International Markets for Krisy Kreme Donuts
The first question to be answered is the viability of Krispy Kreme Donuts Inc. In view of the problem that lead to this question the attractiveness of a Krispy Kreme franchise is questionable. This is far outside the scope of this paper, and the balance of the paper will be based on the assumption that someone qualified under the company's standard for franchises would be interested in opening Krispy Kreme stores in a new market, or that the company would open the stores.
Based on the material that is included following the references section, this is far from a certainty. The Securities and Exchange Commission (SEC) is investigating the company for accounting and reporting violations. The last published sales figures shows sharp drops in sales per store and an operating loss for the period. There have been no quarterly financial results published in 2005, and the SEC form 10-K (annual report) for the fiscal year ending 31 January 2005 and the subsequent 8-Qs (quarterly reports) have not been filed. There are numerous questions concerning the historic accounting and actions of the company as outlined in an 8-K report filed August 2005.
This document concluded with the following statement,
"àHowever, all officers and employees we believe had any substantial involvement in or responsibility for these errors have left the Company, and the process of correcting the Company's financial statements is under way. à" (SEC 8-K)
The qualifications for franchisees include the following:
Applicants must have current ownership and operating experience or previous ownership and operating experience of multi-unit food service operations in the market that you desire to develop.
Our franchisees must possess the capital sufficient to fund the development of the market. We currently grant franchises on an area development basis. Specifically, our area developers are req...