Hub and Spoke to Going Broke
How Krispy Kreme tried to turn a doughnut shop into a distribution network — and where to still find the real thing
A tweet has been making the rounds claiming Krispy Kreme stock has crashed more than 90%, and that the reason is simple: a private equity firm bought the company in 2016, decided to stop making doughnuts fresh in every store, and started shipping them from a single central location instead.
It’s a satisfying story. It’s also not quite right. The real story is messier, more interesting, and honestly more damning — it’s a story about debt, real estate, and a decade-long bet that you could turn an experience into a commodity without anyone noticing the difference.
In May 2016, JAB Holding Company — the private investment vehicle of Germany’s Reimann family — agreed to take Krispy Kreme private for $21 a share, about $1.35 billion total. JAB isn’t a traditional private equity fund with outside limited partners; it’s closer to a family holding company. But its acquisition strategy shared important features with private equity: JAB was in the middle of a multi-year buying spree that already included Keurig Green Mountain, Peet’s Coffee, Caribou Coffee, and Einstein Bros. Bagels, and it financed these deals the way PE firms typically do — with a lot of borrowed money.

























































