One of my faves. Can't remember if was KFO or post. I loved this movie and always fantasized what those donuts would taste like. From what I recall, a kid (or kids) took over a donut truck because the owner had to leave. At one point, a rich lady starts helping make donuts because it looks so fun. She loses her diamond ring. They hold a contest to find the ring for a prize.

I remembered this film as soon as you mentioned the ring, I probably haven't thought about this since the '70s. This was an easy one:

"The Donuts" (1963)
http://www.imdb.com/title/tt0387181/combined

It was posted on Youtube a few years ago, but it appears to have been removed due to a copyright claim. Not a Festival title to my knowledge, but probably one of those scratchy 16mm films that got pulled out at school when it rained during recess. :)