Krispy Kreme Unveils Smaller Prototype
Krispy Kreme starts construction this month of a new, smaller store concept, breaking ground in Smyrna, Tenn., and Winston-Salem, N.C. The company said franchisees in New York and Phoenix also are opening the smaller stores, and more are expected to follow.

"The economics of these small retail shops are attractive as they are less expensive to open, run and staff," company president James Morgan said in a conference call to analysts in mid-December.

"Supplying (smaller stores) from (a) Krispy Kreme factory store improves the utilization of the factory store and significantly enhances the return on those stores as well," he said.

Other benefits of the smaller stores, he noted, include the ability to put more of them into a market, making it easier for consumers to find and visit them and providing more cost-efficient marketing for store owners. The non-factory stores are called Fresh Shop, Hot Shop or Kiosks depending on size. The most desirable configuration, according to executive vp Douglas Muir, are "multi-tenant end-cap locations with drive-throughs."

The company opened 37 locations in the third quarter, bringing its total stores to 509 in December.