While a lot of people might like Krispy Kreme donuts, the company has made plenty of blunders.
From destroying sewer systems to promotions in the middle of a pandemic, these are the scandals that
Krispy Kreme can never live down.
In 2005, Krispy Kreme publicly admitted that it messed up. That year, the company released
an internal report that stated some of its accounting had been completely inaccurate.
Krispy Kreme admitted that it had discovered some $25.6 million lost through incorrect
accounting. Nevertheless, the report didn't state that donut makers had committed fraud.
Instead, the company claimed that the issues were part of poor accounting practices and errors,
but not a deliberate attempt to manipulate funds. Furthermore, company employees claimed that
they didn't distort the numbers on purpose. Moreover, this internal report hasn't been
the only investigation that has probed into Krispy Kreme's earnings and come up with some
funny numbers. In 2009, The Wall Street Journal reported that the U.S. Securities
and Exchange Commission was interested in this organization's accounts. It began a probe into the
donut company's earnings beginning in 2004. By the end of the investigation, the SEC concluded that
Krispy Kreme had inflated its profits on purpose. The SEC charged three former executives $632,919,
plus interest and another $150,000 worth of fines. The company itself, however,
was off the hook, at least financially. But what did Krispy Kreme think about this situation? Well,
naturally, it denied cooking its books.
Sewers are a fundamental part of any city's infrastructure. They enable waste and debris
to be taken to a distant treatment plant safely and responsibly. However, it wasn't
that simple when Krispy Kreme got involved. In 2009, Krispy Kreme was blamed for harming
a waste treatment plant in Fairfax County, Virginia by putting grease and yeast into
the pipes and therefore clogging up the works. The company was additionally accused of breaking
its lease at its property. In 2012, Krispy Kreme was sued by its landlord for these violations.
The frustrated property owner wanted a pretty hefty $2.7 million for their troubles.
In 2013, this issue was settled when the Fairfax County Circuit Court ruled that Krispy Kreme
had lost its case. Krispy Kreme was additionally barred from entering a counterclaim for $3 million
and was forced to settle the dispute for an undisclosed amount of money.
Surely, the vast majority of people will agree
that the Ku Klux Klan is a vile and abhorrent hate group. It's therefore probably not the best idea
to reference them in a donut ad. However, a Krispy Kreme franchise in the UK did exactly that back in
2015, though the reference appears to have been inadvertent. It all started when Krispy Kreme
held a promotional event called "Krispy Kreme Klub Wednesdays," otherwise known as "KKK Wednesdays."
After this particular Krispy Kreme branch advertised this day online,
it received some comments that noted that the abbreviation it used was a common reference to
the aforementioned hate group. The offending post was quickly removed. A spokesperson who
worked for Krispy Kreme told The Guardian: "Krispy Kreme apologizes unreservedly for
the inappropriate name of a customer promotion at one of our stores. This promotion was never
intended to cause offense. All material has been withdrawn and an internal investigation
is currently underway."
It's an employer's responsibility to keep their workers safe while they're engaged
in their duties. This is why it's such a shame when companies fail to fulfill this duty and
an employee's safety begins to look less than certain when they're trying to do their job.
There was a seriously unfortunate time when a Canadian Krispy Kreme franchise didn't do all
that it could to protect a member of the staff. In 2005, the donut company in question was fined
for violating Ontario's Occupational Health and Safety Act. This is because, in the previous year,
a worker of theirs was driving a lift truck for the first time. Critically, the driver hadn't
received any official training whatsoever and subsequently crashed while operating the vehicle.
"We'll get someone to clean that up." "We're the ones who gotta clean that up!"
During the court proceedings, Krispy Kreme pled guilty. So, how much was the Canadian branch
fined? Well, this organization got ordered to hand over $90,000. The court also made Krispy Kreme pay
an extra $22,500 surcharge. This additional money went to a special provincial government fund that
supports victims of crime.
By 2008, every Krispy Kreme in Minnesota had come and gone. There were several reasons for the
closures, but the end result was a region deprived of the tasty treats. Fast forward to 2019 when a
college student began selling Krispy Kreme donuts in Minnesota. He did this by driving to Iowa each
weekend and then purchasing the elusive donuts. He then sold them back in Minnesota for an estimated
$17 to $19 per box. However, Krispy Kreme didn't approve of this situation and ordered the budding
entrepreneur to stop. The student subsequently wrote that he'd been forced to stop on Facebook,
after which he received heaps of online support. Moreover, once members of the general public
became critical of the chain's move, Krispy Kreme changed its decision. A spokesperson
said that the inventive student would be allowed to keep selling his donuts.
Businesses in the United Kingdom must financially
support recycled packaging efforts and the recovery of packaging waste efforts equal to the
amount of packaging that they have put onto the market. Businesses can support these operations
by buying Packaging Recovery Notes, which results in someone else doing this work for them, or they
can undertake their own recycling initiatives. However, in 2011 Krispy Kreme was fined more than
12,000 pounds at the Woking Magistrates Court for not buying its required Packaging Recovery Notes.
What's more, this donut company pled guilty to not recovering and recycling the correct amount of
packaging waste between the years 2006 and 2009. Krispy Kreme instead joined the program in 2010.
An investigating officer at the Environment Agency responded to the company's failures by stating
that though the regulations were in place for over a decade, lots of businesses were still unaware of
them. According to the officer, the money that Krispy Kreme saved by not purchasing Packaging
Recovery Notes would have supported the recycling industry. He felt strongly that all businesses
take their impact on the environment seriously. Further, he claimed that Krispy Kreme failed to
do that by not following the regulations.
In 2018, Krispy Kreme opened its first-ever store in New Zealand. However, this grand
opening wasn’t a success because, during the proceedings, a security guard refused entry to
a Filipina woman. Apparently, only New Zealand residents could win any of the free donuts that
the store was providing. Because she wasn’t a citizen, the woman didn’t feel that she
had any recourse to fight the discrimination. The Philippines' ambassador in New Zealand,
Jesus Domingo, was critical. "What might have this been a case of
racial profiling. Because from the information we have it seems to be just based on looks."
He went on to suggest that people ditch Krispy Kreme in favor of Filipino-owned and
operated bakeries. Of course, he noted that people could always go to Dunkin' Donuts, too.
Krispy Kreme later apologized for what had happened, saying that the company
was disappointed to cause an upset with the New Zealand Grand Opening competition.
Andrew McGuigan [muhk-GWEE-guhn], the company's chief executive of Australia and New Zealand,
said that their standard terms and conditions required that entry to competitions were only for
citizens of the specific country. They claimed that they underestimated New Zealand’s diverse
population and apologized for the lapse in judgment. As a final act of contrition,
they updated their terms and conditions to avoid further controversy of this particular nature.
Krispy Kreme has settled out
of court on more than one occasion. In 2006, the company agreed to give some of their workers $4.7
million after a financial dispute where employees alleged that Krispy Kreme had concealed the fact
that their profits were going down. These losses reportedly resulted in some of its staff members
losing heaps of retirement saving funds. The employees involved in the proceeding believed
that the executives had lied. The people in charge didn't tell them the stocks which they
bought for their 401(k) accounts or were given as bonuses were actually pretty precarious
investments. This was all due to the difficulties Krispy Kreme was experiencing at the time.
Krispy Kreme claimed that it did nothing wrong in regards to how it paid its workers
or presented its finances. Nevertheless, this settlement was for a serious amount of cash.
Hopefully, Krispy Kreme's staff members don't feel like they have to make these types of
accusations again in the future.
Amidst a 2020 coronavirus lockdown in Melbourne, Australia, and while Sydney was on the edge of a
larger COVID-19 outbreak, Krispy Kreme decided to hold an ill-considered promotional campaign.
Local stores offered free donuts to people whose birthdays fell between March 13 and July 13,
an event that resulted in some people ignoring social distancing guidelines. The New South Wales
Police stated that riot squad, traffic control, and other officers were called to more than one
of the donut company's stores. Moreover, a Melbourne establishment had to close early.
The NSW Police Force was extremely critical of this free donut campaign.
Acting assistant commissioner Tony Cooke said, "This is nonsensical and defies logic."
Meanwhile, the NSW minister for police and emergency services, David Elliott stated that
"The recent images we have seen of mass gatherings and social distancing rules
being blatantly ignored are disturbing." Krispy Kreme ended up defending its decision
to run the event despite the subsequent uproar. The company stated that when announcing the offer,
Krispy Kreme clearly stated that government guidelines must be followed. They added that
customers would be required to comply with social distancing rules at all times. However,
despite this being the case, Krispy Kreme still decided to suspend their campaign
in the face of the ensuing backlash. Check out one of our newest videos
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