The Real Reason Your Local Krispy Kreme May Soon Close

Krispy Kreme has been serving up warm, glazed donuts for over 75 years, according to their website. Its doors first opened in North Carolina in 1937, when Vernon Rudolph began baking donuts using a secret yeast-raised recipe. He cut out a hole in one of the store's walls so that he could serve fresh donuts directly to customers passing by, which led to lines down the street. Its popularity exploded, and today, Krispy Kreme has over 700 locations across the world, serving up a variety of donuts and coffee.

Krispy Kreme's signature neon sign is a staple at most stores and usually indicates fresh, hot donuts are ready to buy, perfect for late-night cravings or a sweet start to your morning. Unfortunately, that glowing neon sign may not be visible in your neighborhood for much longer — Krispy Kreme recently announced that it will be closing several stores nationwide.

Lower profits leads to closing stores

On August 17, Krispy Kreme's CEO, Michael J. Tattersfield announced that Krispy Kreme would be reexamining its business model and closing several locations due to underperformance and slowed profits, reports Food Business News.

Krispy Kreme currently operates on a hub-and-spoke model. One store is the "hub" and receives most items in a shipment, while the other "spoke" stores get their products from the hub to distribute (via Bizfluent). Hubs can operate without spokes, although these are the stores that will likely be closing — they reportedly grew 5% slower than hubs that operate with spokes.

Joshua Charlesworth, COO and CFO of Krispy Kreme, said that of the 118 hubs-without-spokes locations nationwide, 10 will be closing in the coming months, per Food Business News. Though the company has yet to announce which stores will be shutting their doors, it did state that the stores have been underperforming — so if you notice your local Krispy Kreme looking emptier than usual, stock up on sweets while you can.