are scheduled to open in Winston-Salem, North Carolina, near the Company's corporate headquarters, in mid November; and in Greensboro and Charlotte, North Carolina by the end of the year. These test stores will allow Krispy Kreme to further understand and refine the Hot Doughnut Machine technology. If the tests are successful, the Company has the potential to substantially increase the number of Krispy Kreme stores and hot doughnut experiences available to customers. Stores that utilize the Hot Doughnut Machine technology will complement, not replace traditional factory stores. This technology provides Krispy Kreme with the versatility to enter market areas which before were not practical, including certain urban locations, smaller markets, and confined locations such as airports and malls.

The new look that has been developed for Krispy Kreme stores combines historical references such as copies of 50-year-old company posters (which are archived in the Smithsonian Institution) with modern elements including stainless steel and light woods. In its totality, the design celebrates Krispy Kreme's long heritage while also creating a warm, inviting and updated environment. Colorful menu boards and employee uniforms complement the decor.

Krispy Kreme's expanded beverage program will feature three drip coffees ranging from light and smooth to deeper, more intense blends. It will also include espresso beverages, frozen coffee beverages, and other frozen beverages prepared with a variety of proprietary flavors. In addition, there will be a line of flavored milks. These new beverages will be featured in the Hot Doughnut Machine test stores and also in the new factory store in Issaquah, Washington, just outside of Seattle, which is currently scheduled to open on October 30, 2001. After further testing and refinement, the Company will begin a rollout of the expanded line of beverages in all Krispy Kreme stores.

The 64-year-old North Carolina-based company is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates 196 stores in 31 states.