A Krispy Kreme (KKD) unit filed for Chapter 11 bankruptcy protection as part of an asset sale to another doughnut developer.
Krispy Kreme, the Winston-Salem, N.C., doughnut chain, said the asset sale calls for the so-called area developer for five Western states to take over 12 stores in the northern Midwest. The deal is worth $10 million, Krispy said.
Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana, agreed to buy the assets of Glazed Investments, the Krispy Kreme area developer for Colorado, Minnesota and Wisconsin. The agreement calls for Westward Dough, which already runs 15 stores, to buy the franchise development rights for Colorado, Minnesota and Wisconsin as well.
Glazed Investments filed Chapter 11 Friday so it could conduct the sale under Chapter 11 Section 363 of the bankruptcy code, which permits the assets to be sold free and clear of all liens, claims and encumbrances, Krispy said.
Other qualifying bidders will have an opportunity to submit bids for Glazed Investments through a court-supervised competitive bidding process, Krispy said.
Krispy Kreme currently has a 97% ownership interest in Glazed Investments. Upon completion of Westward Dough's acquisition of Glazed Investments, Krispy Kreme will no longer retain an ownership position.
"We are very excited to have reached an agreement to purchase the Krispy Kreme franchise in Colorado, Minnesota and Wisconsin," said Lincoln Spoor, principal of Westward Dough. "We are pleased with the opportunity to combine Glazed Investment's strengths and best practices with our own, to create a truly great company. The Krispy Kreme brand deserves nothing less."