Krispy Kreme Australia, the company with a franchise agreement to run the doughnut business in Australia and New Zealand, has gone into voluntary administration.

Some of the outlets in the privately owned 54 store chain have suffered from declining sales, poor locations, high rents and distribution costs said director John McGuigan.

However McGuigan maintained good profits were achieved in a number of stores and remains confident about the business’s future. He said The directors believe the core business, which has a seven year history in Australia, remains strong and a financially viable company will emerge from the process.

McGuigan gave assurances that employee entitlements will be met in full in the case of any redundancies.

Krispy Kreme has appointed Smith Hancock as Voluntary Administrator.