Dain Rauscher Wessels Initiates Coverage of Krispy Kreme With a Buy Rating.

Business Editors & Analysts

NOTE TO EDITORS: The following is an investment opinion issued by

Dain Rauscher Wessels.

MINNEAPOLIS--(BUSINESS WIRE)--May 1, 2000

Dain Rauscher Wessels equity analyst David Geraty today initiated coverage of Krispy Kreme Doughnuts Inc. (NASDAQ: KREM), $43, with a Buy-Aggressive Risk rating. Geraty has a 12-month price target of $45.

In the report, Geraty mentions that Krispy Kreme, a leading specialty food retailer of premium quality doughnuts, has compelling long-term investment prospects driven by a well-positioned multichannel concept, a strong brand and national growth opportunities.

"Krispy Kreme has established itself as the quality leader in the doughnut industry and is positioned to become the dominant industry player," Geraty said in a report. "With 145 retail locations in 27 states, Krisy Kreme is expected to capitalize on the brand conscious consumer's demand for a consistent, high quality specialty food product."

Dain Rauscher Wessels co-managed the initial public offering of Krispy Kreme on April 5 at $21.

Institutional investors interested in receiving more information should contact their Dain Rauscher Wessels salesperson. Media interested in receiving Geraty's report should call [phone].

The Dain Rauscher Wessels division includes equity research, equity trading, institutional equity sales and corporate finance. The division's 38 analysts focus on five industries: consumer, energy, financial services, health care and technology. Currently, the analysts follow more than 400 companies. The division, which employs 350 people, has offices in Austin, Texas; Boston; Chicago; Dallas; Houston; Menlo Park, Calif.; Minneapolis; New York City; San Francisco; Seattle; and Tel Aviv, Israel(a).

Minneapolis-based Dain Rauscher Incorporated provides investment services to individual investors and small businesses through offices in 26 predominantly western states, investment banking services to corporations and municipalities nationwide, and trade clearing and settlement services to non-affiliated broker-dealers throughout the United States and abroad. Dain Rauscher Incorporated, one of the nation's largest full-service securities firms, is a member of the New York Stock Exchange and other major securities exchanges, as well as the Securities Investor Protection Corp. Dain Rauscher Corporation, its holding company, trades on the New York Stock Exchange under the symbol DRC. The company's headquarters are located at Dain Rauscher Plaza, 60 S. Sixth St.

Dain Rauscher Incorporated managed or co-managed a public offering of the securities of Krispy Kreme Doughnuts Inc. within the past three years. Dain Rauscher Incorporated also makes a market in Krispy Kreme and may act as principal with regard to sales or purchases of this security.

Additional information on the securities mentioned is available on request. This does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. DRI, its officers, directors, affiliates, and/or employees (including the authors of this report) may from time to time have a long or short position in publicly or privately issued securities of companies mentioned or derivatives thereof and may sell or buy such securities for their own or related accounts. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

(a) Strategic alliance with Tamir Fishman & Co.