Krispy Kreme (DNUT) Risk Analysis

As of December 28, 2025, JAB held approximately 43% of our common stock, conferring upon it significant influence over crucial matters requiring stockholders' approval. This influence extends to decisions such as electing directors, facilitating mergers, consolidations, and acquisitions, disposing of substantial assets, and shaping our capital structure. This level of concentrated ownership could potentially lead to delays, deterrents, or the prevention of actions that may be favored by our other stockholders. JAB's interests may not always align with those of our broader stockholder base. Furthermore, this concentration of ownership has the potential to hinder or discourage any attempts at a change in control of the Company. The concentration of voting power could also impact stockholders by limiting the opportunity to receive a premium for their common stock shares in the event of a sale of the Company, which, in turn, may affect the market price of our common stock. JAB might also seek to push us in directions that it deems beneficial for its own investment but could carry risks for other shareholders or negatively impact our Company and its stakeholders. As a result, there is a possibility that the market price of our common stock could decline, or stockholders may not receive a premium above the prevailing market price in the event of a change in control. Furthermore, this concentration of share ownership adversely affects the liquidity of our common stock and might be viewed negatively by investors, potentially affecting the trading price of our common stock, as some may perceive drawbacks in owning shares in a company heavily influenced by a few significant stockholders.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and other laws and regulations applicable to public companies. These laws and regulations require, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. They also require management to perform an annual assessment of the effectiveness of our internal control over financial reporting and disclosure of any material weaknesses in such controls. We are required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. We identified a material weakness in our internal control over financial reporting in the second quarter of fiscal 2025. While we believe we have remediated the material weakness identified during fiscal 2025 as of December 28, 2025, there is no assurance that our remedial measures have been effective or that additional material weaknesses will not be identified. We have had errors in our financial statements in the past that have required the revision of our financial statements. In the future, controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements. For additional information related to previously identified material weaknesses in internal control over financial reporting identified and the related remedial measures, see Item 9A, "Controls and Procedures," of Part II of this Annual Report. There is no assurance that additional material weaknesses will not be identified. In addition, in the future, controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements. Any deficiency in our internal control over financial reporting and disclosure controls and procedures, or any difficulties encountered in their implementation or improvement, could result in a restatement of our consolidated financial statements for prior periods, cause us to fail to meet our financial and other reporting obligations, result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, or lead to investigations or sanctions by regulatory authorities or other potential claims or litigation. Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations, and could cause our investors to lose confidence in the accuracy and completeness of our financial reports and the price of our common stock to decline.

The Company's significant level of indebtedness and related leverage carries potential adverse consequences, including, but not limited to: - increasing our vulnerability to, and reducing our flexibility to respond to, changes in our business and general adverse economic and industry conditions;- requiring the dedication of a substantial portion of our cash flow from operations to service our debt, thereby reducing the availability of such cash flow to fund working capital, capital expenditures, acquisitions, joint ventures, product research, or other corporate purposes;- restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;- exposing us to the risk of increased interest rates for unhedged variable interest rate borrowings under our current credit facilities;- making it more difficult for us to repay, refinance or satisfy our obligations with respect to our debt;- limiting our ability to borrow additional funds in the future and increasing the cost of any such borrowing;- imposing restrictive covenants that may hinder our ability to finance future operations and capital needs or to pursue certain business opportunities and activities, and which, in the event of non-compliance without a cure or waiver, could result in an event of default and the acceleration of the applicable debt and any debt subject to cross-acceleration; and - exposing us to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world and substantially all of our debt is denominated in U.S. dollars. Moreover, under the terms of the 2023 Facility (defined below), we are subject to certain financial covenants, including a requirement to maintain a bank leverage ratio of less than 5.00 to 1.00 as of the end of each quarterly Test Period (as defined in the 2023 Facility). If we are unable to meet the 2023 Facility financial or other covenants, it could limit our ability to draw on the revolving credit facility, could result in the lenders accelerating the maturity of such indebtedness and we may not have sufficient resources to repurchase, repay or redeem our obligations, as applicable, and could require the replacement of the 2023 Facility with new sources of financing, which we may be unable to secure on favorable terms or at all, any of which could negatively impact our liquidity. Also, if we were unable to repay the amounts due under our secured indebtedness, the holders of such indebtedness could proceed against the collateral that secures such indebtedness. In the event our creditors accelerate the repayment of our secured indebtedness, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Additionally, we may incur additional indebtedness, guarantees, commitments, or liabilities in the future. The need for refinancing, in part or in full, of our existing indebtedness before maturity is a possibility. There is no guarantee that we will be able to secure refinancing on favorable terms or at all. Should our business fail to generate sufficient cash flow from operations or if we encounter difficulty securing future debt or equity financing on acceptable terms and in sufficient amounts to meet our debt obligations or address other liquidity requirements, our financial health and operational results may suffer.

Our strategic focus includes expanding our Global Points of Access. This includes expansion through the establishment of new shops and fresh delivery doors by us and our franchisees, and through expanding our digital platforms, both in our current markets and new regions. We may be ineffective in implementing this expansion strategy including due to external factors outside of our control such as economic conditions, legal and regulatory developments, permitting delays, rising costs or availability of commodities, or ability to obtain or renew desirable locations for new shops on acceptable terms or at all. Additionally, operational challenges, such as difficulties in sourcing product components or logistical services, may impose limitations. If we or our franchisees are unsuccessful in expanding Global Points of Access, our overall growth objectives would be hindered. Additionally, our presence and growth in certain international markets heavily depends on our franchisees. There is no guarantee that these franchisees will successfully develop or manage their Points of Access in alignment with our brand standards or develop additional Points of Access in line with established targets or our expectations. Moreover, their ability to effectively open, operate, and sustain these Points of Access in accordance with their agreements and our brand requirements may be constrained by their business capabilities or financial resources. Moreover, as part of our growth strategy, we may decide to increase or decrease the number of Company-owned shops by purchasing existing franchised shops, by refranchising existing Company-owned U.S. or international equity markets, or by developing additional shops. Our failure to successfully execute any such transactions could have an adverse effect on our operating results. Furthermore, some of our facilities, doughnut-making lines, and other equipment have been in service for extended periods and their remodeling, repair, or replacement may require substantial capital investment. As such assets continue to age, sourcing replacement parts and components may become increasingly difficult and required repairs may become increasingly extensive. If the costs associated with remodels, repairs, or replacements are higher than anticipated, downtimes are longer than planned, or upgraded assets do not perform as expected, we may not realize the desired returns on our investment. Further, our current levels of maintenance capital may not be sufficient to adequately address the condition of our assets. Failure to make necessary repairs could expose us to audits, fines, or penalties, and, in certain circumstances, could result in closures of facilities. Any of these outcomes could disrupt our operations, harm our reputation, and have a material adverse effect on our business, financial condition, results of operations, and future prospects.

Our growth strategy includes expanding our fresh delivery business and digital channel, which involves substantial costs and uncertainties. These stem from various factors, including the expansion of Points of Access, requirements to enhance manufacturing capabilities and regulatory compliance, usage of information technology and logistics systems, and adjustments in our corporate structure and workforce. The success of this expansion is contingent upon our ability to effectively leverage and realize certain objectives. These include finding suitable retail partners, extending our market reach, building and sustaining the manufacturing and logistical capabilities required to fulfill our delivery commitments, complying with regulatory requirements associated with growth in off-premise distribution at certain locations, and increased reliance on digital ordering and delivery technology, including apps owned by third-party delivery aggregators and payment processors or maintained by third party developers. Moreover, the complexity associated with off-premise distribution and potential disruption to shop operations has in the past and may in the future have an adverse impact on the experience for consumers and our Krispy Kremers. Furthermore, this expansion could intensify or be affected by other risk factors mentioned herein, particularly those concerning our logistical and manufacturing capacities and our competitiveness in the indulgence market. Our omni-channel business model, in particular our fresh delivery business, also exposes us to heightened food safety and other regulations and requirements imposed by federal, state, and county regulators such as the Food Safety Modernization Act, as well as requirements that may be imposed by certain customers. Our failure to adhere to regulatory or customer requirements could lead to store closures, inability to maintain customer relationships, increased costs, or other impacts that could have a material adverse effect on our business, financial condition, and results of operations. As we progress our initiative to outsource to 3PL carriers the delivery of fresh doughnuts to customers and consumers in our fresh delivery and digital channels, we have reduced control over the related processes, including delivery and merchandizing, costs, and quality control. Our reliance on third parties may lead to shipping delays and disruptions, unanticipated costs, and failures to provide adequate customer service that are outside of our direct control. If we are not satisfied with a 3PL carrier, we may be unable to quickly pivot away from utilizing its services and, even if we are able to do so, we may be subject to significant penalties for doing so. Any of these consequences could have a material adverse effect on our reputation, business, operating results, and financial condition. There is no assurance that we will attain the expected benefits or achieve the cost savings, revenue growth, and other positive outcomes needed to counterbalance the costs and risks associated with this expansion.