22-unit franchisee adds to Krispy's Ch. 11 woes

Nation's Restaurant News,  Sept 17, 2007  

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ST. LOUIS -- Sweet Traditions, a Krispy Kreme Doughnuts franchisee with development rights for Illinois, northwestern Indiana and eastern Missouri, has filed for Chapter 11 bankruptcy protection, less than two weeks after the bankruptcy filing of a California-based franchisee that once was the chain's largest.

Sweet Traditions indicated that it would close about half of its remaining 15 Chicago-area shops and cut about 25 percent of its 500 employees. The company operates two Krispy Kreme outlets in central Illinois and five in the St. Louis area and sells its doughnuts to the Chicago-area Jewel Food Stores.

Sweet Traditions already had closed three Illinois tollway locations. High rent and low foot traffic at tollway units were blamed for the bulk of Sweet Traditions' financial woes.

On Aug. 22, Fullerton, Calif.-based Great Circle Family Foods LLC filed for Chapter 11 bankruptcy reorganization. Its holdings have dwindled to 12 outlets, from 31 in May 2004.

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