updated 7/29/2008 7:06:10 PM ET 2008-07-29T23:06:10

Doughnut shop operator Krispy Kreme Doughnuts said Tuesday it has agreed to franchise about 25 outlets in Turkey over the next five years.

The Winston-Salem-based company said it had agreed with Almana Yiyecek Ve Icecek San. Ve. Tic Ltd STI, a subsidiary of Qatar-based Almana Group. The restaurants will be located in Istanbul. Financial terms of the deal were not disclosed.

Almana Group general manager Bader Almana said they hope to establish Krispy Kreme as a new trend for customers in Istanbul.

"We are impressed with the strength of the brand and expect that the quality Krispy Kreme products which we will offer to consumers in Turkey will be very much appreciated," Almana said in a statement.

Krispy Kreme reported in June its first profitable quarter in more than a year. The chain has been hurt by allegations of misconduct by former management, a trend toward healthier eating and bankruptcy filings by several of its franchisees.

For the quarter ended May 4, the company reported a profit of $4 million, or 6 cents per share, compared with a loss of $7.4 million, or 12 cents per share in the prior year quarter. Revenue fell 7 percent to $103.6 million.

The company says about 75 percent of its stores are operated by franchisees, and half are located outside the United States.

Krispy Kreme shares were up 29 cents, or 6.9 percent, to $4.49 Tuesday.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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