Question

I want to open Krispy kreme in Berlin city in Germany , with deploy strategy. what do you think is better to run this business.

*some information

Location Clock

Maturity of market

Comparison with other market opportunities

Changing conditions and stability

Foreign companies presence

Incentives Clock

Decreasing generosity

Short-term vs long-term incentives

Firm Clock

Available resources

Intrinsic pace to deploy business model

Experience

Competitive Clock

Benefits of entering early vs the opportunity costs of postponing

*what Sales and Marketing Plan

How will you deal with the liability of being a foreigner?

      How will you deal with the paradox of being consistent?

Product (Extend or adapt?)

               Product positioning (GCCP? LCCP? FCCP?)

Price (Ethnocentric? Polycentric? Geocentric?)

Promotion (Extend or adapt?)

Place (Extend or adapt?)

*Operations Plan

            Entry mode

            Timing of entry

                        Location clock? Incentives clock? Firm clock? Competitive clock?

            Outsource?  Offshore?

*Financial Plan

            Projections and expectations

Answer 1

Products and Services

• Doughnuts
• Coffee
• Iced drinks and beverages

New Products and Product Improvement

• The Whole Wheat Glazed
• Recipe refinement
• Better ingredients
• Kool Kreme
• Chillers

1933 - Ishmael Armstrong bought a doughnut shop from a New Orleans chef named Joe Lebeau.

With the purchase of the doughnut shop came a secret recipe for raised doughnuts.

According to all sources, it was a magical formula that created unprecedented softness and taste.

The doughnuts were so extraordinary they had become a local legend. Armstrong dreamed up a name for his confections and Krispy Kreme Doughnuts were created.

Vernon Rudolph opened a wholesale doughnut business in Winston-Salem, North Carolina, in 1937.

Krispy Kreme marketed his doughnuts to food stores at first, but many people stopped at the factory and demanded to purchase fresh doughnuts.

Vernon Rudolph finally cut a hole into the wall of the building and started selling individually to clients

What we are asking from you

Marketing Strategy

Required investment of $1,800,000 to help start our Krispy Kreme Franchise.

• “Hot Now” sign – Fresh Doughnuts
• Free doughnut strategies
• Gifts
• Accessories
• Fundraising

Management Personnel

Salary account

Advertising

1. Franchisee

2. General store manager

3. Assistant Manager

4. Shift Manager (Multiple)

5. General workers

Management

Franchising with Krispy Kreme

Description of Krispy Kreme

Krispy Kreme Manufacturing & Distribution

Franchise - An authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities

Krispy Kreme's Industry &

The Company

Krispy Kreme's Business

Krispy Kreme’s business strategy is focused on revenue from their company-owned stores, royalties and franchises fees, and sales of the mixes, specialty coffees, and doughnut-making equipment

Franchise Requirements

Franchised

Facts about Krispy Kreme

Krispy Kremes

Applicants must meet the following:

• Krispy Kreme Doughnuts Inc. owns and franchises doughnut stores.
• Krispy Kreme is located in 16 countries
• Sell over 20 varieties of doughnuts
• Krispy Kreme is composed of company-owned stores, franchised stores, and distribution plants, KK&MD.

Customers

Initial Investment-

*Franchisee must-have resources to funds worth $1million in liquid assets and a minimum net worth of $2million

• Employee Expense Total - $165,416

Plan to open for business: January 2014

Hours of Operation:

• Mon-Thu, Sun 6 am–11 pm
• Fri-Sat 6 am–12 pm

Krispy Kreme Values

* 15 years location rights

• Passion for the Krispy Kreme brand and Krispy Kreme products

• Consumers are our lifeblood, the center of the doughnut
• We must cast the best possible image in all that we do
• There is no substitute for quality in our service to consumers

• Applicant must have financial resources to fund a multi-unit store development plan
• A minimum $1 million in liquid assets
• A minimum net worth of $2 million

Building Startup Cost - Greater than $500,000

Mission statement: "To touch and enhance lives through the joy that is Krispy Kreme.

Vision statement: "To swap tasty tastes and to build happy memories around the planet"

Building Outfit Cost - $1,350,000

• Applicants must also have plans to further franchise at least 10 stores

Thank you for your time and attention!

Strengths

• Proven 75-Year-Old Brand

• Position within the doughnut industry

• Krispy Kreme has Strong Channel of Distribution

• Affordability of products

Weaknesses

• One single concept

• Montana Mills acquisition

• Limited visibility of franchises

Opportunities

• International opportunity

• Untouched domestic locations

• Grocery And Foodservice Market Capture

Threats

• Competitive factors

• Regulations

• The low-carb trend in eating preferences

• Competitors like Dunkin Donuts, Tim Horton’s, Starbucks (Etc.)

Krispy Kremes

Estimated Total Start-up Costs - $3,600,000

Competition

• Dunkin Donuts
• Starbucks
• Shipley’s Doughnuts
• Tim Hortons

• Founded by Paul & Vernon Rudolph in 1936 in Nashville, Tennessee

Costs Budget

$928,000 to $1,883,250

Customers

• Breakfast Rush
• Businesses
• Organizations
• Groups
• Grocery stores
• Convenience stores

• Per doughnut – $0.99
• Glazed doughnut dozen – $7.69
• Assorted doughnut dozen - $8.69

Your investment will be a smart decision in a good company that is already backed by 75 years of tradition.

• Mainly focused on word of mouth
• Some TV Commercials
• Decorative signs provided by Krispy Kreme
• Promotion decor provided by Krispy Kreme

General Store Manager - $43,000 to $57,000

Assistant Manager - $35,000 to $42,000

Shift Manager(s) - $10.00 to $12.00[Hourly]

Team Member(s) - $8.00 to $10.00 [Hourly]

Krispy Kreme History

Marketing & Advertising Plan

KK & MD

"Krispy Kreme Manufacturing and Distribution"

The KK & MD Supply Chain -

• Produces doughnut mixes
• Manufactures doughnut-making equipment
• Packaging and supplies
• Sell other ingredients as well

KK & MD

Corporate

• Highly committed to providing great customer service

Management Staff

1 General Manager - $48,000

1 Assistant Manager - $37,000

2-3 Shift Managers - $10.00 [Hourly]

12-14 Team Members - $8.00 [Hourly]

• The applicant has a record of running a successful multi-unit restaurant business

Expenses

• Rent - $3200.00 (Weekly)
• ($38,400 Yearly)
• Product Replenishment - $680.00 (Weekly)

Franchise Fee - $40,000

Projected income

Glazed Doughnuts = $2,922,912 (Yearly)

Assorted Doughnuts = $2,515,968 (Yearly)

Other Products = $750,000 (Yearly)

Opening Location Demographics:

Lancaster, Pennsylvania – No current Krispy Kreme store

1. 523,594 Total Population

2. 72.5% of the population 18 or over

3. 37.7% married families

Break-Even

$5,949,704 (Year 1 Income) - 3,600,000 (Startup Cost) = $2,349,704

Break-even expected the 2nd month of the 2nd year

Annual Royalty Rate - 6.5% subtracted from gross sales (yearly)

Target Market

• Young adults (20-30 years old) primary audience
• Families with the middle-income rate
• Teenagers (14-19 years old)
• Breakfast customers
• Groups and Organizations
• Companies

Opportunity & Strategy

Invest in Krispy Kreme -

"A better quality product"

Competitive Advantage

• Brand image
• 75 years of tradition
• The store emphasizes its signature treat “Original Glazed doughnut”.
• Inexpensive doughnut prices
• Forward and backward integration
• A strong channel of distribution
• "Doughnut theater"
• Quality of product

Pricing

• 35,360 (Yearly)