---

---

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION




Washington, D.C.
20549




 Form 10-K/A




(Mark one)þ
    
    ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
      OF 1934For the fiscal year ended
      January 29, 2012ORo
    
    TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
      OF 1934For the transition period
      from       to


Commission file number
001-16485  KRISPY KREME DOUGHNUTS,
INC.  (Exact name of registrant as
specified in its charter)




North
Carolina
    56-2169715(State or other jurisdiction
      of
    (I.R.S. Employer
      Identification No.)incorporation or
      organization)370 Knollwood
      Street,
    27103Winston-Salem, North
      Carolina
    (Zip Code)(Address of principal
      executive offices)


Registrants telephone number, including area code:(336)
725-2981 Securities registered pursuant to
Section 12(b) of the Act:




Name ofEach
  Exchangeon WhichTitle of Each
      Class
    RegisteredCommon Stock, No Par
      Value
    New York Stock
    ExchangePreferred Share Purchase
      Rights
    New York Stock
    Exchange


Securities registered pursuant to
Section 12(g) of the Act:None




Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes o No þ




Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. Yes o No  þ




Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes þ No o




Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes þ N o o




Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this
chapter) is not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. þ




Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.




Large accelerated filero
    Accelerated filerþ
    Non-accelerated filero
    Smaller Reporting Companyo


Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ




The aggregate market value of voting
and non-voting common equity of the registrant held by nonaffiliates of the
registrant as of July 29, 2011 was $553.4 million.




Number of shares of Common Stock, no
par value, outstanding as of March 16, 2012: 68,097,098.




DOCUMENTS INCORPORATED BY
REFERENCE:




Portions of the definitive proxy
statement for the registrants 2012 Annual Meeting of Shareholders to be held on
June 12, 2012 are incorporated by reference into Part III hereof.




---

---

---



EXPLANATORY NOTE

This Form 10-K/A
(Amendment No. 1) amends the Registrants Annual Report on Form 10-K for the
year ended January 29, 2012, filed with the Securities and Exchange Commission
on March 30, 2012 (the Original Report). The purpose of this Amendment No. 1
is to amend the following items in the Original Report:

| | 1. |  | Item 15(a)(3), Exhibits, is
      amended to correct the spelling of Blackman Kallick, LLP in the
      Description of Exhibit 23.2.                                                                                                                                                                                                                              
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   
| | 2. |  | Item 15(c)(1), Separate
      Financial Statements of 50 Percent or Less Owned Persons, is amended to
      provide the signed report of Blackman Kallick, LLP with respect to the
      financial statements of Kremeworks, LLC as of December 28, 2011 and
      December 29, 2010, and for each of the three years in the period ended
      December 28, 2011.

This Amendment No. 1 has no effect on the Registrants consolidated
financial statements. Except as described above, this amendment does not amend,
update or change any other items or disclosures contained in the Original Report
or otherwise reflect events that occurred subsequent to the filing of the
Original Report.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as
amended (the Exchange Act), the certifications required pursuant to the rules
promulgated under the Exchange Act, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, which were included as exhibits to the Original
Report, have been amended, restated and re-executed as of the date of this
Amendment No. 1 and are included as Exhibits 31.1, 31.2, 32.1 and 32.2 hereto.

3

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PART IV

Item 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES.

(a) Financial Statements and Schedules

1.
    
    Financial Statements. See Item 8, Financial
      Statements and Supplementary Data.2.
    
    Financial Statement Schedules.For each of the three fiscal years in the period ended January 29,
      2012:Schedule I  Condensed
      Financial Information of Registrant
    F-13.
    
    Exhibits.


|ExhibitNumber |  |  |   | Description
      of Exhibits
|------------- |  |  | - | -----------------------------
|3.1           |  |  |  |                              
|3.2           |  |  |  |                              
|4.1           |  |  |  |                              
|4.2           |  |  |  |                              
|4.3           |  |  |  |                              
|4.4           |  |  |  |                              
|10.1          |  |  |  |                              
|10.2          |  |  |  |                              
|10.3          |  |  |  |                              
|10.4          |  |  |  |                              
|10.5          |  |  |  |                              

4

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|ExhibitNumber |  |  |   | Description of Exhibits
|------------- |  |  | - | -----------------------
|10.6          |  |  |  |                        
|10.7          |  |  |  |                        
|10.8          |  |  |  |                        
|10.9          |  |  |  |                        
|10.10         |  |  |  |                        
|10.12         |  |  |  |                        
|10.13         |  |  |  |                        
|10.14         |  |  |  |                        
|10.15         |  |  |  |                        
|10.16         |  |  |  |                        
|10.17         |  |  |  |                        
|10.18         |  |  |  |                        
|10.19         |  |  |  |                        
|10.20         |  |  |  |                        
|10.21         |  |  |  |                        
|10.22         |  |  |  |                        

5

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ExhibitNumber
    
    
    
    Description of Exhibits10.23
    
    
    
    
    Amendment No. 1, dated as of
      September 15, 2011, to the Credit Agreement dated as of January 28, 2011,
      among Krispy Kreme Doughnut Corporation, Krispy Kreme Doughnuts, Inc., the
      Lenders party thereto and Wells Fargo Bank, National Association, as
      administrative agent (incorporated by reference to Exhibit 10.1 to the
      Registrants Quarterly Report on Form 10-Q filed on December 2,
      2011)10.24
    
    
    
    
    Security Agreement, dated as
      of January 28, 2011, among Krispy Kreme Doughnut Corporation, Krispy Kreme
      Doughnuts, Inc., the Pledgors party thereto and Wells Fargo Bank, National
      Association, as administrative agent (incorporated by reference to Exhibit
      10.2 to the Registrants Current Report on Form 8-K filed on February 1,
      2011)10.25
    
    
    
    
    Guaranty Agreement, dated as
      of January 28, 2011, among Krispy Kreme Doughnuts, Inc., the Subsidiary
      Guarantors party thereto, the Lenders party thereto and Wells Fargo Bank,
      National Association, as administrative agent (incorporated by reference
      to Exhibit 10.3 to the Registrants Current Report on Form 8-K filed on
      February 1, 2011)10.26
    
    
    
    
    Form of Indemnification
      Agreement entered into between Krispy Kreme Doughnuts, Inc. and Lizanne
      Thomas and Michael Sutton (incorporated by reference to Exhibit 99.3 to
      the Registrants Current Report on Form 8-K filed on October 8,
      2004)**10.27
    
    
    
    
    Form of Indemnification
      Agreement entered into between Krispy Kreme Doughnuts, Inc. and members of
      the Registrants Board of Directors (other than Lizanne Thomas and Michael
      Sutton) (incorporated by reference to Exhibit 10.42 to the Registrants
      Annual Report on Form 10-K for fiscal 2005 filed on April 26,
      2006)**10.28
    
    
    
    
    Form of Indemnification
      Agreement entered into between Krispy Kreme Doughnuts, Inc. and Officers
      of the Registrant (incorporated by reference to Exhibit 10.1 to the
      Registrants Current Report on Form 8-K filed on September 18,
    2007)21
    *
    
    
    
    List of
  Subsidiaries23.1
    *
    
    
    
    Consent of
      PricewaterhouseCoopers LLP23.2
    ****
    
    
    
    Consent of Blackman Kallick,
      LLP24
    *
    
    
    
    Powers of Attorney of certain
      officers and directors of the Company (included on the signature page of
      this Annual Report on Form 10-K)31.1
    ****
    
    
    
    Certification of Chief
      Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
      Securities Exchange Act of 1934, as amended31.2
    ****
    
    
    
    Certification of Chief
      Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
      Securities Exchange Act of 1934, as amended32.1
    ****
    
    
    
    Certification by Chief
      Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 200232.2
    ****
    
    
    
    Certification by Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002101
    
    
    
    
    The
      following materials from our Annual Report on Form 10-K for the year ended
      January 29, 2012, formatted in XBRL (eXtensible Business Reporting
      Language): (i) the Consolidated Statement of Operations for each of the
      three years in the period ended January 29, 2012; (ii) the Consolidated
      Balance Sheet as of January 29, 2012 and January 30, 2011; (iii) the
      Consolidated Statement of Cash Flows for each of the three years in the
      period ended January 29, 2012; (iv) the Consolidated Statement of Changes
      in Shareholders Equity for each of the three years in the period ended
      January 29, 2012; and (v) the Notes to the Consolidated Financial
      Statements, tagged as block
text***


6

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|*    |  | Filed as an exhibit to the Registrants Annual Report on Form 10-K for the year ended January 29, 2012 under the same exhibit number.                                                                                                                                                                                                                                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|**   |  | Identifies
      management contracts and executive compensation plans or arrangements
      required to be filed as exhibits pursuant to Item 15(b), Exhibits and
      Financial Statement Schedules  Exhibits, of this Annual Report on Form
      10-K.                                                                                                                                                                                        
|    
|***  |  | Pursuant
      to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101
      hereto are deemed not filed or part of a registration statement or
      prospectus for purposes of Sections 11 or 12 of the Securities Act of
      1933, as amended, are deemed not filed for purposes of Section 18 of the
      Securities Exchange Act of 1934, as amended, and otherwise are not subject
      to liability under those sections.
|    
|**** |  | Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                       

Our SEC file number for
documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as
amended, is 001-16485.

(c) Separate
Financial Statements of 50 Percent or Less Owned Persons




1.
    
    Financial Statements of Kremeworks,
    LLCIndex to Financial
      Statements
    F-1


7

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Krispy Kreme Doughnuts,
      Inc.Date: February 22, 2013
    By:
    /s/ Douglas
      R. MuirName:
    Douglas R. MuirTitle:
    Executive Vice President and
      ChiefFinancial Officer(Duly Authorized Officer and
      Principal Financial Officer)


8

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KREMEWORKS, LLC AND SUBSIDIARY

|                                                                                                                    | Page
|------------------------------------------------------------------------------------------------------------------- | ----
|Index to Financial
      Statements:                                                                                |     
|Independent Auditors Report                                                                                        | F-2 
|Consolidated Balance Sheet
      as of December 28, 2011 and December 29, 2010                                      | F-3 
|Consolidated Statement of Operations for
      each of the Three Years in the Period Ended December 28, 2011        | F-5 
|Consolidated statement of
      Cash Flows for Each of the Three Years in the Period Ended December 28,
      2011  | F-6 
|Consolidated Statement of Changes in Equity
      for Each of the Three Years in the Period Ended December 28,
2011 | F-7 
|Notes to Consolidated
      Financial Statements                                                                    | F-8 

F-1

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Independent Auditors
Report

MembersKremeWorks, LLC and Subsidiary

We have audited the accompanying
consolidated balance sheets of KremeWorks, LLC and Subsidiary as of December 28,
2011 and December 29, 2010, and the related consolidated statements of loss,
cash flows and changes in equity for each of the years in the three-year period
ended December 28, 2011. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of KremeWorks, LLC and Subsidiary as of December 28, 2011 and
December 29, 2010, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 28, 2011 in conformity
with accounting principles generally accepted in the United States of America.

/s/ Blackman Kallick, LLPChicago, IllinoisMarch 26, 2012

F-2

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KremeWorks, LLC and
Subsidiary

Consolidated Balance SheetsDecember 28, 2011 and
December 29, 2010

Assets

|                                                  |  | 2011 |            | 2010
|------------------------------------------------- |  | ---- | ---------- | ----
|Current Assets                                    |  |      |            |     
|Cash                                              |  | $    | 575,834    |     
|Receivables                                       |  |      |            |     
|Credit
      cards                                |  |      | 35,875     |     
|Wholesale                                         |  |      | 33,845     |     
|Other                                             |  |      | 14,010     |     
|Inventories                                       |  |      | 371,895    |     
|Prepaid
expenses                                  |  |      | 5,523      |     
|                                                 
|Total
      Current Assets                        |  |      | 1,036,982  |     
|                                                 
|Property and Equipment (Net of accumulated        |  |      |            |     
|depreciation and
      amortization)              |  |      | 12,279,990 |     
|                                                 
|Deferred Area Development and Franchise Fees, Net |  |      | 100,227    |     
|                                                 
|                                                  |  | $    | 13,417,199 |     

The accompanying notes are an integral
part of the consolidated financial statements.

F-3

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Liabilities and Equity

|                                        |  | 2011 |            | 2010
|--------------------------------------- |  | ---- | ---------- | ----
|Current Liabilities                     |  |      |            |     
|Notes payable to
      affiliates       |  | $    | 3,600,000  |     
|Current portion of
      long-term debt |  |      | 3,975,789  |     
|Accounts
payable                        |  |      |            |     
|Trade                                   |  |      | 124,442    |     
|Affiliated
      entities               |  |      | 534,265    |     
|Accrued
expenses                        |  |      |            |     
|Salaries
      and wages                |  |      | 334,405    |     
|Sales
      tax                         |  |      | 20,368     |     
|Rent
      and real estate taxes        |  |      | 15,424     |     
|Accrued
      legal fees                |  |      | 55,633     |     
|Accrued
      interest                  |  |      | 1,334,469  |     
|Other                                   |  |      | 114,307    |     
|                                       
|Total
      Current Liabilities         |  |      | 10,109,102 |     
|                                       
|Deferred Rent                           |  |      | 1,887,096  |     
|                                       
|Total
      Liabilities                 |  |      | 11,996,198 |     
|                                       
|Equity                                  |  |      |            |     
|KremeWorks, LLC members'
      equity   |  |      | 5,763      |     
|Noncontrolling
      interest           |  |      | 1,415,238  |     
|                                       
|Total
      Equity                      |  |      | 1,421,001  |     
|                                       
|                                        |  | $    | 13,417,199 |     

F-4

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KremeWorks, LLC and
Subsidiary

Consolidated Statements of
LossYears Ended December 28, 2011,
December 29, 2010 and December 30, 2009

|                                          |  | 2011 |            | 2010 |  | 2009
|----------------------------------------- |  | ---- | ---------- | ---- |  | ----
|Sales                                     |  | $    | 17,730,626 |      |  | $   
|Cost of Sales -
      Food and Beverage   |  |      | 4,510,068  |      |  |     
|Gross Profit after Food and Beverage      |  |      | 13,220,558 |      |  |     
|Store Payroll
      and Benefits          |  |      | 5,362,607  |      |  |     
|Gross Profit                              |  |      | 7,857,951  |      |  |     
|Store Operating
      Expenses (Income)   |  |      |            |      |  |     
|Direct
operating                          |  |      | 1,428,112  |      |  |     
|Marketing                                 |  |      | 329,608    |      |  |     
|Occupancy                                 |  |      | 1,993,210  |      |  |     
|Depreciation and
      amortization       |  |      | 1,253,987  |      |  |     
|Impairment
    charge                     |  |      | 446,042    |      |  |     
|Gain on sale of
      assets              |  |      | (35,500    | )    |  |     
|Gain on lease
      termination           |  |      | (221,874   | )    |  |     
|Store general and
      administrative    |  |      | 601,169    |      |  |     
|Delivery                                  |  |      | 21,466     |      |  |     
|Other                                     |  |      | 87,110     |      |  |     
|Total
      Store Operating Expenses, Net |  |      | 5,903,330  |      |  |     
|Income from
      Store Operations        |  |      | 1,954,621  |      |  |     
|Other Operating Expenses                  |  |      |            |      |  |     
|Other general and
      administrative    |  |      | 753,404    |      |  |     
|Divisional payroll and
      benefits     |  |      | 443,367    |      |  |     
|Royalty fees                              |  |      | 788,576    |      |  |     
|Management fee                            |  |      | 709,084    |      |  |     
|Franchise
    expense                     |  |      | 142,172    |      |  |     
|Marketing fees                            |  |      | 174,498    |      |  |     
|Total
      Other Operating Expenses      |  |      | 3,011,101  |      |  |     
|Loss from Operations                      |  |      | (1,056,480 | )    |  |     
|Interest
      Expense                    |  |      | 268,530    |      |  |     
|Net Loss                                  |  |      | (1,325,010 | )    |  |     
|Less Net Loss
      Attributable to the   |  |      |            |      |  |     
|Noncontrolling
      Interest             |  |      | 492,763    |      |  |     
|Net Loss Attributable to KremeWorks, LLC  |  | $    | (832,247   | )    |  | $   

The accompanying notes are an integral
part of the consolidated financial statements.

F-5

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KremeWorks, LLC and Subsidiary

Consolidated Statements of Cash
FlowsYears Ended December 28, 2011,
December 29, 2010 and December 30, 2009

|                                               |  | 2011 |            | 2010 |  | 2009
|---------------------------------------------- |  | ---- | ---------- | ---- |  | ----
|Cash Flows from Operating Activities           |  |      |            |      |  |     
|Net loss                                       |  | $    | (1,325,010 | )    |  | $   
|Adjustments to reconcile
      net loss to net |  |      |            |      |  |     
|cash
      provided by operating activities    |  |      |            |      |  |     
|Depreciation and
      amortization            |  |      | 1,270,320  |      |  |     
|Deferred rent                                  |  |      | 152,251    |      |  |     
|Gain on lease
      termination                |  |      | (221,874   | )    |  |     
|Impairment
    charge                          |  |      | 446,042    |      |  |     
|Gain on sale of
      assets                   |  |      | (35,500    | )    |  |     
|Deferred area development
      and            |  |      |            |      |  |     
|franchise
      fee write off                  |  |      | 125,838    |      |  |     
|(Increase) decrease
      in                   |  |      |            |      |  |     
|Receivables                                    |  |      | 7,003      |      |  |     
|Inventories                                    |  |      | (64,080    | )    |  |     
|Prepaid
      expenses                         |  |      | 4,378      |      |  |     
|Increase in                                    |  |      |            |      |  |     
|Accounts
      payable                         |  |      | 751,933    |      |  |     
|Accrued
      expenses                         |  |      | 86,221     |      |  |     
|                                              
|Total
      Adjustments                        |  |      | 2,522,532  |      |  |     
|                                              
|Net
      Cash Provided by                     |  |      |            |      |  |     
|Operating
      Activities                     |  |      | 1,197,522  |      |  |     
|                                              
|Cash Flows from Investing Activities           |  |      |            |      |  |     
|Capital
      expenditures                     |  |      | (171,547   | )    |  |     
|Proceeds from sale of
      assets             |  |      | 35,500     |      |  |     
|                                              
|Net
      Cash Used in                         |  |      |            |      |  |     
|Investing
      Activities                     |  |      | (136,047   | )    |  |     
|                                              
|Cash Flows from Financing Activities           |  |      |            |      |  |     
|Principal payments on
      long-term debt     |  |      | (1,144,423 | )    |  |     
|Ownership
      redemption                     |  |      | (200,000   | )    |  |     
|Member
      contributions                     |  |      | 200,000    |      |  |     
|Distributions to
      noncontrolling interest |  |      | (1,800     | )    |  |     
|                                              
|Net
      Cash Used in                         |  |      |            |      |  |     
|Financing
      Activities                     |  |      | (1,146,223 | )    |  |     
|                                              
|Net (Decrease) Increase in Cash                |  |      | (84,748    | )    |  |     
|                                              
|Cash, Beginning of Year                        |  |      | 660,582    |      |  |     
|                                              
|Cash, End of Year                              |  | $    | 575,834    |      |  | $   

The accompanying notes are an integral
part of the consolidated financial statements.

F-6

---



KremeWorks, LLC and Subsidiary

Consolidated Statements of Changes in
EquityYears Ended December 28, 2011,
December 29, 2010 and December 30, 2009

|                                    |  | KremeWorks, LLC Members'
      Equity |           |             |   |                  |   |                |            |           
|----------------------------------- |  | ------------------------------------- | --------- | ----------- | - | ---------------- | - | -------------- | ---------- | ----------
|                                    |  |                                       |           |             |   |                  |   |                | Kreme-     |           
|                                    |  |                                       |           |             |   |                  |   |                | Works, LLC |           
|                                    |  | Member                                |           | Accumulated |   | Members         |   | Noncontrolling |            | Total     
|                                    |  | Contributions                         |           | Deficit     |   | Equity (Deficit) |   | Interest       |            | Equity    
|Balance, December 31, 2008          |  | $                                     | 4,921,657 |             | $ | (4,603,597       | ) |                | $          | 318,060   
|Net loss                            |  |                                       | -         |             |   | (2,492,345       | ) |                |            | (2,492,345
|Member
      contributions          |  |                                       | 2,003,430 |             |   | -                |   |                |            | 2,003,430 
|                                   
|Balance, December 30, 2009          |  |                                       | 6,925,087 |             |   | (7,095,942       | ) |                |            | (170,855  
|Net loss                            |  |                                       | -         |             |   | (736,323         | ) |                |            | (736,323  
|Member
      contributions          |  |                                       | 922,848   |             |   | -                |   |                |            | 922,848   
|                                   
|Balance, December 29, 2010          |  |                                       | 7,847,935 |             |   | (7,832,265       | ) |                |            | 15,670    
|Net loss                            |  |                                       | -         |             |   | (832,247         | ) |                |            | (832,247  
|Ownership interest
      redemption |  |                                       | -         |             |   | (139,989         | ) |                |            | (139,989  
|Member
      distributions          |  |                                       | -         |             |   | -                |   |                |            | -         
|Member
      contributions          |  |                                       | 962,329   |             |   | -                |   |                |            | 962,329   
|                                   
|Balance, December 28, 2011          |  | $                                     | 8,810,264 |             | $ | (8,804,501       | ) |                | $          | 5,763     

The accompanying notes are an integral
part of the consolidated financial statements.

F-7

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 1 - Industry Operations

KremeWorks, LLC and Subsidiary (the
Company) have franchise rights to develop 23 Krispy Kreme doughnut stores in the
states of Washington, Oregon, Hawaii and Alaska. As of December 28, 2011, the
Company owns and operates 11 Krispy Kreme stores, of which eight are located in
Washington, two are located in Oregon and one is located in Hawaii. The Company
opened its first store on October 30, 2001. The Company opened one store in
2001, two stores in 2002, five stores in 2003 and three stores in 2004.

During 2011, the Company terminated its
lease and franchise agreements related to its Burlington, WA location. Under the
terms of the lease termination agreement, the Company received gross proceeds of
$350,000 subsequent to year-end and was responsible for closing costs including
the landlords closing costs. Net proceeds of $271,104 were received subsequent
to year-end. During 2011, the Company recorded an impairment charge of
approximately $446,000 on the locations property and equipment and a gain on
lease termination of approximately $222,000 as a result of writing off the
deferred rent liability associated with the locations terminated lease. In
accordance with the provisions of the lease termination agreement, the
Burlington, WA store ceased operations on January 8, 2012.

KremeWorks, LLC (KremeWorks) owns 80% of
its subsidiary, KremeWorks USA, LLC (KW USA), which in turn owns 95% of its
subsidiary, KremeWorks Oregon (KWO) and 100% of its subsidiaries, KremeWorks
Washington (KWW), KremeWorks Hawaii (KWH) and KremeWorks Alaska
(KWA).

KremeWorks is owned 67.8% by Stone Dozen,
LLC (Stone Dozen), 25% by Krispy Kreme Doughnut Corporation (KKDC), 3.5% by
partners of Lettuce Entertain You Enterprises, Inc. (Lettuce) and 3.7% by a
member of Stone Dozen.

Note 2 - Summary of Significant Accounting
Policies

Principles of
Consolidation

The consolidated financial statements
include the accounts of KremeWorks and its 80%-owned subsidiary, KW USA. All
significant intercompany balances and transactions have been eliminated.

The Company operating agreements contain a
provision stating that the amount of loss allocated to a member cannot create or
increase a deficit in a members capital account if and to the extent that any
other member has a positive capital account balance. If losses are ever
allocated disproportionately as a result of this arrangement, an equal amount of
subsequent profits will be allocated disproportionately until the members
capital account is in accordance with the members respective interest on a
cumulative basis.

In 2011 and 2010, a disproportionate
amount of KW USAs loss was allocated to the noncontrolling interest of KW USA
to prevent KremeWorks from having a deficit balance in its capital account. A
portion of this allocation, in the amount of $196,320, related to loss that was
incorrectly allocated to KremeWorks in 2009.

In 2011 and 2010, a disproportionate
amount of KWOs loss was allocated to KW USA as the noncontrolling interest of
KWO did not have a positive capital balance. As of December 30, 2009, KW USAs
capital account was in accordance with its ownership interest in KWO on a
cumulative basis.

Fiscal Year

The Company has a 52/53-week fiscal year
ending on the last Wednesday in December. The fiscal years ended on December 28,
2011, December 29, 2010 and December 30, 2009 each contained 52 weeks.

Revenue Recognition

Sales of food and beverages are recognized
as revenue at the point of sale.

F-8

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 2 - Summary of Significant Accounting
Policies (Continued)

Cash

Substantially all cash is held at Bank of
America, N.A. The cash held in this institution may exceed federally insured
limits from time to time. The Company has not experienced any losses in this
account. The Company believes it is not exposed to any significant credit risk
on cash.

Inventories

Inventories are valued at lower of cost
(first-in, first-out) or market.

Property and Equipment

The Companys policy is to depreciate the
cost of property and equipment over the estimated useful lives of the assets
using the straight-line method. The cost of leasehold improvements is amortized
over the remaining term of the lease or the useful lives, if shorter, using the
straight-line method. The average estimated depreciable lives for financial
reporting purposes are as follows:

YearsLeasehold improvements
    
    20Furniture,
      fixtures and equipment
    
    7Automobiles
    
    3Computer
      equipment
    
    3


Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset or asset group (typically a store) might not be
recoverable. If the carrying amount of an asset exceeds its estimated future
undiscounted cash flows, an impairment charge is recognized in the amount by
which the carrying amount exceeds the estimated fair value of the asset. As
previously discussed in Note 1, the Company recognized an impairment charge of
$446,042 on its Burlington, WA store in 2011. The Company also recognized an
impairment charge of $615,000 on one of its Washington stores in 2009. (See Note
3.)

Deferred Area Development and Franchise
Fees

KremeWorks had entered into an area
development agreement with KKDC to develop and operate 23 Krispy Kreme stores.
On March 9, 2011, KKDC provided written confirmation that KremeWorks had no
further obligations under this development agreement. As of the date of these
consolidated financial statements, KremeWorks has no present or future plans to
open additional stores. Therefore, the Company wrote off $120,000 of deferred
area development fees in 2011.

KremeWorks originally paid KKDC a $230,000
development fee, or $10,000 per store. In conjunction with the development
agreement with KKDC, KremeWorks has also entered into a franchise fee agreement
with KKDC whereby KremeWorks is required to pay a $25,000 franchise fee for each
Krispy Kreme store that it opens. The $10,000 per store development fee is
credited toward this franchise fee. These fees are being amortized over the
lives of the respective stores leases on a straight-line basis. During 2011,
the Company wrote off $5,838 of unamortized franchise fees related to the
closing of its Burlington, WA store. As of December 28, 2011 and December 29,
2010, the Company has capitalized area development and franchise fees in the
amount of $250,000 and $395,000, respectively. As of December 28, 2011 and
December 29, 2010, accumulated amortization for area development and franchise
fees totaled $149,773 and $152,602, respectively.

F-9

---



KremeWorks, LLC and
Subsidiary

Notes to Consolidated Financial
Statements

Note 2 - Summary of Significant Accounting
Policies (Continued)

Advertising Costs

Advertising costs are expensed as
incurred. Advertising expense was $221,595, $197,321 and $248,031 in 2011, 2010
and 2009, respectively, and is included in store operating expenses in the
consolidated statements of loss.

Financial Instruments

A financial instrument is cash, evidence
of ownership interest in an entity or certain contracts involving future
conveyances of cash or other financial instruments. The carrying values of the
Companys financial instruments approximate fair value.

Aspects of the Limited Liability
Company

The Company is treated as a partnership
for federal income tax purposes. Consequently, federal income taxes are not
payable by, or provided for, the Company. Members are taxed individually on
their shares of the Companys earnings. Accordingly, the consolidated financial
statements do not reflect a provision for income taxes. The operating agreement provides for the allocation of profits,
losses and distributions in proportion to each members respective interest.

All member units are identical in rights,
preferences and privileges.

The Company has a limited life and,
according to its Articles of Organization, will dissolve no later than December
31, 2052.

Income Taxes

The Companys application of accounting
principles generally accepted in the United States of America (GAAPUSA)
regarding uncertain tax positions had no effect on its financial position as
management believes the Company has no uncertain tax positions. The Company
would account for any potential interest or penalties related to possible future
liabilities for unrecognized income tax benefits as income tax expense. The
Company is no longer subject to examination by tax authorities for federal,
state or local income taxes for periods before 2008.

Management Estimates

The preparation of financial statements in
conformity with GAAPUSA requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Note 3 - Fair Value Measurements

GAAPUSA defines fair value as the price
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants as of the measurement date.
GAAPUSA describes three approaches to measuring the fair value of assets and
liabilities: the market approach, the income approach and the cost approach.
Each approach includes multiple valuation techniques. GAAPUSA does not prescribe
which valuation technique should be used when measuring fair value, but does
establish a fair value hierarchy that prioritizes the inputs used in applying
the various techniques. Inputs broadly refer to the assumptions that market
participants use to make pricing decisions, including assumptions about risk.
Level 1 inputs are given the highest priority in the hierarchy while Level 3
inputs are given the lowest priority.

F-10

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 3 - Summary of Significant Accounting
Policies (Continued)

Assets and liabilities carried at fair
value are classified in one of the following three categories based on the
nature of the inputs used to determine their respective fair values:

- Level 1 - Observable inputs that reflect unadjusted quoted
  prices for identical assets or liabilities in active markets as of the
  reporting date. Active markets are those in which transactions for the asset
  or liability occur in sufficient frequency and volume to provide pricing
  information on an ongoing basis.
- Level 2 - Observable market-based inputs or unobservable
  inputs that are corroborated by market data.
- Level 3 - Unobservable inputs that are not corroborated by
  market data. These inputs reflect managements best estimate of fair value
  using its own assumptions about the assumptions a market participant would
  use in pricing the asset or liability.

As required by GAAPUSA, assets and
liabilities are classified in their entirety based on the lowest level of input
that is significant to the fair value measurement. The Companys assessment of
the significance of a particular input to the fair value measurement requires
judgment, and may affect their placement within the fair value hierarchy levels.

The following table sets forth by level
within the fair value hierarchy the Companys assets that were accounted for at
fair value on a nonrecurring basis as of December 28, 2011:

|               |  | 2011             
|-------------- |  | -----------------
|               |  |                  
|               |  | Fair
      Values
|               |  | as
      of      
|               |  | December 28,     
|Description    |  | 2011             
|Property and   |  |                  
|equipment held |  |                  
|and used       |  | $                

During 2011, the Company wrote-down its
property and equipment associated with its Burlington, WA store. The fair value
reflects the proceeds received in connection with this locations lease
termination agreement which was previously described in Note 1.

The following table sets forth by level
within the fair value hierarchy the Companys assets that were accounted for at
fair value on a nonrecurring basis as of December 30, 2009:

|               |  | 2009             
|-------------- |  | -----------------
|               |  |                  
|               |  | Fair
      Values
|               |  | as
      of      
|               |  | December 30,     
|Description    |  | 2009             
|Property and   |  |                  
|equipment held |  |                  
|and used       |  | $                

F-11

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 3 - Fair Value Measurements (Continued)

During 2009, the Company wrote-down its
property and equipment associated with its Puyallup, Washington store. The fair
value reflected the sales price at which the property and equipment was being
marketed based on local market conditions. The Company was unable to sell the
property and equipment due to the refusal of the landlord to consent to a sale
and assignment of the Companys property and lease. The Company was engaged in
litigation with the landlord in the state of Ohio to determine whether the
landlord had the right to deny consent. Such litigation was settled in the
Companys favor during 2011, but management has decided not to sell this
property and equipment since the Puyallup stores operating results have
improved significantly since 2009.

Note 4 - Inventories

2011
    
    2010Food and beverages
    
    $
    274,172
    
    $
    198,350Packaging
    
    
    65,453
    
    
    59,019Merchandise
    
    
    32,270
    
    
    50,446$
    371,895
    
    $
    307,815


Note 5 - Property and Equipment

2011
    
    2010Leasehold improvements
    
    $
    19,369,967
    
    
    $
    20,622,008Furniture,
      fixtures and equipment
    
    
    13,707,117
    
    
    
    14,383,205Automobiles
    
    
    189,059
    
    
    
    408,468Computer
      equipment
    
    
    160,730
    
    
    
    165,22033,426,873
    
    
    
    35,578,901Less accumulated
      depreciationand amortization
    
    
    (21,146,883
    )
    
    
    (21,770,429
    )$
    12,279,990
    
    
    $
    13,808,472





Note 6 - Long-Term Debt

|                                                                     |  | 2011 |            | 2010
|-------------------------------------------------------------------- |  | ---- | ---------- | ----
|Note payable to Bank of America in monthly
      principal           |  |      |            |     
|installments of $50,994 plus interest at the 30-day LIBOR
      rate |  |      |            |     
|plus 2.50%. A final balloon payment of
      $1,927,733 is due on    |  |      |            |     
|October 31, 2012.                                                    |  | $    | 2,437,677  |     
|Note payable to Bank of America in monthly
      principal           |  |      |            |     
|installments of $29,374 plus interest at the
      30-day LIBOR rate |  |      |            |     
|plus 2.50%. A final balloon payment of
      $1,244,371 is due on    |  |      |            |     
|October 31, 2012.                                                    |  |      | 1,538,112  |     
|Total
      long-term debt                                           |  |      | 3,975,789  |     
|                                                                    
|Less current maturities                                              |  |      | (3,975,789 | )   
|                                                                     |  | $    | -          |     

F-12

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 6 - Long-Term Debt (Continued)

The notes payable to Bank of America were
renewed and amended on October 31, 2011, are collateralized by substantially all
of the Companys assets and are guaranteed by the members of Stone Dozen and by
KKDC up to an aggregate original amount of $10,666,667. Of that amount, the
members of Stone Dozen have personally guaranteed $8,000,000 and KKDC has
guaranteed $2,666,667. The borrowings under these notes are also subject to
certain restrictive covenants including financial covenants related to leverage
and cash flow ratios. It is managements expectation that these notes will be
refinanced in 2012.

Interest expense on the above notes was
$134,133, $173,902 and $264,812 in 2011, 2010 and 2009, respectively.

Total interest expense was $268,530,
$299,557 and $399,023 in 2011, 2010 and 2009, respectively.

Note 7 - Operating Leases

The Company conducts its operations in
facilities under operating leases. Minimum rent is recognized over the term of
the leases using the straight-line method. The Companys substantial investment
in long-lived leasehold improvements was deemed to constitute a penalty under
GAAPUSA in determining the lease term for each lease. In addition to minimum
rent, the leases require the payment of common area expenses and real estate
taxes. Total rental expense for the facilities was $1,728,915, $1,726,135 and
$1,677,048 in 2011, 2010 and 2009, respectively. See Note 1 for information
regarding termination of the lease agreement for the Burlington, WA
location.

The following is a schedule by year of
future minimum lease payments required under the operating leases as of December
28, 2011:

Fiscal Year Ending:2012
    
    
    $
    1,455,8832013
    
    
    
    1,509,4052014
    
    
    
    1,675,5232015
    
    
    
    1,677,4462016
    
    
    
    1,697,070Later years
    
    
    
    11,699,016$
    19,714,343


Note 8 - Related Party Transactions

The Company is affiliated through common
ownership with KremeWorks Canada, LP, Stone Dozen and various entities
associated with Lettuce, as well as Lettuce itself. In the normal course of
business, the affiliated entities transfer inventory and share personnel and
record such transfers at cost.

The Company has entered into a management
agreement with Lettuce and Stone Dozen whereby it pays a management fee for
services provided based on 4% of sales. The management fee amounted to $709,084,
$679,635 and $682,599 for 2011, 2010 and 2009, respectively. Lettuces portion
of this management fee was $137,500 in 2011, 2010 and 2009, with the remainder
payable to Stone Dozen. Services provided include, but are not limited to,
accounting and payroll services, human resources, licensing and marketing. Stone
Dozen also serves as a disbursing agent and paymaster for the Companys payroll.
Lettuce serves as a workers compensation and health insurance administrator in
a group self-insurance program.

In conjunction with the development
agreement between KremeWorks and KKDC described in Note 2, the Company is
required to pay royalty fees to KKDC on a weekly basis equal to 4.5% of gross
sales, excluding wholesale sales, for which the royalty fee is equal to 1.75%.
Royalty fees paid to KKDC totaled $788,576, $753,407 and $769,140 in 2011, 2010
and 2009, respectively.

F-13

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 8 - Related Party Transactions
(Continued)

The Companys franchise agreement with
KKDC requires the Company to purchase furnishings, fixtures, equipment, signs,
doughnut mixes and other supplies that have been approved by KKDC for Krispy
Kreme stores. KKDC is the sole supplier for certain doughnut production
equipment and all doughnut mixes. Purchases from KKDC totaled $4,256,484,
$3,443,303 and $3,136,431 in 2011, 2010 and 2009, respectively. As of December
28, 2011 and December 29, 2010, the amount due to KKDC for the previously
described purchases totaled $350,737 and $359,347, respectively. This liability
is included in the accounts payable to affiliated entities in the Companys
consolidated balance sheets.

As of December 28, 2011 and December 29,
2010, KW USA had a note payable to Stone Dozen in the amount of $2,700,000. The
note is due on demand and bears interest at the prime rate plus 1⁄2%. Interest
expense on this note for 2011, 2010 and 2009 was $100,739, $94,241 and $100,973,
respectively. As of December 28, 2011 and December 29, 2010, KW USA also had a
note payable to KKDC, due on demand in the amount of $900,000, bearing interest
at the prime rate plus 1⁄2%. Interest expense on this note for 2011, 2010 and 2009
was $33,658, $31,414 and $33,658, respectively. The loans from Stone Dozen and
KKDC are pursuant to an agreement between the two companies and are in amounts
that approximate the ratio of their respective ownership interests in KW USA.

A member of Stone Dozen is an attorney and
his law firm provides legal services to the Company. The total expense for these
services was $79,826, $26,689 and $253 for 2011, 2010 and 2009, respectively.

See Note 9 for additional related party
transactions.

Note 9 - Other Cash Flow Information

Cash paid for interest amounted to
$137,763, $178,375 and $296,637 for 2011, 2010 and 2009, respectively.

During 2011, Stone Dozen and KKDC made
capital contributions in the amounts of $571,747 and $190,582, respectively, by
forgiving amounts owed to them by the Company.

During 2010, Stone Dozen and KKDC made
capital contributions in the amounts of $542,136 and $180,712, respectively, by
forgiving amounts owed to them by the Company.

During 2009, Stone Dozen and KKDC made
capital contributions in the amounts of $546,322 and $182,108, respectively, by
forgiving amounts owed to them by the Company.

During 2009, there were capital
contributions totaling $1,275,000, of which $239,800 was a receivable at
year-end. Payment was received in January 2010.

Note 10 - Ownership Redemption

An officers employment with the Company
terminated on November 16, 2005, and the Company had been accruing a $25,014
liability for the officers 5% restricted interest since that time. This amount
was calculated based on an agreement between the officer and the Company, but
the officer questioned the amount and filed a complaint in the state of
Washington contesting the valuation. In 2011, the Company reached a settlement
with the former officer for an amount of $200,000. The $174,986 difference
between the settlement amount and the original accrual has been recognized as
ownership redemption in the Companys 2011 consolidated statement of changes in
equity.

F-14

---



KremeWorks, LLC and Subsidiary

Notes to Consolidated Financial
Statements

Note 11 - Status of Operations

The Company has experienced significant
losses over the last seven years. While the Company is still generating positive
cash flows from operations, members of KremeWorks made significant cash
contributions to enable the Company to meet its cash flow needs and debt service
requirements in 2011, 2010 and 2009. The Companys current debt agreement with
Bank of America expires on October 31, 2012 at which time approximately
$3,700,000 in principal payments will become due. Management believes that it
will be able to negotiate a new debt agreement with Bank of America or a similar
institution. Management also believes operating cash flows will recover in the
near future to a level that will allow the Company to meet its ongoing cash flow
needs.

In the event that managements
expectations mentioned above are not realized, alternative sources of financing
might be required for the Company to continue operations beyond the near term.

Note 12 - Subsequent Events

The Company has evaluated subsequent
events through March 26, 2012, the date the 2011 consolidated financial
statements were available to be issued, and March 25, 2011 with respect to the
comparative 2010 consolidated financial statements.

F-15

---