Krispy Kreme-SEC

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Krispy Kreme says it's under what it calls an "informal, nonpublic inquiry" by the Securities and Exchange Commission.

The North Carolina-based firm recently blamed its first quarterly loss on the low-carb dieting phenomenon.

In a statement, the firm says it's cooperating fully with the SEC. The firm says the inquiry is focused on its franchise reacquisition and its guidance on a reduction in earnings.

In May, Krispy Kreme, with restaurants in Alabama, reported that it lost $24 million in the first quarter, its first quarterly loss since going public in 2000.

Shortly before that, the doughnut maker says it was cutting profit projections for this year by 10 percent because of lower demand for its high-calorie treats, which is due in part to the low-carb diet phenomenon. Extended Web Coverage

Krispy Kreme History

  • In 1933, Vernon Rudolph, the founder of Krispy Kreme, bought a doughnut shop in Paducah, Kentucky.

  • He moved the operations to Nashville, Tennessee, where other members of the Rudolph family joined the business and opened shops in Charleston, West Virginia, and Atlanta, Georgia.

  • At first, the business was primarily delivery-selling doughnuts to local grocery stores.

  • 1937, Rudolph and two others decided to leave Nashville to open their own doughnut shop.

  • The three partners used their last $25 to rent a building across from Salem College and Academy in what is now called historic Old Salem.

  • With too little money left to buy ingredients, Rudolph convinced a local grocer to lend them what they needed in return for payment once the first doughnuts were sold.

  • People began stopping by the shop to ask if they could buy hot doughnuts. The demand was so great that Rudolph opened the shop for retail business by cutting a hole in the shop's wall so he could sell the doughnuts.

  • Krispy Kreme is best known for its fresh, glazed, yeast-raised doughnuts, "Krispy Kreme Original Glazed."

  • Krispy Kreme also makes more than a dozen other varieties of yeast-raised and cake doughnuts, real fruit pies, cinnamon buns and several varieties of snack foods.

Source: A collection of web reports contributed to this report.