HONG KONG - THE Hong Kong franchisee of American chain Krispy Kreme Doughnuts is going into liquidation, as it becomes the latest company in the city to close amid the global financial crisis.

Of its seven stores in Hong Kong, five will be closed immediately.

The two outlets at the Hong Kong International Airport will continue to trade until further notice, said Briscoe & Wong, which has been appointed as independent financial advisers to help the franchisee find liquidators.

A creditors' meeting would be held on Nov 12 to seek liquidators to deal with the assets of Krispy Kreme Hong Kong and the claims of its employees and creditors, Briscoe & Wong said in a statement yesterday.

'The directors are very disappointed that they have had to take this action,' it said.

Earlier this month, the United States sweet-treats chain said it agreed with KKD Lotte Holdings to open 35 Krispy Kreme retail locations over the next four to five years in China's major cities, including Shanghai, Beijing and Tianjin.

Lotte is Krispy Kreme's franchisee in South Korea and Japan.

Krispy Kreme has struggled in recent years with restatements, investigations into its past accounting records and a decline in doughnut sales that sent some of its franchisees into bankruptcy.