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Serving more than
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00:00:03,394 --> 00:00:05,179
three million customers a day,
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00:00:05,266 --> 00:00:06,745
doughnuts are an industry
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00:00:06,876 --> 00:00:08,878
worth over $7 billion.
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00:00:10,880 --> 00:00:12,838
Today, New York City
has a Dunkin' Donuts
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00:00:12,925 --> 00:00:16,277
nearly every five blocks,
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but in the early 20th century,
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doughnuts are far from common.
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The doughnut was
not really popular,
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00:00:24,372 --> 00:00:27,723
known, understood, or
even available in America.
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Until
two dropouts...
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00:00:30,595 --> 00:00:31,596
We're gonna
make the best doughnuts
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you've ever tasted.
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00:00:34,599 --> 00:00:37,428
Build one of
the country's first chains,
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00:00:37,515 --> 00:00:39,561
turning doughnuts
into an industry.
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00:00:41,606 --> 00:00:44,174
But not far behind are
two food truck owners
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with a dream of building
a franchising empire.
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You want us to sell 32
different flavors of doughnuts?
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00:00:49,223 --> 00:00:50,093
No!
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00:00:50,224 --> 00:00:51,181
52.
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00:00:51,268 --> 00:00:52,052
Kicking off a race
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to bring doughnuts to the world.
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They were putting
quantity over quality.
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I think they know
they can't beat us.
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They'll
reinvent breakfast
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and give America
the coffee break.
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Dunkin' Donuts
finds themselves
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at this make or break point
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where they need something
to propel them over the top.
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And one partnership
won't survive the ride.
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What are you doing?
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It's 1937,
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and Americans have been living
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through the economic misery
of the Great Depression
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for nearly a decade.
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People are really
short on cash.
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They're looking for
ways to get a meal
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however they can.
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00:01:59,902 --> 00:02:01,121
Hershey's has Mr. Goodbar,
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which has a lot
of peanuts in it.
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00:02:02,644 --> 00:02:04,515
Five cents makes a great lunch.
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00:02:04,602 --> 00:02:06,735
It's interesting to see
these different products
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00:02:06,865 --> 00:02:11,566
being kind of reinvented as
lunch instead of just a treat
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because people were
hungry out there.
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00:02:15,831 --> 00:02:17,485
Snacks
like Moon Pies,
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3 Musketeers bars and Ritz
crackers begin to catch on.
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00:02:22,838 --> 00:02:23,795
During the depression,
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you suddenly have entrepreneurs
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creating snacks for
three cents or a nickel
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that were original, fun to
eat, not expensive, filling.
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In
Winston-Salem, North Carolina,
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two brothers are
looking to capitalize
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on the cheap snack craze,
but with something new.
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Vernon Rudolph has spent weeks
crisscrossing the country,
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searching for the perfect
place to start his business.
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This place is just great.
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It really is, isn't it?
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No!
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Vernon Rudolph and
his brother, Lewis,
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00:03:12,888 --> 00:03:14,716
by the time they got
to Winston-Salem,
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they had $25, but
Vernon was intuitive.
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He was driven.
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00:03:19,851 --> 00:03:22,767
Lewis was maybe a
little more reserved,
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but they complemented
each other.
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So, what are you
planning on doing here?
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We're gonna make the best
doughnuts you've ever tasted.
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The likely origin of the
doughnut in the United States
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is from the Dutch immigrant
food called oily cakes.
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They're these fried little cakes
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that really get their start
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00:03:50,404 --> 00:03:52,928
with the Dutch
colony in New York.
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The modern
cake-style doughnut
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starts developing a
following during World War I.
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The Salvation Army
Lassies, as they were called,
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00:04:06,985 --> 00:04:09,684
on the front lines and
they're trying to make treats
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for the boys in the trenches.
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They have white flour, they
have lard, they have sugar,
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00:04:16,168 --> 00:04:18,432
then they think, "Well,
let's make doughnuts," right?
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This is enables these soldiers
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00:04:21,435 --> 00:04:23,959
to get a taste for doughnuts,
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00:04:24,089 --> 00:04:27,092
but it really isn't
the popular treat.
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Even though
the doughnut is dubbed
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Food of the Century at
the 1934 World's Fair,
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three years later, they
still haven't caught on.
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The doughnut is
lost in the shadows
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with the other cupcakes
and cakes and baked goods
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that are sold in local
neighborhood bakeries.
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But Rudolph
believes he's found
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the perfect place to open shop.
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I need this
month's rent upfront.
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00:04:59,429 --> 00:05:00,735
What brings you
to Winston-Salem?
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00:05:02,345 --> 00:05:04,695
He read the name off
a pack of cigarettes.
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00:05:07,655 --> 00:05:09,744
As they were out
searching for a place,
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Vernon found himself
in Peoria, Illinois
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00:05:12,268 --> 00:05:15,315
on a street corner,
and pulled a pack
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00:05:15,402 --> 00:05:17,795
of camel cigarettes
out of his pocket.
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And he saw on the package
Winston-Salem, North Carolina.
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00:05:22,670 --> 00:05:24,933
And he thought, "Well
if they can support
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00:05:25,020 --> 00:05:27,501
the national cigarette
industry like that,
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00:05:29,024 --> 00:05:30,939
we should be able
to make it there."
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00:05:31,069 --> 00:05:32,462
While most
industries struggled
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00:05:32,549 --> 00:05:34,812
to stay afloat,
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00:05:34,899 --> 00:05:38,642
tobacco remained big business
during the Great Depression,
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00:05:38,729 --> 00:05:41,689
as cigarette use
increased by 65%.
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00:05:44,953 --> 00:05:47,564
And with one of the nation's
largest cigarette factories
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00:05:47,651 --> 00:05:51,046
just down the street,
Rudolph sees opportunity.
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It's 21, 22-
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00:05:56,443 --> 00:05:58,662
Vernon Rudolph
sinks his last dollar
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00:05:58,749 --> 00:06:01,186
into opening a doughnut factory.
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00:06:01,273 --> 00:06:04,929
So, Vernon Rudolph's
dream was to turn doughnuts
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00:06:05,060 --> 00:06:07,541
into an industry, and he
was driven to do that.
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00:06:09,891 --> 00:06:11,632
He had a vision for
what this could be.
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00:06:17,289 --> 00:06:19,596
To do it,
Vernon is using a recipe
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00:06:19,683 --> 00:06:21,381
borrowed from his
uncle's bakery,
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00:06:23,295 --> 00:06:25,994
and it's one he believes
can produce a doughnut
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00:06:26,124 --> 00:06:29,432
different than anything
available at the time.
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00:06:29,519 --> 00:06:31,739
This recipe that
his uncle bought
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00:06:31,826 --> 00:06:33,393
from this New Orleans chef
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was a yeast-risen doughnut
that contains potato in it,
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00:06:38,006 --> 00:06:42,227
which gives it this very
unique, soft, sweet pliability,
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00:06:42,358 --> 00:06:46,406
really unlike any pastry or
any baked good experience.
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00:06:46,536 --> 00:06:49,757
You put it in your mouth and
it quite literally liquefies
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when it hits your tongue.
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00:06:52,847 --> 00:06:54,849
The original recipe calls for
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00:06:54,936 --> 00:06:56,633
the development of a cream base.
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00:06:56,720 --> 00:06:58,679
And when that was
added to flour,
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00:06:58,766 --> 00:07:01,116
it made the dough, that
when fried, was crispy.
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00:07:03,727 --> 00:07:06,687
And so, seizing on the
opportunities presented
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00:07:06,774 --> 00:07:08,950
by the vast success of
the tobacco industry
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00:07:09,080 --> 00:07:10,952
in Winston-Salem,
North Carolina,
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00:07:12,301 --> 00:07:14,738
Vernon Rudolph opens
the doughnut company
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00:07:14,869 --> 00:07:16,784
that would eventually change
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00:07:16,871 --> 00:07:18,438
the doughnut universe
as we know it.
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00:07:21,615 --> 00:07:23,312
Krispy
Kreme will give rise
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00:07:24,356 --> 00:07:26,402
to a $40 billion industry,
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00:07:27,882 --> 00:07:30,145
selling seven and a half
million doughnuts a day
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00:07:31,276 --> 00:07:34,062
across 12,000 locations.
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00:07:38,936 --> 00:07:43,114
But for now, the Rudolphs'
customers are limited
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00:07:43,245 --> 00:07:47,031
to grocers willing to stock
this new type of doughnut.
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00:07:47,162 --> 00:07:49,512
And with orders
barely trickling in,
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00:07:49,599 --> 00:07:51,296
they can't pay
next month's rent.
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00:07:51,427 --> 00:07:53,168
At that time, Krispy Kreme
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00:07:53,298 --> 00:07:56,476
was solely a wholesale business.
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They would make the doughnuts
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00:07:57,738 --> 00:07:59,696
and sell them to local markets.
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00:07:59,783 --> 00:08:04,222
So, they depended
on other people
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00:08:04,353 --> 00:08:06,050
to sell their doughnuts.
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00:08:06,181 --> 00:08:08,705
And that is, and
probably will always be,
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00:08:08,792 --> 00:08:11,099
a super difficult
way to succeed.
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00:08:12,100 --> 00:08:13,493
So, if you can imagine,
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00:08:13,580 --> 00:08:15,364
there were no
doughnut shops, right?
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00:08:15,451 --> 00:08:16,974
That wasn't a thing.
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00:08:17,061 --> 00:08:20,369
And Americans were familiar
with bakeries, right?
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00:08:20,500 --> 00:08:22,763
So there wasn't like
a standalone place
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00:08:22,850 --> 00:08:24,199
that you could get a doughnut.
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00:08:27,419 --> 00:08:28,899
Come on.
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00:08:36,864 --> 00:08:38,387
I'm sorry, you can
only get our doughnuts
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00:08:38,474 --> 00:08:39,823
at the local grocer.
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00:08:39,910 --> 00:08:40,650
I'm so sorry.
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00:08:40,737 --> 00:08:42,783
No!
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00:08:42,870 --> 00:08:44,001
Is that another one?
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00:08:44,088 --> 00:08:46,003
Yup, fifth time this morning.
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They're mostly the workers
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from the cigarette
factory up the street.
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00:08:49,267 --> 00:08:50,921
Keep saying that they
can smell the doughnuts
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00:08:51,052 --> 00:08:52,619
every time they step
out for a break.
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00:08:55,186 --> 00:08:56,797
Could have sold them one.
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00:08:56,884 --> 00:08:58,973
You sell to one, you
gotta sell to all of them.
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00:08:59,103 --> 00:09:00,714
We can't have people
knocking on the door all day.
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00:09:00,844 --> 00:09:02,629
We'll never get anything done.
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00:09:02,716 --> 00:09:03,499
Right.
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00:09:05,457 --> 00:09:06,241
Right.
- Look.
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00:09:07,590 --> 00:09:10,071
We make the doughnuts,
the grocers sell 'em.
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Hmm?
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00:09:12,029 --> 00:09:13,204
When you start a business,
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00:09:13,335 --> 00:09:14,205
there is gonna be failures,
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00:09:14,292 --> 00:09:16,033
there's gonna be difficulties.
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00:09:16,164 --> 00:09:18,470
You have to kind of visualize
what the world might be
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00:09:18,601 --> 00:09:20,908
and pivot, and shift,
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00:09:22,562 --> 00:09:24,520
because not everything is gonna
go according to your plan.
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00:09:28,480 --> 00:09:31,266
Retail wasn't something
that was on the radar,
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00:09:31,396 --> 00:09:33,485
but Vernon was opportunistic.
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00:09:33,616 --> 00:09:35,226
He looked for any
way that he could,
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00:09:35,357 --> 00:09:36,793
you know, sell a doughnut.
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00:10:02,645 --> 00:10:05,256
What are you doing?
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00:10:05,343 --> 00:10:06,606
Putting in a service window.
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00:10:10,348 --> 00:10:13,482
Krispy Kreme
breaks into the retail market,
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00:10:13,613 --> 00:10:15,571
hoping it's a big
step towards creating
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00:10:15,658 --> 00:10:17,878
the country's first
doughnut store chain.
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00:10:19,836 --> 00:10:23,013
But they don't know
that another visionary
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00:10:23,144 --> 00:10:26,234
with the same idea
is lying in wait.
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00:10:37,985 --> 00:10:40,944
There you go,
sir, half a dozen, enjoy.
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00:10:41,031 --> 00:10:43,686
10 Years before
the drive-through is invented,
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00:10:43,817 --> 00:10:46,210
Vernon Rudolph turns
his doughnut factory
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00:10:46,341 --> 00:10:48,822
into a store with
a service window.
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00:10:48,952 --> 00:10:50,693
It was a stroke of genius
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00:10:50,780 --> 00:10:53,914
to move from
wholesale to retail,
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00:10:54,044 --> 00:10:58,179
because as good as the
Krispy Kreme doughnut is,
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00:10:58,309 --> 00:11:00,094
when you buy it at a market,
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00:11:00,224 --> 00:11:02,879
there is nothing like
getting a Krispy Kreme
201
00:11:02,966 --> 00:11:05,055
from a Krispy Kreme.
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00:11:05,186 --> 00:11:07,754
When hot, the Krispy
Kreme doughnut
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00:11:07,841 --> 00:11:10,191
is nothing short
of transcendent.
204
00:11:10,321 --> 00:11:11,801
And there you are.
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00:11:11,932 --> 00:11:14,021
The move
catapults Krispy Kreme
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00:11:14,151 --> 00:11:16,240
into a Winston-Salem landmark
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00:11:16,371 --> 00:11:18,025
as the service
window becomes a boom
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00:11:18,112 --> 00:11:19,548
for Rudolph's bottom line.
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00:11:21,028 --> 00:11:22,856
At the time,
doughnuts were sold
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00:11:22,986 --> 00:11:25,510
20 cents a dozen in wholesale.
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00:11:25,597 --> 00:11:28,470
Doughnuts at retail were
sold 25 cents to the dozen.
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00:11:28,600 --> 00:11:29,558
Doing great, guys.
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00:11:30,907 --> 00:11:33,040
Now, 16
years before McDonald's
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00:11:33,170 --> 00:11:35,303
begins their franchising empire,
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00:11:35,390 --> 00:11:38,872
Rudolph eyes opening more
hybrid doughnut factory stores.
216
00:11:40,700 --> 00:11:42,223
And this might be
the perfect time.
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00:11:46,401 --> 00:11:49,578
A growing political movement
could have a drastic effect
218
00:11:49,665 --> 00:11:52,233
on the doughnut's
chance for success.
219
00:11:52,320 --> 00:11:54,365
The unionization
movement in America
220
00:11:54,452 --> 00:11:56,454
really develops in this period
221
00:11:56,585 --> 00:11:59,109
and unions were designed
on the part of workers
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00:11:59,240 --> 00:12:01,242
to be able to ensure
that their rights
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00:12:01,329 --> 00:12:02,591
are gonna be respected.
224
00:12:04,419 --> 00:12:06,726
In response
to union concerns,
225
00:12:06,856 --> 00:12:10,338
the federal government sets
restrictions on employers,
226
00:12:10,425 --> 00:12:13,558
and enacts the Fair
Labor and Standards Act,
227
00:12:13,689 --> 00:12:17,519
resulting in an eight-hour
workday, 30-minute lunch breaks,
228
00:12:17,649 --> 00:12:22,393
and more and more employers
offering workers break times.
229
00:12:23,351 --> 00:12:24,787
This is gonna
create new markets,
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00:12:24,918 --> 00:12:26,180
new opportunities
for entrepreneurs
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00:12:26,310 --> 00:12:29,183
seeking to speak to that
market specifically.
232
00:12:29,313 --> 00:12:31,533
And who's there to deliver
food in that break,
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00:12:31,620 --> 00:12:34,449
who could do so in 10 minutes
before you get back to work?
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00:12:37,060 --> 00:12:39,759
Krispy Kreme
starts expanding to new markets,
235
00:12:42,283 --> 00:12:43,763
while outside of Boston,
236
00:12:45,765 --> 00:12:49,246
Bill Rosenberg and his business
partner, Harry Winouker,
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00:12:49,333 --> 00:12:51,292
run a successful
food truck business,
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00:12:53,120 --> 00:12:55,557
selling sandwiches,
pastries, and coffee
239
00:12:55,687 --> 00:12:57,777
to workers on their breaks.
240
00:13:01,911 --> 00:13:03,826
Bill Rosenberg grew up
in the suburbs of Boston,
241
00:13:03,913 --> 00:13:05,480
and he needed to
drop out of school
242
00:13:05,610 --> 00:13:07,047
to help support his family.
243
00:13:08,700 --> 00:13:11,399
So as an eighth
grader, 14 years old,
244
00:13:11,529 --> 00:13:15,229
he has to deliver
telegrams and do odd jobs.
245
00:13:15,316 --> 00:13:18,101
He learned how to
be resourceful.
246
00:13:18,188 --> 00:13:20,538
By 1946,
they're making enough money
247
00:13:20,669 --> 00:13:22,714
to open their first brick
and mortar location,
248
00:13:22,802 --> 00:13:24,238
but with a unique twist.
249
00:13:26,022 --> 00:13:28,851
So Bill notices that
coffee and doughnuts
250
00:13:28,938 --> 00:13:32,072
make a 40% of their sales.
251
00:13:32,159 --> 00:13:34,552
He gets the idea that
they should create
252
00:13:34,683 --> 00:13:37,381
a new brand around
coffee and doughnuts.
253
00:13:37,512 --> 00:13:39,166
And he firmly believes
254
00:13:39,253 --> 00:13:41,690
that he can spread that
across the country.
255
00:13:43,039 --> 00:13:44,606
Bill understands that workers
256
00:13:44,693 --> 00:13:46,347
only had a small window of time,
257
00:13:46,477 --> 00:13:48,566
and people wanted
on-the-go foods,
258
00:13:48,653 --> 00:13:50,307
but this is a gamble.
259
00:13:50,438 --> 00:13:52,788
I mean, there weren't
doughnut shops
260
00:13:52,875 --> 00:13:54,703
and there were barely
even coffee shops.
261
00:13:54,834 --> 00:13:55,878
Coffee was a dream.
262
00:13:55,965 --> 00:13:56,836
It wasn't a place.
263
00:14:01,753 --> 00:14:02,798
A little closer to you.
264
00:14:02,885 --> 00:14:03,930
A little more.
265
00:14:04,017 --> 00:14:05,496
Okay, that's perfect.
266
00:14:05,583 --> 00:14:09,065
Harry Winouker is Bill
Rosenberg's brother-in-law.
267
00:14:09,152 --> 00:14:13,591
He owns about quarter of the
company and he's a numbers guy.
268
00:14:13,722 --> 00:14:18,161
Not really the ambitious
entrepreneur that Bill is.
269
00:14:18,248 --> 00:14:20,685
So there's already a little
bit of built-in tension.
270
00:14:24,385 --> 00:14:25,386
How's it looking.
271
00:14:25,473 --> 00:14:26,648
So far, so good.
272
00:14:26,735 --> 00:14:28,650
Should be able to open
in a week on schedule.
273
00:14:30,043 --> 00:14:31,174
Can you be here
tomorrow morning?
274
00:14:31,261 --> 00:14:32,436
We have a bread
delivery at eight,
275
00:14:32,567 --> 00:14:33,829
cheese and butter
coming at 8:30.
276
00:14:33,960 --> 00:14:35,135
Oh, I canceled those.
277
00:14:36,876 --> 00:14:38,138
What do you mean canceled?
278
00:14:38,225 --> 00:14:40,618
We're selling only
our two best items.
279
00:14:40,705 --> 00:14:41,793
Bill, you can't just
sell doughnuts and coffee.
280
00:14:41,881 --> 00:14:43,099
That's not even a full meal.
281
00:14:43,186 --> 00:14:44,231
That's the whole
point, it's a snack.
282
00:14:44,318 --> 00:14:45,797
It's a quick breakfast.
283
00:14:45,885 --> 00:14:48,278
People can sit and eat
for five or 10 minutes,
284
00:14:48,365 --> 00:14:50,193
or they can take it to
go and eat in their cars.
285
00:14:50,280 --> 00:14:52,935
And you just can't decide
this without talking to me.
286
00:14:53,066 --> 00:14:55,329
You don't get
it, but you will.
287
00:15:00,029 --> 00:15:01,901
Despite his
partner's objections,
288
00:15:04,816 --> 00:15:06,514
Rosenberg sinks all the profits
289
00:15:06,644 --> 00:15:08,298
from their food truck business
290
00:15:08,429 --> 00:15:10,605
into this novel coffee
and doughnut shop.
291
00:15:15,262 --> 00:15:18,352
He goes to the
highest-end Boston hotels,
292
00:15:18,482 --> 00:15:21,224
and he finds out where
they get their coffee from.
293
00:15:21,311 --> 00:15:24,401
And it's a company called
La Terrain Coffee Company,
294
00:15:24,488 --> 00:15:27,883
because he believes that
high-quality product
295
00:15:27,970 --> 00:15:30,755
is what's going to
sell to the consumer.
296
00:15:30,842 --> 00:15:35,325
He also charges, initially,
10 cents for a cup of coffee,
297
00:15:35,456 --> 00:15:38,285
which was twice the
going rate at the time.
298
00:15:39,982 --> 00:15:41,679
This is an idea that Starbucks
299
00:15:41,810 --> 00:15:43,464
is gonna take to the bank later.
300
00:15:45,727 --> 00:15:47,163
Rosenberg's
vision will spawn
301
00:15:47,250 --> 00:15:49,644
the second largest
restaurant chain in America,
302
00:15:51,428 --> 00:15:53,343
serving three million
customers a day
303
00:15:53,430 --> 00:15:55,476
and worth over $9 billion.
304
00:15:58,653 --> 00:16:04,746
But in 1948, Rosenberg and
Winouker unveiled their first
305
00:16:04,833 --> 00:16:07,488
of what will become
over 13,000 locations,
306
00:16:08,837 --> 00:16:10,665
right now called
307
00:16:13,755 --> 00:16:15,235
Open Kettle.
308
00:16:20,066 --> 00:16:23,330
You make doughnuts in a large
vat called an open kettle.
309
00:16:24,940 --> 00:16:29,292
Open Kettle was the
original name, but not really,
310
00:16:30,380 --> 00:16:31,468
what's the word, a good name?
311
00:16:33,122 --> 00:16:35,124
Isn't an open
kettle like, you know,
312
00:16:35,211 --> 00:16:37,126
200 degrees of burning hot oil,
313
00:16:37,213 --> 00:16:39,302
like, is that what
customers want?
314
00:16:39,389 --> 00:16:40,608
I don't know.
315
00:16:40,695 --> 00:16:41,870
But sales weren't
really happening.
316
00:16:44,525 --> 00:16:47,354
While Open Kettle
gets off to a shaky start,
317
00:16:55,536 --> 00:16:56,841
by 1948,
318
00:16:59,757 --> 00:17:02,891
Krispy Kreme has grown
to seven locations,
319
00:17:02,978 --> 00:17:05,981
serving thousands of customers
warm, fresh doughnuts
320
00:17:06,068 --> 00:17:07,809
direct from the factory floor.
321
00:17:08,897 --> 00:17:11,291
The idea of a warm doughnut,
322
00:17:11,421 --> 00:17:13,684
I mean, I would just
microwave the cold doughnuts,
323
00:17:13,771 --> 00:17:16,122
but Krispy Kreme
created a revolution
324
00:17:16,209 --> 00:17:17,384
when it comes to doughnuts.
325
00:17:21,518 --> 00:17:23,129
But making
the doughnuts by hand
326
00:17:23,216 --> 00:17:24,478
presents challenges.
327
00:17:25,957 --> 00:17:27,611
I picked these up from
each of our factories.
328
00:17:27,698 --> 00:17:28,569
You see the problem.
329
00:17:39,058 --> 00:17:39,884
They're different?
330
00:17:41,538 --> 00:17:42,800
Not necessarily a bad thing.
331
00:17:42,887 --> 00:17:43,584
Of course, it is.
332
00:17:46,195 --> 00:17:46,978
When you're cooking
for a business,
333
00:17:47,109 --> 00:17:48,937
you have to be
consistent all the time,
334
00:17:49,024 --> 00:17:50,069
'cause just think
about the first time
335
00:17:50,156 --> 00:17:51,026
you went to a
restaurant and you had
336
00:17:51,113 --> 00:17:53,159
the most awesome whatever it is,
337
00:17:53,246 --> 00:17:55,465
and when you go back again
and it's not the same,
338
00:17:55,596 --> 00:17:58,729
it's very important from
day one it's the same bite
339
00:17:58,860 --> 00:18:01,341
going to the same
person all the time.
340
00:18:01,471 --> 00:18:03,299
Consistency, right?
341
00:18:03,386 --> 00:18:05,258
That's who we are.
342
00:18:05,345 --> 00:18:07,434
Walk into any Krispy
Kreme and it's the same
343
00:18:07,521 --> 00:18:10,741
fresh, warm doughnuts
at ever single location,
344
00:18:10,828 --> 00:18:12,221
as if we made them ourselves.
345
00:18:14,093 --> 00:18:15,746
Good luck being in
10 places at once.
346
00:18:16,921 --> 00:18:18,836
Maybe I don't have to be.
347
00:18:22,275 --> 00:18:24,015
There's so many variables
348
00:18:24,146 --> 00:18:26,714
in making a baked
product like this.
349
00:18:26,801 --> 00:18:29,064
The doughnuts were
made by treating dough
350
00:18:29,151 --> 00:18:30,674
and cutting one by hand,
351
00:18:30,761 --> 00:18:32,372
and the doughnuts
were dropped in,
352
00:18:32,502 --> 00:18:34,635
they had to turn 'em with
a drumstick one at a time.
353
00:18:34,722 --> 00:18:36,767
So, no two were the same.
354
00:18:43,687 --> 00:18:46,821
He knew there had
to be a better way
355
00:18:46,908 --> 00:18:49,476
to have the same
doughnut in every store.
356
00:18:51,608 --> 00:18:53,175
If Rudolph
wants to be the first
357
00:18:53,306 --> 00:18:55,830
to mass-produce
doughnuts for the nation,
358
00:18:55,917 --> 00:18:58,572
he'll need to reinvent
how they're made.
359
00:19:10,453 --> 00:19:12,325
In Massachusetts...
360
00:19:12,412 --> 00:19:13,239
At the rate we're
going, we'll be
361
00:19:13,326 --> 00:19:15,284
out of money in another week.
362
00:19:15,371 --> 00:19:17,982
By 1949,
Bill Rosenberg's
363
00:19:18,069 --> 00:19:20,028
innovative coffee
and doughnut shop,
364
00:19:20,115 --> 00:19:22,596
Open Kettle, is
failing to catch on.
365
00:19:24,206 --> 00:19:26,469
I hate to
say, I told you so.
366
00:19:26,556 --> 00:19:28,123
There is so much on the line
367
00:19:28,210 --> 00:19:30,299
for Bill Rosenberg
at this moment.
368
00:19:30,386 --> 00:19:34,390
He has staked his
career on this idea
369
00:19:34,521 --> 00:19:37,176
of coffee and doughnuts
and on this restaurant.
370
00:19:38,351 --> 00:19:39,613
And there's no stopping Bill
371
00:19:39,743 --> 00:19:41,180
when he has an idea in his head.
372
00:19:44,095 --> 00:19:47,142
I had dinner at the
Howard Johnson's last night.
373
00:19:47,229 --> 00:19:48,796
They have 28 flavors
of ice cream.
374
00:19:49,666 --> 00:19:51,233
28.
375
00:19:51,320 --> 00:19:53,235
That's a huge variety.
376
00:19:53,366 --> 00:19:55,194
How many flavors of
doughnut can you think of?
377
00:19:55,281 --> 00:19:57,587
Plain, glazed,
yeasted and a cruller.
378
00:19:57,674 --> 00:19:58,501
That's all anyone has.
379
00:19:58,632 --> 00:20:00,155
Exactly.
380
00:20:00,286 --> 00:20:02,418
I have 32 so far.
381
00:20:02,505 --> 00:20:04,594
So you want us to sell 32
different flavors of doughnuts?
382
00:20:04,725 --> 00:20:05,552
No!
383
00:20:05,682 --> 00:20:06,466
52.
384
00:20:07,684 --> 00:20:10,296
52, that's insane.
385
00:20:10,383 --> 00:20:13,690
People could come in here
once a week for a whole year,
386
00:20:13,777 --> 00:20:15,214
try a different
doughnut every time.
387
00:20:16,519 --> 00:20:17,651
No one else is doing that.
388
00:20:31,621 --> 00:20:33,014
That's great.
389
00:20:33,144 --> 00:20:34,755
Let's call it a chocolate cake.
390
00:20:36,887 --> 00:20:38,933
It was really
kind of capturing
391
00:20:39,020 --> 00:20:41,240
what people desired in food.
392
00:20:41,327 --> 00:20:42,241
Options, right?
393
00:20:42,371 --> 00:20:43,938
So they weren't just crullers,
394
00:20:44,068 --> 00:20:45,766
and they weren't just glazed,
395
00:20:45,896 --> 00:20:48,029
and they weren't just chocolate.
396
00:20:48,116 --> 00:20:49,248
They were everything.
397
00:20:49,378 --> 00:20:51,598
You want nuts, we'll do nuts.
398
00:20:51,728 --> 00:20:53,600
You want caramel,
we'll do caramel.
399
00:20:53,687 --> 00:20:55,428
He brought this whole idea
400
00:20:55,515 --> 00:20:58,518
of product development
to doughnuts.
401
00:20:58,605 --> 00:20:59,736
Jelly.
402
00:20:59,823 --> 00:21:00,563
Is that raspberry?
403
00:21:01,695 --> 00:21:03,131
Let's do another
with strawberry,
404
00:21:04,480 --> 00:21:06,743
then do raspberry
and strawberry again,
405
00:21:08,092 --> 00:21:09,442
but for put sugar
on the outside.
406
00:21:09,572 --> 00:21:10,921
Hm?
407
00:21:11,008 --> 00:21:11,792
Hm.
408
00:21:13,184 --> 00:21:16,405
He's innovating
on a culinary level.
409
00:21:16,492 --> 00:21:19,930
Would we have a bacon
maple doughnut today,
410
00:21:20,017 --> 00:21:21,628
and all these other
kinds of varieties
411
00:21:21,715 --> 00:21:23,369
if there was no Bill Rosenberg?
412
00:21:23,499 --> 00:21:24,457
Probably not.
413
00:21:26,241 --> 00:21:27,938
As Rosenberg tries
to turn his business around
414
00:21:28,025 --> 00:21:30,158
with an unmatched
amount of variety,
415
00:21:36,686 --> 00:21:38,209
Vernon Rudolph...
416
00:21:38,297 --> 00:21:40,734
Here you go,
sir, half a dozen, enjoy.
417
00:21:40,821 --> 00:21:42,997
Relentlessly
searches for a better way
418
00:21:44,520 --> 00:21:46,870
to make his perfect
Krispy Kreme doughnut
419
00:21:46,957 --> 00:21:48,307
the same everywhere.
420
00:21:50,918 --> 00:21:54,617
Food entrepreneurs are people
who believe in their recipe,
421
00:21:54,704 --> 00:21:57,316
who believe in their product,
422
00:21:57,403 --> 00:22:02,408
who spend years developing and
crafting something perfect.
423
00:22:03,844 --> 00:22:05,846
And so you really have to
admire that dedication.
424
00:22:07,326 --> 00:22:08,849
I can't believe
you built this thing.
425
00:22:11,025 --> 00:22:12,461
How does it work?
426
00:22:14,681 --> 00:22:17,161
You want to use the
right amount of dough,
427
00:22:17,292 --> 00:22:19,294
to keep track of
your ingredients,
428
00:22:19,381 --> 00:22:22,689
and you want every doughnut
to be as consistent
429
00:22:22,776 --> 00:22:25,126
in terms of size,
shape, and execution
430
00:22:25,256 --> 00:22:26,954
as the last one they had.
431
00:22:27,041 --> 00:22:28,869
It's impossible to
do that by hand,
432
00:22:28,956 --> 00:22:31,088
no matter how well
trained the baker.
433
00:22:31,175 --> 00:22:33,221
Well, that's where
automation comes in.
434
00:22:35,615 --> 00:22:37,138
Dough goes in here, right?
435
00:22:37,268 --> 00:22:40,054
It comes out over here and
into the oil, then rinks.
436
00:22:40,141 --> 00:22:42,317
Then these paddles take
the frying doughnuts
437
00:22:42,404 --> 00:22:44,754
and they flip them over
at just the right time.
438
00:22:49,716 --> 00:22:51,152
Rudolph's
cutting-edge machine
439
00:22:51,239 --> 00:22:53,067
is the first to fully automate
440
00:22:53,197 --> 00:22:55,069
the entire
doughnut-making process.
441
00:22:56,679 --> 00:22:59,073
He calls it the
Ring-King Junior.
442
00:23:00,683 --> 00:23:02,816
And not only does it
produce uniform doughnuts,
443
00:23:02,903 --> 00:23:06,559
but it can churn out
over 700 of them an hour.
444
00:23:06,689 --> 00:23:08,561
It was all about
mass production.
445
00:23:08,648 --> 00:23:11,520
I mean, this is visionary.
446
00:23:11,607 --> 00:23:15,916
The ingenuity involved made a
lot of noise in the industry.
447
00:23:17,526 --> 00:23:19,310
His
automated process remains
448
00:23:19,398 --> 00:23:21,400
the standard in
doughnut-making today.
449
00:23:23,097 --> 00:23:24,185
They're almost as
excited about the machine
450
00:23:24,272 --> 00:23:25,795
as they're about the doughnuts.
451
00:23:25,882 --> 00:23:27,406
This
really is something.
452
00:23:31,235 --> 00:23:32,367
And
it will give rise
453
00:23:32,454 --> 00:23:34,848
to another revolutionary idea.
454
00:23:41,028 --> 00:23:43,334
Meanwhile, before
Open Kettle attempts
455
00:23:43,465 --> 00:23:46,555
to launch an
unprecedented 52 flavors,
456
00:23:46,642 --> 00:23:49,253
Bill Rosenberg needs to
make another major change
457
00:23:49,340 --> 00:23:51,386
to the struggling shop.
458
00:23:51,517 --> 00:23:54,389
We just had to do something
about the name of the store.
459
00:23:54,476 --> 00:23:56,086
The name, why are
we changing the name?
460
00:23:56,173 --> 00:23:58,175
Nobody knows what
an open kettle is.
461
00:23:58,262 --> 00:23:59,786
When Bill wants something,
462
00:23:59,916 --> 00:24:02,484
he does not stop
before he gets it.
463
00:24:02,571 --> 00:24:05,574
And Harry Winouker
gets very frustrated
464
00:24:05,705 --> 00:24:09,491
because he tends to make
decisions unilaterally.
465
00:24:09,578 --> 00:24:11,841
You can't just change
the name of the store.
466
00:24:11,972 --> 00:24:12,929
Sure I can.
467
00:24:15,323 --> 00:24:18,979
Okay, we need a new
name for this place
468
00:24:19,066 --> 00:24:20,328
and it has to say doughnut.
469
00:24:21,242 --> 00:24:21,982
Any ideas?
470
00:24:23,070 --> 00:24:24,941
How about Doughnut Den?
471
00:24:25,028 --> 00:24:26,334
Delicious doughnuts.
472
00:24:26,465 --> 00:24:27,335
No.
473
00:24:27,422 --> 00:24:28,162
What else?
474
00:24:31,252 --> 00:24:32,601
What do you do with a doughnut?
475
00:24:33,950 --> 00:24:34,995
I've seen more
than a few customers
476
00:24:35,125 --> 00:24:37,214
dunk theirs into their coffee.
477
00:24:37,301 --> 00:24:38,259
Gross.
478
00:24:42,655 --> 00:24:44,874
I think nowadays,
people don't really
479
00:24:44,961 --> 00:24:48,922
dunk doughnuts in coffee,
but I'm asking you now
480
00:24:49,009 --> 00:24:52,186
to go back to the middle
of the 20th century,
481
00:24:55,015 --> 00:24:58,235
when it was how these
things were savored.
482
00:25:00,237 --> 00:25:02,457
The richness of the milk,
483
00:25:02,588 --> 00:25:05,591
and that sort of dark creamy
bitterness of the coffee
484
00:25:05,678 --> 00:25:08,245
would complement the
sweetness of the doughnut,
485
00:25:08,332 --> 00:25:09,682
it was the perfect synergy.
486
00:25:16,558 --> 00:25:18,473
Rosenberg
relaunches his store
487
00:25:18,560 --> 00:25:21,041
with a new name, Dunkin' Donuts,
488
00:25:24,392 --> 00:25:26,829
putting them on a path
to finally being able
489
00:25:26,916 --> 00:25:29,179
to compete with Krispy Kreme.
490
00:25:31,965 --> 00:25:34,097
This is the first of what
will eventually become
491
00:25:34,228 --> 00:25:37,971
13,000 Dunkin' Donuts
locations worldwide.
492
00:25:40,190 --> 00:25:42,889
But only one partner
will cash in.
493
00:25:56,555 --> 00:26:02,082
By 1950, Dunkin' Donuts is
raking in $5,000 a week,
494
00:26:03,431 --> 00:26:05,738
and Rosenberg is ready
to push his concept
495
00:26:05,825 --> 00:26:07,435
beyond this one location.
496
00:26:09,002 --> 00:26:10,960
He knew he had caught
lightning in a bottle.
497
00:26:11,047 --> 00:26:13,746
He knew he had something
unique that people loved.
498
00:26:13,876 --> 00:26:18,011
And if he was ever going to
expand, the time was now.
499
00:26:18,098 --> 00:26:21,797
He wants to do something
incredibly inventive
500
00:26:21,928 --> 00:26:26,149
and groundbreaking:
start franchises.
501
00:26:26,280 --> 00:26:27,498
While
Baskin-Robbins,
502
00:26:27,629 --> 00:26:28,630
Kentucky Fried Chicken
503
00:26:28,761 --> 00:26:31,502
and Dairy Queen have
begun to franchise,
504
00:26:31,590 --> 00:26:36,029
by 1954, the concept is
still in its infancy.
505
00:26:36,159 --> 00:26:39,032
Even McDonald's at the time
has only two locations.
506
00:26:43,471 --> 00:26:45,168
We can start looking
for a second location.
507
00:26:45,255 --> 00:26:46,561
A second location?
508
00:26:46,692 --> 00:26:47,910
And a third and a fourth.
509
00:26:47,997 --> 00:26:50,086
This is gonna be huge, Harry.
510
00:26:50,217 --> 00:26:51,261
Stores everywhere.
511
00:26:51,348 --> 00:26:54,656
I'm not interested
in stores everywhere.
512
00:26:54,787 --> 00:26:56,745
Bill wants to
grow, be successful,
513
00:26:56,832 --> 00:26:59,661
try new things, strike
out on new paths,
514
00:26:59,748 --> 00:27:02,403
and Harry wants to
stay the course.
515
00:27:02,490 --> 00:27:05,406
To him, it's about the
bottom line, risks,
516
00:27:05,493 --> 00:27:08,409
present the possibility of loss.
517
00:27:10,237 --> 00:27:11,586
As the
Dunkin' Donuts partnership
518
00:27:11,673 --> 00:27:13,066
comes to a head,
519
00:27:21,988 --> 00:27:23,816
Vernon Rudolph
looks to capitalize
520
00:27:23,903 --> 00:27:26,993
on customers' interest in
his doughnut-making process
521
00:27:27,123 --> 00:27:29,082
by giving them a front row seat.
522
00:27:31,388 --> 00:27:32,955
Vernon Rudolph believed
523
00:27:33,042 --> 00:27:34,653
that there was
something fascinating
524
00:27:34,740 --> 00:27:36,916
in watching the doughnuts
525
00:27:37,046 --> 00:27:40,833
just travel down this
river of bubbling oil
526
00:27:40,963 --> 00:27:44,358
as they floated and browned
and got golden and crispy,
527
00:27:44,445 --> 00:27:48,841
and then got enrobed in this
gorgeous sugary glazed coating,
528
00:27:49,929 --> 00:27:51,974
so that you ate with your eyes,
529
00:27:52,105 --> 00:27:53,628
you ate with your nose,
530
00:27:53,759 --> 00:27:56,762
before the doughnut
ever touched your lips.
531
00:27:59,286 --> 00:28:02,332
Customers flood
in to witness the spectacle
532
00:28:02,463 --> 00:28:04,857
Rudolph calls doughnut theater.
533
00:28:08,077 --> 00:28:10,863
This new unique feature
allows Krispy Kreme
534
00:28:10,950 --> 00:28:13,039
to truly set itself apart.
535
00:28:14,388 --> 00:28:16,433
And as it spreads
throughout the Southern US,
536
00:28:16,520 --> 00:28:19,480
they develop a
hardcore fan base.
537
00:28:19,610 --> 00:28:22,918
I grew up in the South
and folks in the South,
538
00:28:23,049 --> 00:28:25,660
we are Krispy Kreme
doughnut people.
539
00:28:25,791 --> 00:28:27,444
We grew up with Krispy Kreme
540
00:28:27,575 --> 00:28:29,795
and we stick by
Krispy Kreme today.
541
00:28:31,535 --> 00:28:35,322
By 1960,
Krispy Kreme has 29 stores
542
00:28:35,452 --> 00:28:38,586
in 12 states, with no
signs of slowing down.
543
00:28:43,634 --> 00:28:47,073
While one partnership thrives,
the other is still at odds.
544
00:28:49,684 --> 00:28:52,034
Harry Winouker, ever
the cautious bean counter
545
00:28:52,121 --> 00:28:53,688
looking at the bottom line said,
546
00:28:53,775 --> 00:28:55,734
"We're doing fine with
the stores we have.
547
00:28:55,821 --> 00:28:57,736
We don't need to
start creating stores
548
00:28:57,823 --> 00:28:59,302
for other people to run."
549
00:28:59,433 --> 00:29:01,087
So now there's friction,
550
00:29:01,174 --> 00:29:03,742
over Bill Rosenberg's
desire to expand,
551
00:29:03,829 --> 00:29:05,918
Harry Winouker's
resistance to expansion,
552
00:29:08,094 --> 00:29:11,924
and eventually they decide
to dissolve the partnership.
553
00:29:13,403 --> 00:29:17,581
Bill Rosenberg
pays Harry $350,000,
554
00:29:17,668 --> 00:29:21,498
which is the equivalent to
about $3.5 million today,
555
00:29:21,629 --> 00:29:24,763
to buy out his 50%
stake of the company.
556
00:29:24,850 --> 00:29:27,983
And this was a very
difficult move for Bill.
557
00:29:28,114 --> 00:29:30,203
He has to take out
a second mortgage
558
00:29:30,333 --> 00:29:33,554
and borrow money in
order to make the deal.
559
00:29:35,643 --> 00:29:38,864
Harry Winouker's
50% stake in Dunkin' Donuts
560
00:29:38,994 --> 00:29:42,084
would today be valued
at over $4 billion.
561
00:29:44,913 --> 00:29:46,654
Now with sole control,
562
00:29:46,741 --> 00:29:48,961
Rosenberg quickly
opens five locations,
563
00:29:50,832 --> 00:29:54,227
with plans to open 100
stores in three years.
564
00:30:04,150 --> 00:30:06,587
He brings in his
26-year-old son, Bob,
565
00:30:06,717 --> 00:30:09,938
a recent Harvard business
graduate, to help.
566
00:30:13,550 --> 00:30:15,639
But as they look to push south,
567
00:30:15,726 --> 00:30:18,599
there's another doughnut
chain standing in their way.
568
00:30:43,406 --> 00:30:45,060
It's delicious.
569
00:30:45,191 --> 00:30:46,714
That's it, there's
no other flavors?
570
00:30:48,629 --> 00:30:51,197
How is this place doing so
much better than our store?
571
00:30:51,327 --> 00:30:53,460
Well, they're selling them
for half the price of ours
572
00:30:53,547 --> 00:30:55,636
and they are still
warm when you buy them.
573
00:30:57,638 --> 00:30:59,422
Even if we make our
doughnuts fresher,
574
00:30:59,553 --> 00:31:02,121
we can't afford to match
Krispy Kreme's price.
575
00:31:03,905 --> 00:31:04,645
You're right.
576
00:31:05,994 --> 00:31:07,213
But we're not gonna compete.
577
00:31:11,043 --> 00:31:12,392
Who's in charge there?
578
00:31:12,522 --> 00:31:14,046
A guy named Vernon Rudolph.
579
00:31:15,482 --> 00:31:16,396
Get him on the phone.
580
00:31:18,877 --> 00:31:21,357
I want to talk to
Vernon Rudolph.
581
00:31:33,108 --> 00:31:35,023
By the early 1960s,
582
00:31:35,110 --> 00:31:39,027
Dunkin' Donuts closes
in on 100 locations,
583
00:31:39,158 --> 00:31:40,942
vaulting past Krispy Kreme
584
00:31:41,029 --> 00:31:43,379
as the largest doughnut
chain in the country,
585
00:31:43,466 --> 00:31:45,512
more than tripling their total.
586
00:31:45,599 --> 00:31:48,254
And it's changing the
way Americans eat.
587
00:31:49,429 --> 00:31:51,605
Break time is now
becoming synonymous
588
00:31:51,692 --> 00:31:52,911
with coffee and doughnuts.
589
00:31:54,651 --> 00:31:57,741
Ad campaigns pushing the
idea of a drink and a snack
590
00:31:57,828 --> 00:32:00,875
coin the phrase,
"Coffee-breaks".
591
00:32:01,006 --> 00:32:05,314
It was really becoming
convenient for Americans
592
00:32:05,401 --> 00:32:07,055
to have these two
items together.
593
00:32:07,186 --> 00:32:09,928
So it was that that Bill
kind of put together,
594
00:32:10,015 --> 00:32:12,582
this concept of
this delicious drink
595
00:32:12,669 --> 00:32:15,368
with this on-the-go food
that became Dunkin' Donuts.
596
00:32:18,545 --> 00:32:19,894
As Bill
Rosenberg attempts
597
00:32:19,981 --> 00:32:22,201
to take over the entire
Eastern seaboard,
598
00:32:23,854 --> 00:32:26,466
Krispy Kreme has a
stranglehold on the south.
599
00:32:32,124 --> 00:32:32,907
Hello?
600
00:32:32,994 --> 00:32:34,169
This is Vernon.
601
00:32:34,300 --> 00:32:35,431
Vernon Rudolph,
Bill Rosenberg.
602
00:32:35,518 --> 00:32:36,911
How are you?
603
00:32:37,042 --> 00:32:38,434
What can I do
for you, Mr. Rosenberg.
604
00:32:38,565 --> 00:32:40,784
Let me cut to the chase here.
605
00:32:40,871 --> 00:32:42,351
Your stores and your
product are great,
606
00:32:42,482 --> 00:32:44,963
but you really can't
compete with Dunkin' Donuts.
607
00:32:45,093 --> 00:32:46,834
So what if we played
for the same team?
608
00:32:48,618 --> 00:32:50,664
Dunkin' Donuts is interested
in purchasing Krispy Kreme.
609
00:32:55,843 --> 00:32:56,670
Hello?
610
00:32:58,802 --> 00:33:00,108
I don't know what to say.
611
00:33:00,195 --> 00:33:02,458
I'd have to talk it
over with my brother.
612
00:33:05,505 --> 00:33:06,985
Sure.
613
00:33:07,115 --> 00:33:08,812
Yeah, that's what
you need to do?
614
00:33:08,899 --> 00:33:10,162
Think about it, get back to me.
615
00:33:10,292 --> 00:33:11,511
We can talk numbers when you do,
616
00:33:11,598 --> 00:33:13,600
but believe me, they'll
be good numbers.
617
00:33:18,692 --> 00:33:20,607
If Vernon
Rudolph accepts his offer,
618
00:33:20,737 --> 00:33:23,392
Rosenberg will have
Dunkin' Donuts in position
619
00:33:23,523 --> 00:33:25,786
to take over the
rest of the country.
620
00:33:37,972 --> 00:33:40,105
It has to be a lot of money.
621
00:33:40,235 --> 00:33:41,628
We could retire.
622
00:33:41,715 --> 00:33:42,629
We'd be set for life.
623
00:33:44,239 --> 00:33:45,936
Vernon Rudolph had
established something
624
00:33:46,067 --> 00:33:47,851
that was unique there.
625
00:33:47,982 --> 00:33:49,505
And people loved the product.
626
00:33:49,636 --> 00:33:50,376
They love the brand.
627
00:33:50,463 --> 00:33:51,725
They love the experience.
628
00:33:58,949 --> 00:34:00,864
I don't want to sell.
629
00:34:00,995 --> 00:34:02,910
We built this place, right?
630
00:34:03,041 --> 00:34:04,912
And I want to keep
growing it our way.
631
00:34:08,524 --> 00:34:11,092
Vernon was wrapped up in
the growth of Krispy Kreme.
632
00:34:11,179 --> 00:34:13,573
He was gonna be the one
that made it an industry.
633
00:34:21,624 --> 00:34:22,408
Not interested.
634
00:34:24,758 --> 00:34:26,368
I've been thinking,
635
00:34:26,455 --> 00:34:29,154
what if we add new
flavors to the menu?
636
00:34:29,241 --> 00:34:30,590
You know, things that
might appeal in the south.
637
00:34:30,720 --> 00:34:31,808
We have plenty of flavors.
638
00:34:31,939 --> 00:34:33,245
The doughnuts
aren't the problem.
639
00:34:33,332 --> 00:34:36,204
To turn Dunkin'
Donuts into a national chain,
640
00:34:36,335 --> 00:34:39,033
the Rosenbergs will now
need a new strategy.
641
00:34:39,164 --> 00:34:41,731
Dunkin' Donuts
finds themselves
642
00:34:41,862 --> 00:34:43,907
at this make or break point
643
00:34:43,994 --> 00:34:47,868
where they need something
to propel them over the top
644
00:34:47,955 --> 00:34:51,828
and make them this
iconic national brand.
645
00:34:53,874 --> 00:34:56,398
Bob Rosenberg
pitches his father on a plan
646
00:34:56,485 --> 00:34:59,793
to take over, not just the
south, but the entire country.
647
00:35:02,100 --> 00:35:05,364
In 1968, Dunkin'
Donuts goes public.
648
00:35:06,843 --> 00:35:09,542
So an IPO, stands for
Initial Public Offering.
649
00:35:09,629 --> 00:35:12,980
Very simply put, it
allows you to now go
650
00:35:13,067 --> 00:35:16,026
to the general public and
get money from anybody
651
00:35:16,157 --> 00:35:17,898
that can afford
to buy your stock.
652
00:35:17,985 --> 00:35:20,640
But now the expectation
of every investor
653
00:35:20,770 --> 00:35:22,903
is that the stock
price is gonna go up.
654
00:35:25,732 --> 00:35:27,951
They are only
the third food service company
655
00:35:28,082 --> 00:35:31,433
to do so, after McDonald's
and Kentucky Fried Chicken.
656
00:35:34,044 --> 00:35:38,614
The influx of cash drives the
company towards 300 stores.
657
00:35:38,701 --> 00:35:40,573
And Rosenberg's dream
of the country's
658
00:35:40,703 --> 00:35:43,837
first national doughnut
chain comes to fruition.
659
00:35:47,841 --> 00:35:50,496
But investors are
hungry for more growth.
660
00:35:51,845 --> 00:35:54,543
They were putting
quantity over quality,
661
00:35:54,630 --> 00:35:58,112
and many of the franchisees
were losing trust.
662
00:35:58,243 --> 00:35:59,548
They felt that the expansion
663
00:35:59,679 --> 00:36:02,247
was more important
than they were.
664
00:36:02,377 --> 00:36:05,075
This becomes a major
crisis for the company.
665
00:36:05,206 --> 00:36:07,774
The board wants Bill
to fire his son.
666
00:36:10,690 --> 00:36:13,562
Dunkin'
Donuts' stock plummets,
667
00:36:13,693 --> 00:36:17,262
forcing the closure
of over 100 stores.
668
00:36:20,090 --> 00:36:24,704
So now, people are less
willing to buy franchises.
669
00:36:26,967 --> 00:36:29,578
The growth of Dunkin'
Donuts stalls,
670
00:36:29,665 --> 00:36:31,754
and they are just
at the precipice
671
00:36:31,885 --> 00:36:35,280
where they could become
this iconic titan,
672
00:36:35,367 --> 00:36:39,632
this national brand, or they
could potentially collapse.
673
00:36:43,375 --> 00:36:44,898
To turn
business around,
674
00:36:45,028 --> 00:36:47,292
Bob Rosenberg needs a miracle.
675
00:36:51,905 --> 00:36:53,907
And it may have just
walked in the door,
676
00:36:55,474 --> 00:36:58,216
with two successful franchisees
677
00:36:58,303 --> 00:36:59,913
who have an interesting
new product.
678
00:37:01,131 --> 00:37:02,437
I figured this might be
679
00:37:02,568 --> 00:37:05,179
of some interest to
you, Mr. Rosenberg.
680
00:37:20,586 --> 00:37:22,588
His father's
company on the line,
681
00:37:22,675 --> 00:37:25,591
Bob Rosenberg finds
two franchisees
682
00:37:25,678 --> 00:37:30,335
with surprisingly strong
sales, Robert and Edna Demery.
683
00:37:32,859 --> 00:37:34,687
One day, it dawned on me.
684
00:37:34,774 --> 00:37:36,254
Why are we just
cutting out the centers
685
00:37:36,341 --> 00:37:38,168
and throwing them away?
686
00:37:38,299 --> 00:37:40,301
Using a
cutter invented by Edna,
687
00:37:40,432 --> 00:37:43,304
the Demerys make
perfect doughnut holes
688
00:37:43,435 --> 00:37:46,655
1/5 the size of a
standard doughnut.
689
00:37:46,742 --> 00:37:47,830
They're selling
like hot cakes.
690
00:37:47,961 --> 00:37:48,918
The kids love 'em,
691
00:37:49,049 --> 00:37:51,051
and our business is up 20%
692
00:37:51,138 --> 00:37:52,444
since we started selling them.
693
00:37:59,189 --> 00:38:00,495
The
Rosenbergs quickly roll out
694
00:38:00,582 --> 00:38:02,889
the new doughnut
hole company-wide,
695
00:38:02,976 --> 00:38:05,239
with a name inspired
by a classic movie,
696
00:38:06,545 --> 00:38:08,503
known to millions.
697
00:38:11,419 --> 00:38:13,595
The Wizard of
Oz was the latest
698
00:38:13,726 --> 00:38:15,162
I ever got to stay up as a kid.
699
00:38:15,249 --> 00:38:16,903
It was a big event.
700
00:38:22,387 --> 00:38:25,215
In 1974,
Dunkin' Donuts debuts
701
00:38:25,303 --> 00:38:27,783
their newest icon, the munchkin.
702
00:38:29,132 --> 00:38:32,962
The munchkin was really
genius because Bill's son, Bob,
703
00:38:33,093 --> 00:38:35,878
he takes a look at the happy
meal and he understands
704
00:38:36,009 --> 00:38:38,011
that by packaging
products together,
705
00:38:38,141 --> 00:38:39,708
people will end buying more.
706
00:38:39,839 --> 00:38:41,884
It wasn't about just
buying one doughnut
707
00:38:42,015 --> 00:38:43,190
or a couple doughnuts.
708
00:38:43,321 --> 00:38:46,236
All of a sudden,
people were able to buy
709
00:38:46,324 --> 00:38:49,762
36, 24 in a little
carrying case.
710
00:38:51,154 --> 00:38:52,547
The
munchkin is unlike
711
00:38:52,678 --> 00:38:55,637
anything else on the
market, small but mighty.
712
00:38:55,724 --> 00:39:00,338
The treat appeals to a $20
billion consumer market: kids,
713
00:39:01,991 --> 00:39:03,732
and propels Dunkin'
Donuts' growth into heights
714
00:39:03,863 --> 00:39:06,953
few chains ever have,
or ever will match.
715
00:39:11,000 --> 00:39:12,611
The munchkin will
go on to cement
716
00:39:12,741 --> 00:39:15,570
Dunkin' Donuts' status
as the most recognized
717
00:39:15,701 --> 00:39:18,617
and successful doughnut
chain in the world.
718
00:39:18,747 --> 00:39:21,837
Bill Rosenberg was an
entrepreneurial visionary.
719
00:39:21,968 --> 00:39:26,886
And his belief in franchising
is the key to his legacy.
720
00:39:27,669 --> 00:39:30,803
His son, Bob, said he could
sell the sand on the beach,
721
00:39:30,933 --> 00:39:34,502
not unlike Ray Kroc of
the McDonald's brand.
722
00:39:34,633 --> 00:39:37,200
Bob Rosenberg
continues to run Dunkin' Donuts
723
00:39:37,331 --> 00:39:40,160
until his retirement in 1998
724
00:39:40,290 --> 00:39:43,555
when the company has
over $2 billion in sales.
725
00:39:45,121 --> 00:39:48,037
Bob Rosenberg had a
bit of a rough start,
726
00:39:48,124 --> 00:39:50,605
but he makes some key decisions,
727
00:39:50,736 --> 00:39:53,260
especially around
brand recognition.
728
00:39:54,957 --> 00:39:59,745
In the early 1980s,
he hires Michael Vale
729
00:39:59,832 --> 00:40:03,052
to be the actor to
play Fred the Baker.
730
00:40:03,139 --> 00:40:05,968
Time to make the doughnuts.
731
00:40:06,055 --> 00:40:10,799
This becomes a wildly
popular advertising campaign.
732
00:40:10,930 --> 00:40:14,324
In the end, Dunkin' Donuts
is where it is today,
733
00:40:14,455 --> 00:40:17,415
as much because of Bob
as because of Bill.
734
00:40:20,766 --> 00:40:21,941
Today,
there are over
735
00:40:22,028 --> 00:40:25,205
13,000 Dunkin' Donut
stores worldwide,
736
00:40:25,335 --> 00:40:28,208
more than Burger King,
Taco Bell, and Dominoes,
737
00:40:28,295 --> 00:40:31,429
and the company is
worth almost $9 billion,
738
00:40:32,778 --> 00:40:35,128
selling almost three
billion doughnuts
739
00:40:35,215 --> 00:40:38,523
and two billion cups
of coffee a year.
740
00:40:38,653 --> 00:40:42,265
Bill Rosenberg took
a big leap of faith
741
00:40:42,352 --> 00:40:44,703
and the leap of
faith that paid off.
742
00:40:46,139 --> 00:40:49,403
I'm drinking Dunkin'
Donuts coffee right now.
743
00:40:49,490 --> 00:40:50,883
Thanks, Bill.
744
00:40:53,973 --> 00:40:55,235
For Krispy Kreme,
745
00:40:55,365 --> 00:40:58,064
the Rudolph brothers
find success by sharing
746
00:40:58,194 --> 00:41:00,458
the magic of doughnut-making
with the world,
747
00:41:02,242 --> 00:41:04,331
and Krispy Kreme becomes more
than just a doughnut shop.
748
00:41:05,593 --> 00:41:07,682
It's an American experience.
749
00:41:09,728 --> 00:41:13,340
Vernon Rudolph was not
a cutthroat businessman.
750
00:41:13,471 --> 00:41:16,561
He was a sweet,
good-natured guy,
751
00:41:16,648 --> 00:41:21,087
and he was just determined
to make something of himself.
752
00:41:21,217 --> 00:41:23,524
And he creates a doughnut
unlike any doughnut
753
00:41:23,655 --> 00:41:25,483
I've had anywhere
else in the country,
754
00:41:26,614 --> 00:41:28,747
anywhere else in the world.
755
00:41:31,184 --> 00:41:34,274
Since
being surpassed in 1963,
756
00:41:34,361 --> 00:41:38,583
Krispy Kreme has never matched
Dunkin's financial success,
757
00:41:38,670 --> 00:41:41,194
but Vernon Rudolph
succeeded in his dream
758
00:41:41,281 --> 00:41:43,762
to turn doughnuts
into its own industry.
759
00:41:45,764 --> 00:41:48,810
Today, Krispy Kreme continues
to spread the gospel
760
00:41:48,941 --> 00:41:52,466
of hot doughnuts at nearly
12,000 locations worldwide,
761
00:41:53,859 --> 00:41:56,470
selling over $1 billion.
762
00:42:00,169 --> 00:42:01,649
Both Krispy Kreme
and Dunkin' Donuts
763
00:42:01,780 --> 00:42:03,521
continue to evolve today.
764
00:42:03,608 --> 00:42:06,480
I think people now
see Dunkin' Donuts
765
00:42:06,567 --> 00:42:09,091
as the place they go
to start their day,
766
00:42:09,222 --> 00:42:11,877
whereas Krispy Kreme
is where they go
767
00:42:11,964 --> 00:42:14,923
at the end of their day
for that sweet treat.
768
00:42:15,010 --> 00:42:16,795
And I think that's
what's so great,
769
00:42:16,925 --> 00:42:18,753
that no matter where
in the country you are,
770
00:42:18,884 --> 00:42:20,886
no matter what
time of day it is,
771
00:42:20,973 --> 00:42:23,149
there is a doughnut
to match your mood
772
00:42:23,236 --> 00:42:25,325
and to make life worth living.
58552
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