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Krispy Kreme mule will be allowed to continue operating
- mindcrime 7y agoIt never ceases to amaze one just how tone-deaf big companies can be. Smart managers at Krispy-Kreme would have been all over this: looking to include this guy in ads, touting the way Krispy Kreme is helping one hard working student pay for college, living the American Dream, etc., etc. The good-will alone would have been something you couldn't buy if you tried. Instead, they totally screwed the pooch and hurt their brand, their customers, and the hard working college kid aspiring for the American Dream. Way to go, Krispy Kreme.
- hnspirit 7y agoIt's an American story as old as boomers!
- mytailorisrich 7y agoThey didn't see how great that was for their product and brand. They just saw that this guy's profit didn't go to them...
- joezydeco 7y agoYou know normally I would agree with this sentiment, but we're talking about food that's being shipped in unsealed boxes. I can totally see KK's side of this problem. It's sad to say in the scope of modern society, but how can you trust that this kid is actually selling you legitimate (and, without getting off track, unadulterated) Krispy Kreme donuts when he pulls up in your town? What damage would this do to the brand if the person turned out to be a bad actor? If you were the CEO of Krispy Kreme, would you err on the side of caution and stop something before it gets out of hand? A good friend of mine is a restaurant owner and he has a similar gripe about GrubHub and delivery services of this ilk. They bring the food cold, late, and mangled and now the restaurant's reputation is damaged instead of blaming GrubHub for how it was treated in transit.
- foxyv 7y agoIt would be cool if restaurants could take a picture of the food as it goes out and send it to the consumer. "Hey your food just went out. Look how good it is!" Then when the delivery driver crushes it with something they can take the heat.
- mindcrime 7y agoWhat damage would this do to the brand if the person turned out to be a bad actor? If you were the CEO of Krispy Kreme, would you err on the side of caution and stop something before it gets out of hand? Fair point, but people already trust strangers to deliver their food by using GrubHub, Postmates, Uber Eats, etc. Anyway, maybe the "right thing to do" for KK was not to just turn a blind eye and ignore the whole thing, but one can't help but suspect that they could have found a better way to deal with this, that would have been more of a "win-win". Worst case, buy the kid off behind the scenes, pay him to appear in an ad or two, and then quietly shut down his service. Surely they could have some up with something that didn't portray this "$BIGCORP uses it's army of lawyers to smash the little guy" pattern...
- joezydeco 7y agoTo me, using the kid in any kind of publicity is basically hanging a banner that says "you too can make money cross-shipping our product!", which is probably not what KK corporate wants. In my view using the big hammer was necessary to stop it before it got out of control. Sure, it's brand-damaging as well, but we all have short memories these days when it comes to the Global TCP/IP Outrage Generator. It probably would piss off the franchisees too. They're the ones that paid big money for exclusive sales territories and (contractually) don't want those boundaries crossed by others.
- bryanrasmussen 7y agothis insoluble argument is between those who see opportunity and those who see risk, we love and admire those who see opportunity and we dislike those who see risk, until that risk becomes active, in which case we punish those who did not guard against it adequately. Can't have it both ways I guess, although I am probably most often on the side of those who see opportunity that tendency has come back to bite me at times.
- SN76477 7y agoOne word Liability They are so obsessed that something could go wrong it takes a team of lawyers. I hope they can’t stop him. That would be really nice.
- CamperBob2 7y agoI don't see how they could possibly stop him, under the First Sale Doctrine. About the only avenue of attack would be to rat him out to the state as an unlicensed food vendor, or something like that. And no, they shouldn't be able to use trademark law against him, any more than Microsoft should be able to stop me from selling legitimate new-in-box copies of Windows or Office on eBay.
- daveFNbuck 7y agoThey could just not sell him the doughnuts. They know who he is, and they're not obligated to sell him 100 boxes of doughnuts.
- SN76477 7y agoThat is my thinking, that they have the right to deny service.
- kpU8efre7r 7y agoBetter question- if this is so profitable why the hell aren't there more Krispy Kreme spots?
- astura 7y agoThere used to be, most of the locations went out of business around 10-15 years ago. Corporate was screwing over their own franchisees and making bad business decisions that saturated the market. On top of that corporate was cooking the books. The result was the company lost 80% of it's value and most franchises couldn't stay open. https://www.marketwatch.com/story/rise-and-fall-of-biggest-krispy-kreme-franchisee https://www.marketwatch.com/story/rise-and-fall-of-biggest-k... https://en.wikipedia.org/wiki/Krispy_Kreme https://en.wikipedia.org/wiki/Krispy_Kreme >Krispy Kreme also had supermarkets and gas stations carry their donuts, which soon contributed up to half of the chain's sales, creating further market saturation as well as increasing competition to its franchisees. All this expansion devalued Krispy Kreme brand's novelty, by making the once-specialty donuts ubiquitous, particularly as the newer sales outlets required pre-made donuts as opposed to the ones made fresh in factory stores, which alienated brand devotees. >Besides royalty payments from new stores, the parent company also enjoyed significant profits by requiring franchisees to purchase mix and doughnut-making equipment from the parent's Krispy Kreme Manufacturing and Distribution (KKM&D) division. KKM&D earned $152.7 million in 2003, which made up 31 percent of sales, with a reported operating margin of 20 percent or higher, but these mark-ups were largely at the expense of its franchisees. >Krispy Kreme has been accused of channel stuffing by franchisees, whose stores reportedly "received twice their regular shipments in the final weeks of a quarter so that headquarters could make its numbers".[9] The company was also dogged by questionable transactions and self-dealing accusations over the buybacks of franchisees, including those operated by company insiders.
- moftz 7y agoI think even the boxes you bought in the grocery store had a note about microwaving them for 8 secs to mimic the hot and fresh donuts available at the franchise locations.
- gremlinsinc 7y agoImagine if 50 mules popped up... increasing KK doughnut sales by 1500 per week at 50 different locations nationwide... hard to imagine they'd dislike making more money.... how is that negative? If it were me, I'd jump on the bandwagon and create some mule services to help grow mules to markets where Krispy's aren't delivered.
- patio11 7y agoSmart managers would run it by equally smart lawyers and regulatory partners, who would patiently and in no uncertain terms explain that compliant operation of this business has a playbook, that "college kid with an unrefrigerated uncontrolled uncleaned car" is not part of that playbook, and that the last time a fast food chain needed to announce a food safety issue it wiped off billions of dollars in market cap. (The tippity top of the iceberg here is that the courier can't produce a document attesting to the last time his car was cleaned signed and dated by the person who visually inspected it. Note that this is a different requirement from "You must clean the interior of any vehicle which transports food over state lines.") It is very plausible that the playbook is excessively limited and excessively costly because of regulatory capture by competitors, because of excessive loss aversion, or because society weights preventing risk-adjusted botulism outbreaks incorrectly against the societal good of an expectant mother being able to eat a donut, but none of those arguments against the playbook are responsive to the brute fact that the playbook exists and that you must follow it or be sanctioned. Additionally, and Dangerous Professionals will love to remind managers of this: after you have been told the playbook exists, your risk of sanction if you ignore it _increases markedly_, particularly if you do something like cite any of the above rationales as a reason to _ignore_ the playbook.
- eutropia 7y agoI'm sorry, but you're suggesting that botulism would take hold inside a 4-6 hour window on fried, glazed, doughnuts? The risk of foodborne illness on an unopened box of fresh, less than half-day old deep fried sugar crusted doughnuts has got to be stupendously low. Krispy Kreme literally sells older doughnuts on the shelves of gas stations and grocery stores. And furthermore, managers at a Krispy Kreme franchise aren't running an abstract game theoretical calculation based off of input from pastry lawyers, they're saying: "cool, $1200 in sales every Saturday!" When I was in scouts we'd do the same thing: load up the back of the SUV or pickup with boxes, drive street to street, walking door to door selling them to fund summer camp.
- patio11 7y agoI think that there is relatively little weighting to food science here and relatively high weighting towards technocratic administration, which predicts (correctly) that neither Krispy Kreme franchisees nor donut couriers have done a risk assessment and therefore is extremely prescriptive about the paper trail you need to have to exempt you from broadly applicable practices. Grocery stores are an example. They're professionalized infrastructure! The regulator knows their safety record individually, as a class, and feels regulatory-warm-fuzzies over knowing that there is a named individual at the store responsible for food safety and who files a report weekly saying "Story this week same as the last week; we checked everything you want checked and there were no anomalies, because we made it so."
- notatoad 7y agodid it really hurt their brand though? it seems like maybe they're using the streisand effect to their benefit here - i wouldn't have heard about the original story if not for the controversy. they get the "people want our product so bad they're breaking rules to get it" headlines while also shielding themselves from any potential legal or food-safety issues by being loudly on-record as saying not to do this.
- mindcrime 7y agoOK, good news. Krispy Kreme came around and worked out a deal with the kid after all. https://www.wfsb.com/krispy-kreme-strikes-deal-with-college-kid-who-drives-miles/article_c09a7527-8224-56bd-a570-b4c89d70701f.html https://www.wfsb.com/krispy-kreme-strikes-deal-with-college-...
- rolph 7y agoas soon as he buys them he can do whatever he wants, he just cant imply that he works for krispy kreme or is part of the distribution network. if KK doesnt want to sell in an area that wants KKs thats thier problem. people are allowed to grocery shop by proxy and operate delivery services of many types. it would probably help his case if he was taking delivery orders for other things such as bottled water, or energy drinks, and jack links as well.
- Jamwinner 7y agoReminds me of 'pirate joes', an interesting story on commerce and trademark.
- rolph 7y agofound an article re: _irate joe's https://www.npr.org/sections/thetwo-way/2016/08/29/491824957/arrgh-pirate-joes-and-trader-joes-are-once-again-locked-in-legal-battle https://www.npr.org/sections/thetwo-way/2016/08/29/491824957... [2016]
- eloff 7y agoThey will probably enforce it by preventing the franchise owner selling to him. Otherwise, you're right, they can't do anything about it - not that that's always enough to stop them from strong arming a person with their lawyers.
- rolph 7y agoits usually about who has the most financial stamina in the face of legal manuevers.
- eloff 7y agoBasically always the company.
- netsharc 7y agoIf they ban him, he'd need to find, say, 10 buyers to act as middlemen between him and KK. But it would come at a significant cost to his business... KK can also just be real dicks and tell the cops about him, and bribe them with, ha, donuts.
- mrfusion 7y agoI wonder how it is that that level of demand can’t support having stores in the area?
- mark-r 7y agoIt's a novelty product. Once the novelty wears off, there's nothing special about them to make them any more desirable than any other doughnut. The Twin Cities has plenty of other doughnut outlets, many of them locally owned and run bakeries.
- kangnkodos 7y agoHow long until a supermarket in that area starts stocking KK donuts?
- pg_is_a_butt 7y agoEver since Krispy Kreme turned that kid into Froggy Fresh, and then into a little piano bitch, they have lost all of my business forever.
- deogeo 7y agoSilly consumer - free trade is only for corporations!
- poulsbohemian 7y agoI don't see how this is actually any different than any of the many doughnut (KK specifically) fundraisers around the country where groups (sports, music, etc) either pre-order or buy large quantities to resell. Its exactly the same model, other than that this guy was doing it repeatedly and KK wasn't getting to set the terms.
- kd5bjo 7y agoIf I had to guess, this is a trademark issue. First sale doctrine only gives him the right to sell legitimately-marked products, but not to use the Krispy Kreme marks in advertising. His FB page was called “Krispy Kreme Run Minnesota”, which implies an endorsement that doesn’t exist.
- jnwatson 7y agoAnybody that has an ounce of sense understands this is not endorsed by the brand.
- lotsofpulp 7y agoThat argument may not hold up in a court if Krispy Kreme had to explain why it didn't do anything to prevent known misuse of its trademark.
- SllX 7y agoThis is the most sensible possibility I’ve seen. This whole time I was scrolling I was wondering how this is different from the stupid crap Postmates and DoorDash do, or how it squares with the First Sale Doctrine.
- jjeaff 7y agoIf that's the case, seems like a friendly request to change the name of the facebook group would make more sense.
- vannevar 7y agoI don't see how it's different from any of the food delivery services I can use to get Krispy Kremes brought to my house. Not sure KK has a legal leg to stand on here.
- turc1656 7y agoI wonder what was contained in that cease and desist? How could he have been doing anything that could warrant a civil suit from the company? Sure, he doesn't have a license to be a food seller, but that's a legal issue with the local municipality. I wonder what they claimed their "damage" to be?
- RenRav 7y agoIsn't this just reselling? There are plenty of small and large businesses that do this exclusively. I think maybe he was just using the Krispy Kreme branding or trademarks.
- datavirtue 7y agoLooked like raw trade to me.
- jbob2000 7y agoThe practice that this student engaged in is called “arbitrage” - taking a thing that is undervalued and finding its true value. Kristy Kreme undervalued their product, which made it ripe for arbitrage. If not this student, it would have been Uber Eats or some other delivery service.
- nomel 7y agoIs it arbitrage? The value he's adding is convenience, which is what people are paying extra for. I don't think the donuts sitting behind the counter at Krispy Kreme are undervalued. They have a huge inconvenience cost built into their location.
- jbob2000 7y agoMy comment was a bit wrong, I should have said that he found value in another market; krispy kreme was serving one market, where the donuts were valued at X. But this guy found the student market, where donuts were valued at x+n.
- deleted 7y ago[deleted]
- kgwgk 7y agoCommerce: the exchange or buying and selling of commodities on a large scale involving transportation from place to place Retail: the sale of commodities or goods in small quantities to ultimate consumers
- alaskamiller 7y agoNew is everything old. Back in 2015 a little burger shop sues a little known company for ferrying burgers across the Stanford campus. https://www.mercurynews.com/2015/11/12/in-n-out-burger-sues-palo-alto-delivery-startup-doordash/ https://www.mercurynews.com/2015/11/12/in-n-out-burger-sues-...
- masonic 7y agoIt was "ferrying" them from well off-campus (Mountain View, 101 and Rengstorff). The suit settlement did shut down Doordash from gray-marketing In n Out.
- closetohome 7y agoDelivery services basically gave restaurants a never-ending source of business that requires no seating, wait staff, or overhead of any kind, and their response has been almost universally negative. I don't get it.
- Overtonwindow 7y agoNot gonna happen. The first sale doctrine gives him the right to resale all he wants.
- inportb 7y agoBased on his Facebook page[1], it seems he's going to be an authorized reseller soon. > Hi everyone, here is the next important update! I am pumped to announce that I will be able to continue the business soon, and have the support of Krispy Kreme. They want to ensure I become an independent operator and make sure the brand is represented well. On both ends, there are things that are being worked on right now to achieve that as this is being made as a special exception. But nonetheless, we can get started up again soon once certain things are in place. > This being said, I am definitely going to need a bigger vehicle with how much this has grown over the past few days. I know a couple of you have asked about a GoFundMe. I decided to create one because I won't be able to cover the costs on my own I realize. Any donation would mean the world to me, no matter how small. Maybe I can decal it with some donut stickers! I am happy that things turned out positive, and this can continue to strive and grow over the next couple of years. I've said it before, and I will say it again. Thank you from the bottom of my heart to everyone that has supported me on this journey. [1]: https://www.facebook.com/pg/KrispyKremeRunMinnesota/posts/ https://www.facebook.com/pg/KrispyKremeRunMinnesota/posts/
- jacobwilliamroy 7y agoHow do you think he'll do his taxes? Do you think he'll hire someone? Or maybe he has a CPA in his family?
- kevinthew 7y agoNot sure if serious but he's an accounting major. Guessing he has it covered.
- jacobwilliamroy 7y agoCool. I hope he has everything covered, seeing as how he's making money now. I hope everything works out for donut man.
- megablast 7y agoThe taxes for this would be incredibly simple, anyone could do it with a spreadsheet Keep track of what you buy and sell.
- lr 7y agoGo to UCLA in the morning and take Election Walk, and you will find 10+ different student groups reselling KKs, five days a week!
- schoen 7y agoBefore Pollo Campero opened in San Francisco, there were people (1) driving vans of take-out from Los Angeles, and (2) flying it over on an airplane from Guatemala. https://web.archive.org/web/20110603025320/http://blogs.sfweekly.com/foodie/2010/02/is_there_an_sf_underground_net.php https://web.archive.org/web/20110603025320/http://blogs.sfwe... https://archives.sfweekly.com/thesnitch/2011/02/14/mission-importers-not-playing-chicken-with-pollo-campero https://archives.sfweekly.com/thesnitch/2011/02/14/mission-i...
- vxNsr 7y agoThere was a planet money story about a guy in canada who would buy up huge quantities of trader joes stuff and sell it at a significant markup. he had to evade trader joes' managers who were told the guy was a persona-non-grata and did a lot to keep him out. eventually he had to close up shop (and he did have a real physical location) as it became too difficult to stay open.
- skinnymuch 7y agoHe had to close because even though the legal rulings were for him. Trader Joe’s kept appealing and he couldn’t keep up with the finances for defending what had become bullying. https://en.m.wikipedia.org/wiki/Pirate_Joe's https://en.m.wikipedia.org/wiki/Pirate_Joe's
- jerriep 7y agoThis reminds me of domestic flights in Thailand from Bangkok to Chiang Mai where it is common to see Krispy Kreme mules. There are no Krispy Kreme stores in Chiang Mai but the people in Chiang Mai seems to prefer it over other Doughnut shops in the city. So, when locals fly up from Bangkok to Chiang Mai it is fairly common for them to take up a few boxes of Krispy Kreme for their friends and family.
- sfgweilr4f 7y agoSomeone at Krispy Kreme should be fired. Better business all around would have been to come up with some happy way to bring this guy in somehow. Publicity alone would have been ridiculously profitable: ie Free. Offer him a delivery franchise or whatever. Krispy Kreme actually said No to a delivery model that only needed tuning and some simple improvements. He essentially did a territory feasibility assessment for them. For free. As a non-customer I now just think of Krispy Kreme as jerks. And the kind of business people who hate making money.
- kkleindev 7y agoI think there should be other, better ways of rectification than firing someone.
- philpem 7y agoSometimes removing the problem is the best solution.
- mattmanser 7y agoFired? They made the right decision. They would have to add some sort of management structure, make sure he was up to hygiene codes, incorporate the new model in their finance and admin, produce risk assessments, have meetings, do a ton of work I can't even think of. It would cost them $100,000s, for a few $1,000 revenue. That they've been forced to adopt him because of an online backlash is an indictment of the irrationality of the internet, not a bad mark against the totally reasonable, and rational, decision an employee made. And now you're calling for him to be fired. Sad.
- sfgweilr4f 7y agoYou're writing as if food delivery was a new thing and therefore completely unknown. If my local bakery can get UberEats worked out, I'll boldly state that a company like Krispy Kreme can probably afford a lawyer or two to read a contract without evaporating 1.5 million dollars or whatever. Fire someone, reduce bonuses, perhaps a stern look at the next regional meeting. Figure it out people. Good grief. Companies complain about slow revenue growth while leaving obvious money on the table. This example was a business refusing a $1000 or similar per month. That might not be much to you, but I'm fairly sure a franchisee would notice that. $12k/year is measurable for most small businesses even if you wouldn't even notice that amount.
- reportgunner 7y agoIsn't the takeout a spinoff of The Onion ?
- manigandham 7y agoHe already posted an update that he's allowed to continue and the company is supporting him: https://www.facebook.com/KrispyKremeRunMinnesota/posts/449232749046048 https://www.facebook.com/KrispyKremeRunMinnesota/posts/44923... "Hi everyone, here is the next important update! I am pumped to announce that I will be able to continue the business soon, and have the support of Krispy Kreme. They want to ensure I become an independent operator and make sure the brand is represented well. On both ends, there are things that are being worked on right now to achieve that as this is being made as a special exception. But nonetheless, we can get started up again soon once certain things are in place." Seems like confirmation that this was most likely about trademarks and representation.
- forgingahead 7y agoIt will be interesting if Krispy Kreme also makes an effort to be flexible with their operation with him. It obviously didn't work to have store franchises previously, the total sales likely didn't cover all the fees and costs, hence the closure. Besides the geo-arbitrage, it seems obvious that a huge part of this guy's success was going to 8 different Target parking lots, and splitting the (pretty small) total across them. Simple envelope math: 100 boxes across 8 lots, that's 12 boxes per lot. Pretty horrible if you're a franchisee, but nice and comfortable if you're a college kid looking to earn extra bucks. If KK can be flexible with him ("here's a regulated supply, you guarantee and agree to certain food safety/brand provisions, now you can drive around like an ice-cream man and sell this"), it's likely he can continue, but if he's diving headfirst into a typical franchisee arrangement, he should run for the hills.
- gridspy 7y agoHe's looking to expand his delivery van: https://www.gofundme.com/f/krispy-kreme-vehicle-upgrade https://www.gofundme.com/f/krispy-kreme-vehicle-upgrade
- kennyadam 7y agoI respect what he's doing, but I'm not totally clear on why he expects people to donate for him to buy a van? I get it when people ask for help with medical bills (well, I'm in the UK but I sympathise with them), but he just wants a bigger vehicle? Save up your donut money and buy it dude!
- al_be_back 7y agothat's an impressive hack - an entrepreneurial trait indeed.
- froggy-fresh 7y agoBasically, Krispy Kreme is run by morons that hate their own fans.
- samtrack2019 7y agoas someone from south Europe, I am amazed for the love of donuts they have in the U.S.A, how can you be craving so much to pay twice for donuts? they are mostly pure sugars sweets isnt it ?
- goatinaboat 7y agohow can you be craving so much to pay twice for donuts? It’s a cultural thing. For example if you are an American cop then being seen with a donut in your hand is part of the image, just as much as the badge and the gun. People will gladly pay a premium in many ways to portray a particular image, the entire fashion industry relies on it.
- spuz 7y agoHave you tried Krispy Kremes? I can see why they are worth paying double for some folks.
- lukebitts 7y agoI've been to the US once and the only thing I miss is Krispy Kremes. I haven't found a single other doughnut that is as good as theirs.
- dghughes 7y agoCome on now being in southern Europe you should be well aware of cafes and corner bakeries and the culture around it. It's pretty much the same concept as the US (or Canadian) doughnut shop except not as nice. I worked with a guy from Poland who worked for a company in Austria which was based in Monaco. He just got back from Spain after being in France for a while. When he came here to Canada he was shocked at the lack of corner bakeries. It's so common to pop into a corner bakery for a croissant or sandwich made fresh that morning or afternoon. In Canada the Tim Horton's coffee and doughnut shop is a giant. It has four times as many store per capita than Starbucks in the US.
- JoeAltmaier 7y agoAs distinguished from waffles, shortbread, Belgian chocolates, and on and on?
- fatnoah 7y agoThis story strikes very close to home. My first capitalist adventure involved running donuts to my middle, and later, high schools. I used to periodically stop on the way to school to grab a donut and noticed that buying 6 donuts at once cost the same as buying 5 individually. So, I purchased 6 every morning and sold the other 5 at the individual price. By the time I got to high school, I was moving 4-6 dozen donuts a day, and had "employees" who handled deliveries and collections and were paid in donuts.
- travisgriggs 7y agoI have mixed feelings about this. I commented on the previous post that broke this story, pointing out just how many youth fund raising activities had been doing exactly this for ever. And I really admired the guy and his repeated efforts to make some money for school. This is the classical lemonade stand incarnate. He warmed my heart; big business KK pissed me off. Day two rolls around. Things are proceeding. An agreement has been struck, and he's soliciting the equivalent of seed money to meet the new anticipated demand. Whereas yesterday I could have seen some additional students using their small cars to also deliver donuts if a) they're willing to put in the effort and b) there's enough demand, today that seems less likely. The sophomore across campus now has to compete against the capital gifted to this guy as well as his "special arrangement" with KK. So, some form of "big business" wins again.