As a new franchise, we can buy the latest equipment right away, whereas the older shops have to replace their old equipment, which is more costly. With an initial investment of about $1 million, including the franchise fee of $40 thousand, we will have a new building in a new location, with new equipment, and a new market where there isn't another Krispy Kreme shop near by. We plan to spend between $8 thousand and $10 thousand on our initial grand opening public relations and marketing program.
We are required to spend at least 2% of gross sales of the store for local advertising and promotion of the store. We can credit against our local advertising obligation 1 percent of the gross sales that we are required to contribute to the Krispy Kreme Public Relations and Advertising Program Fund. All advertising materials that have not been prepared or approved by the corporate offices must be submitted to them before using them. The planning responsibility of senior management includes conceiving and implementing an integrated business strategy that results in profits, growth, and clear direction for the entire organization.
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