Challenger

I am sure most everyone has experienced the revolutionary beautiful Krispy Kreme doughnut. It lures you in with its soft gentle glaze covering a golden brown shell that is just foreshadowing the fluffy dough that melts in your mouth. It is very hard to find a person who doesn’t like Krispy Kreme doughnuts and the company is well loved by everyone.

It has gained a reputation for being the friendly business next door. Many schools and organizations use Krispy Kreme for fund raising and to help many good causes. The face of the company

has become more familiar by expanding their market to more common places, like covenience stores and supermarkets. But behind all of these positive images something a little less attractive is going on.

The company has recently been in financial trouble which has led to a rough litigation process. Because of a decline in sales and a sorry attempt to keep their edge the company has decided their statements for 2004 aren’t completely accurate. The company now has decided to restate their gross income for the year of 2004. The Securities and Exchange Commission is responsible for the investigation. Between $6.2 and $8.1 million dollars will be cut from what was previously recorded. This scandal will affect many aspects of the company such as their stocks, r elationship with lenders, and consumers. In view of the stock market, earnings per share will drop seven or eight cents. The company can no longer take out loans and it will take a while to get back on their feet. Krispy Kreme blames the problem on low-carb diets and high oil prices but critics say its just bad business. They also say that the company slaughterated thier market by expanding and marking their product available in more places.