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New England Dough is KKDC's franchisee in the New England market. Prior to this transaction, KKDC owned a 60 percent interest in New England Dough.
Under the agreement, New England Dough will distribute approximately $1.5 million to KKDC, as well as the development rights for the New England territory, which includes Massachusetts, Connecticut and Rhode Island. New England Dough will transfer its stores located in Milford, Connecticut; Cranston, Rhode Island; and Dedham, Massachusetts to Northeast Doughnuts, LLC, a wholly-owned subsidiary of KKDC. Jan Dough will receive from New England Dough all of its interest in the store located at Mohegan Sun. New England Dough's three remaining stores were closed and the affairs of New England Dough will be wound down.
"This transaction represents another step forward in Krispy Kreme's restructuring process," said Steve Panagos, President and Chief Operating Officer of Krispy Kreme. "We believe that the New England region has significant growth potential and we look forward to continuing to serve this important market."
The company also announced today that Freedom Rings, LLC, KKDC's wholly- owned subsidiary and franchisee in the Philadelphia region, has closed its remaining four locations. Freedom Rings has been operating under Chapter 11 bankruptcy protection since October 16, 2005.