How a CEO Almost Killed a $Billion Company - A Case Study For Entrepreneurs

This week the Biz Doc chews on Krispy Kreme - the famous doughnut company that has had some ups and downs - but a final recovery led to a 1.35 Billion dollar acquisition!

There are 4 lessons along the way for ANY entrepreneur!

Grab your notebook, take notes and if you see something interesting, please leave a comment or share the video on social media along with your thoughts – join the conversation.

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About the Biz Doc:
THOMAS N. ELLSWORTH, is an experienced CEO / COO and veteran entrepreneur. He has been disrupting industries and driving consumer shifts through Venture-backed companies in technology, software development, publishing and mobile that have generated exits totaling over $1B.

Connect with Tom at:

[peccatumDei]

As a consumer, it seems to me that selling in supermarkets, convenience stores, etc., stabbed the franchisees in the back. All the franchise locations in my area closed soon after, and have never reopened.

[gumie]

Here's where Krispy Kreme really went down from someone that used to be married to a manager there. It was their expansion into the grocery stores. They made a deal that whatever didn't sell would be returned to the store for full credit. Also, the doughnuts that you get in the store are what you get a the grocery store. My wife made them at the store for shipment. But a lot of the grocery stores would make their own doughnuts and they would stick the KK in the corner so they wouldn't sell better then the grocery store's own brands. Thus the stores were forced to take back hundreds of boxes of unsold doughnuts that they would then throw away. Also, giving a a hot doughnut to everyone for free was a dumb idea. They should've had a sample size because most people would get a free doughnut for the whole family and then leave without ever buying anything. It was clear that the top brass didn't know what they were doing and the company went from riding high, to down in the dumps. They closed all the locations in my area and for awhile the stock was worthless. It was a sad time.

[TheLawnCareNut]

The biggest problem KK has now is their horrible coffee. You cannot sell donuts, especially up north, when you have terrible coffee. It's that simple.

[Skrinklewink]

This is like being at school, learning useless information that's actually somewhat captivating.

[omkardubey]

Don't do it for the money, money is temporary, customers are for ever. Nice

[ernieestrada]

"Is there anything donuts can't do?"--- Homer Simpson

[chrisguevara]

The first rule should always be:. Don't go public, unless you're cashing out.

[tyrosales]

Even though I grew up with American culture, I do appreciate that you are considerate enough of your global audience to help explain some of the cultural references you make.

[Smoothbluehero]

I try my best to avoid buying krispy kreme. I can't control myself, I bought a six pack and ate it all in one day. Too much sugary bread makes me depressed. I have no choice but to place a complete moratorium on kk.

[doggies.will.be.doggies]

Biz Doc....you are the undisputed CHAMP of business case studies and every single one is extremely well researched & impeccably presented. I applaud you for it.

[ekigz]

I'm curious on the net profit for 2012? "What accounting things? " Please clarify.

[hyperbolicx]

Great video. I used to be a District Manager for a large automotive manufacturer and they would continually hold "CHANNEL STUFFING" events with the objective of selling parts to parts managers. Those parts may or may not have been fast moving parts but inevitably what would happen is the dealers would end up with a large amount of "obsolete" parts in their inventory and be forced to either write them off or sell them for pennies on the dollar. That company ultimately claimed bankruptcy and taxpayers paid for some of it. Channel stuffing is poison and a desperate attempt by managers who aren't creative enough to either market their current products or develop new products that customers want to buy.

[treystills]

Dunkin Donuts must have really good coffee (I'm not a coffee drinker) because their donuts taste like 3 day old mega grocery store chain generic dry mouth crumbling circles. How is DD in business? KK is by far superior donut.

[nyekomimi]

I just wanted to say one big "Thank you" for actually explaining what Krispy Kreme is so international audience can understand entire video, rather than assume everyone knows it. (Got this one from autoplay)

[busyrand]

Well done! Really enjoyed how thorough this was.

[jakesynapse]

As someone who's managed a fast food franchise, I have no idea how stuffing the channel is supposed to work, even in a best case scenario. Even in the short term it throws your money earner's out in the field under the bus; and then rolls over with you behind in the next quarter/year...

Awesome Case Study as always!

[umoramayori]

People don't realize, or seem to forget that Krispy Kreme started as a packaged product company first, and has maintained doing so the entire time.

[Dodehak]

Dont know how I came across your videos but the way you talk about all this financial and investment stuff u make it fun and interesting keep up the good work. We need more channels like yours that actually makes learning fun.

[HelloAgentJay]

I love these Case Studies! Could we get one for Chick-Fil-A in the future please?

[JanetWilliams]

I'm a North Carolina native and was living and working in the UK when they opened their first Krispy Kreme shops near me. I totally flipped out and and was so proud to see our little local brand "going international." My co-workers would bring in one and two boxes per week to share around. They took off like a rocket! Now I'm back in the US and still take the time to go visit a KK, just to watch the doughnuts travel down the line and come out so warm and delicious on the other end. Once a year, I even eat one! (Or two. Oh dear. Making myself crave those delicious little treats. Yikes!) Anyway, great lessons in this story. Thanks for sharing!