Krispy Kreme Doughnuts

Krispy Kreme Doughnuts was founded in 1937 by Vernon Rudolph in Winston-Salem, North Carolina. Rudolph’s doughnut recipe is the subject of much speculation, claiming to have origins in New Orleans with a possible French riverboat chef as the creator. While the details have been lost to time, doughnuts were not a new invention in the 1930s, having already gained popularity in the United States in the 19th century. The Krispy Kreme recipe was a bit ‘unique,’ as it contained yeast. While making yeast doughnuts at home was the norm, as baking turned into a commercial task, cake doughnuts began to become more popular. From its initial debut, Krispy Kreme would utilize both direct sales and distribution as ways to expand its presence. Their doughnuts were easy to find in grocery stores, convenience stores, and other retailers. However, if you wanted the freshest doughnuts possible, you could show up at their bakery, which contained a small storefront. The allure of doughnuts, straight off the line, would eventually lead to the Hot Doughts Now, red neon signs that Krispy Kreme still installs nearly 100 years later. Krispy Kreme’s popularity exploded, and Rudolph soon found himself issuing franchise licenses to help keep up with demand. The chain’s main base would be in the Southeastern United States, with outliers in areas like Akron, Ohio, and Baton Rouge, Louisiana. By the late 1970s, Krispy Kreme would be sold to a conglomerate, Beatrice Foods, which would shortly after grant the first Texas-based Krispy Kreme franchise license.

Krispy Kreme first comes to Texas

Lots of Krispy Kreme’s success came from introducing easy access to yeast doughnuts in areas where Cake Doughnut shops reigned king. Krispy Kreme’s expansion proved the idea of a dine-in doughnut house was profitable. However, franchisees would be required to not only construct Krispy Kreme storefronts but also to build a ‘commissary kitchen’ to supply Krispy Kreme’s distribution schemes. By the 70s, many national chains had keyed into the success of selling Krispy Kreme doughnuts, and presumably, these contracts were lucrative for their corporate overseers. The first Krispy Kreme location in Texas would be 7816 Burnet Rd, Austin, TX 78757 under franchisee Texas Doughnut Corp. The company would soon after open a second location in San Antonio, which would last less than a year. While the Austin location was a bit more successful, making it to 1980 before going out of business. The reason for these early location’s failures is not known, but it was no doubt difficult for Krispy Kreme to enter what was already a decently saturated market for yeast doughnuts. While the Austin location was built to distribute doughnuts, I have found little evidence to support that these first iterations of Krispy Kreme were widely sold beyond their own locations. About ten years after the first failure, Krispy Kreme would try again. This time opting to handle their own affairs rather than letting a franchisee mess things up again, Krispy Kreme could handle that on their own. The company would open a small-scale bakery in a rented space. It seems that during their time in Dallas, Krispy Kreme would not utilize a storefront setup but rather focus exclusively on the distribution of doughnuts. The company would purchase a much larger building in 1990 and increase its number of employees to 81. However, this success was short-lived, and in early 1992 Krispy Kreme would lay off its entire Dallas workforce using the reasoning of tough economic conditions. The doughnut chain did mention that they planned to come back once the situation had improved but did not set a specific time frame. Although within a few short years, Krispy Kreme would again begin to approach Dallas, although this time they would opt to find a franchisee. While Krispy Kreme’s search would begin in Dallas, for their third attempt, the first franchisee to sign a contract would be based out of Houston. A small company, Lone Star Doughnuts, was a joint venture between two brothers, Kevin & Jason Gordon, along with their partner, Dan Brinton.

Work on the new Houston locations began in early 1998, with a surprisingly small amount of fanfare and coverage. The first mention that Krispy Kreme would be coming to town would only make it into the paper, as the doughnuts were being prominently featured in the movie Primary Colors. The reports were that Krispy Kreme would arrive sometime that Fall, and likely on Westheimer. In October of that year, getting closer to the grand opening, Krispy Kreme was able to have representation at a Food Festival, marking the first time Houston-made Krispy Kreme doughnuts were available to the public (on previous occasions, certain high-end events had seen the doughnuts shipped in from Baton Rouge). After their debut to a receptive crowd, the full story of Krispy Kreme’s arrival in Houston was announced. The first store would be at 12403 Westheimer, which would be open 24 hours. It was meant to be the first of a proposed nine locations in the Houston area. The public’s reception to the doughnuts was warm, with some saying that their denser and more uniform texture matched what other doughnuts shops had been selling in Houston prior to the rise in popularity of the “potato flour do-nut.” While most regular Houstonians were at the least excited about the soon-to-come doughnut shops, writers at the Chronicle were ecstatic! With at least four pages of coverage, including a story contest and trivia. The Chronicle staff explained that Krispy Kreme was uniquely Southern, and expanding into Texas was braving new territory, which is a bold claim to make in Texas.

A second-generation Krispy Kreme which closed in early 2021.

The Krispy Kreme plan in Houston would, of course, include commissary operations in their initial store. This would allow the chain to quickly deploy their doughnuts to any local grocers willing to sell them. Only months after opening its first location, Krispy Kreme signed with Rice Epicurean to be their exclusive supplier of doughnuts. While Rice was nice, the availability of Krispy Kreme was still somewhat limited during their first year in Houston. That would change over the summer, as multiple C-Stores would sign onto the Krispy Kreme stocking agreement. That summer, another local grocery chain Gerland’s would also begin to carry Krispy Kreme doughnuts. Unlike other stores, though, Gerland’s had previously been making their own doughnuts which were discontinued in favor of Krispy Kreme. Hoping to ‘get the jump’ on Rice, Gerland’s contracted an earlier delivery time of 5 AM for their doughnuts, it also helped that their stores were mostly 24 hours at the time. Gerland’s would also carry an increased variety of doughnuts compared to Rice. However, the chains did agree on one thing, the Houstonian families behind both stores considered Krispy Kreme to be ‘Eastern’ rather than Southern. Towards the end of the Millennium, Krispy Kreme’s growth began to pick up speed, and thanks to some die-hard fans, rumors began to spread about when and where the next location was to go up. Rumors were spread that the corner of Bellaire and Stella Link, which had previously housed a Burger King, was to be converted into a side-by-side Starbucks and Krispy Kreme. In reality, though, the next two locations to be announced were Richmond @ Fountain View and Clear Lake. To better adapt to the Houston market, these locations would be larger than their out-of-state counterparts to offer more dine-in rooms. Things looked good, and plans were still on to build 9 total locations.

Hot Doughnuts Signs in Houston

In late 1999 the 510 W Bay Area Blvd Krispy Kreme in Clear Lake opened, followed shortly thereafter by the 5930 Richmond Ave location the next year. At this point, the franchisees expressed their desire to move deeper into the center of the city, which was not a bad idea. Downtown Houston’s working population does tend to hold far more out-of-state transplants who likely already knew Krispy Kreme. At the time, Krispy Kreme still had a warm reception, but the number of people interested in trying the doughnuts seemed to have dropped off. Many people who tried the doughnuts did so because someone else familiar with the chain had brought them to share. Around this time, Lone Star Doughnuts would also establish a distribution center to help supply their new stores and other retail outlets. In addition to getting the contract for local chains, Krispy Kreme had also landed contracts with hospitals and colleges and was negotiating with Kroger. Riding high on the success of Krispy Kreme, the three amigos secured the rights to Krystal Hamburgers in Houston. Prior to the end of the year, Krispy Kreme would open its fourth location, this one at 7630 Highway 6 North. Just after Christmas, Lone Star Doughnuts announced plans for a downtown location in the new McKinney Place complex, with access to the tunnel system. Only weeks later, the deal with Kroger was inked, and select stores began carrying Krispy Kreme doughnuts. The downtown store at 930 Main Street would open May 1, and to help sell the idea, it would also offer delivery to downtown and the surrounding area. Riding high on the hog, the Krispy Kreme trio would soon publically announce their plans to bring Krystal to Houston within the next 18 months.

From: KrispyKremeHouston.com (archived)

About a month later, Houston-Based Duncan Coffee Company partnered with Lone Star Doughnuts to open a drive-thru-only coffee shop, offering Krispy Kreme Doughnuts and other pastries made by the Houston franchisee. The branding was meant to make it seem almost like a joint venture. However, in reality, Duncan was just another retail outlet that Krispy Kreme delivered to. This new KK outlet would quickly be followed by the development of the rumored Krispy Kreme on Bellaire Blvd. Rather than locating next to Starbucks in a strip center, this store would stick with the trend of constructing a new building, including a drive-thru. During construction, Lone Star Doughnuts focused on increasing their Krispy Kreme availability in Kroger stores. By early 2002 over 90 Houston area, Kroger locations were carrying Krispy Kreme doughnuts. The selection and options were far more detailed than Rice and Gerland’s setup. Rather than requiring a customer to purchase a premade box of doughnuts, Kroger let their customers buy them individually. Similar to Gerland’s, Kroger also discontinued their doughnut case to provide ample room for Krispy Kreme. The locations which did not receive the doughnuts were either too small for the addition or potentially on the chopping block. These agreements even began to bleed into the peripheries of Houston, with Bryan/College Station Krogers even being supplied with Krispy Kreme doughnuts. With a location rumored for Sugar Land, Krispy Kreme had a hold on the entire Houston area. Days before the Bellaire location opened, a Krispy Kreme would be planned for Beaumont, next to a Krystal location being worked on by the same company. By the end of 2002, Lone Star Doughnuts had struck a deal to become a concessionaire at the brand new Reliant Stadium. However, going forward, things would begin to slow down.

Cold doughnuts are no good anyway

The drive to bring Krispy Kreme back into Texas was not a singular push. Rather, it was part of a larger undertaking to expand the brand in the U.S. and internationally. Unfortunately, this expansion was not well received, and by 2003 Krispy Kreme Corporate knew the company was in trouble. According to franchisees, the corporate offices first began raising the pricing of supplies, along with requiring the purchase of ‘unnecessary’ equipment to make up for lost profits. Furthermore, some accused Krispy Kreme of adding bogus fees and misappropriating franchise fees. By the end of the year, one more Krispy Kreme would open. This location would be unlike the seven others in that it was not a new-built store. Rather, a former Fazzoli’s in Missouri City was repurposed for the doughnut shop. While this did bring Lone Star within one location of their goal, this would be the final Krispy Kreme the franchisee would build. Around this time, multiple Krispy Kreme franchisees throughout the U.S. began to file lawsuits mostly related to the claims above. It seems that Lone Star Doughnuts was early on in their filings but kept the majority of the details from the press. In addition to the monetary issues, Lone Star claimed they were pressured to continue expanding when financially, they couldn’t. Krispy Kreme would retort that Lone Star Doughnuts was, in fact, over $1 Million in debt to their corporate overseers. Although their relationship was quickly deteriorating, Krispy Kreme was ordered to continue supplying Lone Star, albeit under the older terms that Lone Star had protested. During this time, two Krispy Kreme locations (Copperfield & Bellaire) would quietly be shut. While Houstonians remained somewhat in the dark about the filing of the case, details would finally come to a head in 2006, with the parties settling.

As part of the settlement Lone Star Doughnuts would end its association with Krispy Kreme by March 2006.  In the meantime, however, Lone Star was allowed to continue to operating under the Krispy Kreme name until a brand could be built. As well, grocery contracts with Rice and Gerland’s were confirmed to continue, with Kroger looking likely. The company’s new name, Jumble’s Dough Factory & Coffee Bar, debuted on March 8, 2006. In addition to the normal fare of doughnuts, the stores also began to offer specialty coffees, teas, and juices, hoping to capitalize on the success of Starbucks. Plans also called for Jumble’s locations to start selling kolaches, muffins, and other pastries they were already baking for wholesale. Initially, Jumble’s doughnuts still resembled Krispy Kreme, but with the change in suppliers, the quality of the ingredients began to drop, and so did the doughnuts. Stores were described as being ghost towns fully stocked and staffed but with almost no customers in them. In June, Jumble’s immediately shut down operations. It was quite sudden with phones disconnected, changed locks at the Richmond Ave location, and an unexplained lack of deliveries to their wholesale clients, including Kroger. By the end of 2006, Jumble’s assets were auctioned off. The ’cause’ of death for Jumble’s was said to be a lack of distinction from their previous operations, not bringing in new customers. While likely true to a certain extent, as someone who was a frequent Krispy Kreme customer, I can wholeheartedly say, that when the quality of doughnuts declined, that was the final nail in the coffin for Jumble’s.

The Half-Baked Return

In 2013, Krispy Kreme made good on its promise and planned a return to Houston. This time, they would pair with an existing Dallas Franchisee with a plan to bring 10 locations to Houston by 2018. At the time, no opening dates or locations were given, and the information went mostly silent for over a year. In late 2014, 5611 Highway 6 would be revealed as Houston’s first return Krispy Kreme location. It was set to open by February of the next year, except it didn’t. Rather, by September of that year, construction on what was to be the second location, in a former Arby’s on Westheimer, was nearing completion, with the Highway 6 location still not open. The franchisee explained that they felt the Highway 6 store did not have the capacity or infrastructure to support the demand Krispy Kreme would drive and didn’t want to disappoint anyone. The franchisee would also reveal that two more locations were in the works, one in Pasadena and the other on the South Loop. The plan would change to opening the completed locations simultaneously in October, a date which came and passed without any news. Finally, by November, both stores would open within a few weeks of each other. Locations would also later open in Baytown, Pearland, Katy, and Humble. However, interestingly the nearly completed South Loop location would be abandoned. The Baytown location would close around 2018. Overall, Krispy Kreme’s reentry into Houston has been less than stellar. In 2021, Krispy Kreme corporate took over the franchisee’s stores throughout Texas, and not much has changed as of yet.

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