Merry Christmas, Happy Hanukah and a Very Prosperous New Year

From the staff at Capico International

Quiznos reported to be for sale

DENVER: Sandwich chain Quiznos, the fastest-growing restaurant chain in the country, is on the auction block and could sell for as much as $2 billion, according to published reports.The New York Times and Wall Street Journal, citing unnamed sources, reported Thursday the company has hired Wall Street investment bank Goldman Sachs Group Inc. to find buyers and recently sent out material to possible purchasers.

http://www.capico.net

Great Place for Christmas Gifts

A Gift for Christmas

What can be better than giving someone the best coffee in the world as a gift.

Visit: http://www.willoughbyscoffee.com/

And you won't go wrong!!!!

Average Joe

New York is suddenly brimming with Dunkin’ Donuts stores. And with a Starbucks on every corner, a coffee class war is brewing.

Read on for a great story and click on the link below:

The Coffee War

Polish Babka Recipe for the Holidays

A Great Polish Babka Recipe

This is Robert Strydel’s (Warsaw correspondent for the Polish News) recipe for an easy yeast-raised Babka. We have tried it, and like the solid, yet airy, bread-like texture and lemony taste. It is a simple "single dough" Babka, unlike the ones made in a bakery, which are made up out of 5 (fruit-filled) rolls of dough, combined in one pan. Let’s get started. From start to finish, this may take up to 3-1/2 hours.

Ingredients

All purpose flour 4 cups
Compressed yeast 1 cake
Granulated white sugar 1 cup
Unsalted butter 3/4 cup
Milk (very hot) 1 cup
Raisins 1/2 cup
Grated lemon peel 2 tablespoons
Eggs (whole) 3
Vanilla extract 1 teaspoon

Ingredients for the icing

Lemon juice 2 tablespoons
Confectioner's sugar 2/3 cup
Water (boiling) 1 tablespoon


Preparations/ Baking

In a large bowl, mash the yeast cake with the sugar (note: the compressed yeast cake can be substituted with a package of active dry yeast; to activate, follow the directions on the package). Beat the 3 eggs and add to the yeast mixture. Heat the milk to very warm and dissolve the butter in it. Add to the mixture and add the flour, grated lemon rind, vanilla extract and the raisins. Mix well to blend all ingredients, but do not knead.Grease a 9-1/2 inch Babka pan, brioche mold, Bundt pan, or other tube pan and fill with the dough to about 1/3 full. Cover with cloth and let stand in warm place for about 2 hours (until the Babka dough has doubled in size).Towards the end of the rising, preheat the oven to 350 degrees Fahrenheit (177 degrees Celsius) place the Babka inside and bake it for about 45 minutes. Note, if you use bakeware that is dark or colored on the outside, set the oven at 325 deg Fahrenheit (162 deg Calsius). It is fully baked when a wooden pick comes out clean.After baking, remove the Babka from the oven and let it cool for a few minutes. Carefully remove from pan and dust it with confectioner’s sugar or glaze with icing.For the icing, combine the confectioner’s sugar, lemon juice, and boiling water in a small bowl and mix together.If you glaze to Babka with the icing, sprinkle it with chopped walnuts, slivered almonds, raisins or finely chopped candied orange rind, before the icing sets.Let it cool completely before serving. Wrap leftovers tightly with plastic wrap for storage at room temperature. For longer storage, you can freeze the Babka, tightly sealed in a plastic bag.

Enjoy your homemade Babka!

Great Organic Dog Treats

They are a burgeoning business focused on making the best possible treats for dogs. At The Doghouse Kitchen, *best possible* means the following:
Organic Ingredients (almost 100%!)
No Wheat
No Preservatives
No GMO, Salt, or Soy
This is a great company for baked organic dog treats.

Visit them at: http://www.doghousekitchen.com

Pets Are People Too

Pets Are People, Too, You Know

At least, P&G's Iams treats them that way, fitting human products to Fido's needs

In 2000, A. G. Lafley came to the top job at Procter & Gamble Co. with dog food on his plate. P&G had paid $2.3 billion the year before to buy Iams Co., with its Iams and Eukanuba lines of pet food, and quickly took Iams from specialty shops and veterinarian offices into 25,000 retail outlets. Such distribution muscle has helped the unit double sales to $1.7 billion last year from $800 million in 1999.

But Iams' growth is about more than just distribution. It also illustrates how the innovation machine at P&G, which has tapped different divisions to jazz up Iams with technology designed for humans, can rev up sales. Soon after the acquisition, P&G created a tartar-control coating for all of its adult pet food, adapted from the polyphosphate technology used in its Crest toothpaste line. The company is extending that formula to treats early next year. And down the road, it is considering pet-oriented extensions for everything from the Swiffer sweeper to Febreze odor remover. P&G also is thinking about introducing a pet shampoo. The goal: to profit from a global trend toward treating pets as family members, with all the pampering and products required by that higher status. "There are great similarities between the mother-baby bond and the owner-pet bond," says Iams' President Jeffrey P. Ansell, who previously worked in P&G's Pampers division.

More important, perhaps, is the way in which P&G sparked a cultural revolution within the pet food division. Iams, which was founded in 1946, has morphed from a somewhat inward-looking animal nutrition company into one aimed at, as Lafley likes to say, delighting the customer. That means more emphasis on satisfying owners' demand for such pet treats as savory sauces in Sizzlin' Bacon and Country Style Chicken flavors to sprinkle on dog food, much like a cheese sauce a mother would use to spice up broccoli. "Before joining P&G, we were pretty arrogant," says Diane Hirakawa, Iams' senior vice-president for research and development. Nutrition was all that mattered. Nobody really cared if people wanted a little something to spoil their pet. "We would never ask the consumer anything."

P&G's innovations draw from the company's practice of conducting extensive consumer research through everything from focus groups to home visits. Among the findings were consumers' persistent concerns about dealing with cats of different weights in the same household. The fat ones would simply eat from the skinny ones' bowls if owners tried to cut back. That led to Multi-Cat, a dry food with Vitamin A and L-Carnitine to reduce fat in heavier cats -- and high protein to help lean cats maintain muscle mass.


P&G, meanwhile, has found that creativity flows both ways. Iams' work in areas such as hairball control formulas sparked the interest of Metamucil executives, for example. They're using the research to better understand fiber's impact on everything from intestinal health to kidney disease. Iams' research in fatty acids helped staffers who developed a line of vitamins under the Olay skin-care brand.

Iams still faces tough rivals such as Nestlé's Purina and Wal-Mart's Ol' Roy private label brand. But it's now the nation's top pet food brand, by dollar sales, according to ACNielsen (VNUVY ) and Roper ASW, accounting for 9.9% of retail sales as of September, 2005, up from 5.7% in 1999. While insiders say Lafley remains more smitten with the potential of face peels than pet food, he clearly craves constant innovation at all brands. That has helped Iams move beyond its niche of nutritious kibbles.

Posted by Kathie Sherwood

We also handle in the bakery area pet treats. A very fast growing market!

Brioche is Great!!!

The Perfect Brioche

BRIOCHE is unlike other breads. Once referred to as “the bread of kings,” it is packed with all natural ingredients and is deceivingly light and tender. Brioche is passion.

The original makers of this brioche had their origins in Europe. The “golden” recipe was carried to this country by immigrants who demanded the same excellence of product here. At Brioche USA, they use only ingredients of the highest quality which match the original European standard.

Brioche is the darling of breads. It is not buttery like a croissant, nor sweet like a cake. There was a time it was nearly lost to the New York market, but due to the dedication of these immigrant bakers this caramel-colored delight has made a resurgence for health-conscious, discerning consumers. NO artificial ingredients are ever used.

Particularly delicious warmed and airy can be enjoyed before or after meals.

You can try this product by contacting.

Empire Desserts, Brioche USA 937 778 8787

We highly recommend it!!!!

Coffee Recipes

Jazzy Java

Coffee's not just a morning eye-opener

Your familiar morning beverage, coffee, has a hidden side - a dark side, you could call it.

You've seen it in a variety of light drinks from the hot or cold latte made with milk to a white Russian made with vodka and coffee liqueur.

It has pushed your calorie budget over the edge with sweets when paired with chocolate for mocha-flavored cakes, or cream for a dreamy coffee milk shake or a bowl of coffee ice cream streaked with caramel.

Multitudes of recipes for these coffee-flavored drinks and desserts populate the pages of popular cookbooks and restaurant menus.

What you might not have thought about is the aspect of coffee that enhances savory foods. You have to dig a little harder to find recipes for sauces, soups, marinades and entrees featuring coffee as an ingredient — your secret ingredient.

In these places, the coffee flavor doesn't scream out at you. Instead, it provides subtle undertones that add a depth of flavor that's hard to identify — something like soy sauce when it's used with a light hand, except that coffee isn't salty.

There are certain flavor pairings where coffee works best.

Coffee and tomatoes seem to have a particular affinity for one another. When you add it to tomato soup or to your favorite spaghetti sauce, you'll find that there is a new, slightly smoky flavor in it that wasn't there before. If you add too much, coffee's undesirable bitterness shows up, so it's best to start with a little.

Robust coffee flavors of the darker roasts bring out meaty flavors of beef and other meats when it's used as a rub or marinade.

It also blends well with spices and strong-flavored sweeteners such as dark brown sugar and molasses in a barbecue sauce. Here, coffee flavors add a richness if used judiciously. Too much and they overpower the other ingredients, potentially leaving a burned aftertaste — not at all the goal of this secret seasoning.

Coffee provides an undertone of earthy flavors in a beef stew or in other long-simmered meat dishes including chili. In these dishes that call for a fair amount of liquid, you can easily use freshly brewed coffee.

Using coffee to deglaze a pan is not a new idea. Remember country ham with red eye gravy? In a recipe from "Southern Country Cooking From The Loveless Cafe," by Jane and Michael Stern (Rutledge Hill Press, $19.99), you use a little brewed coffee with a little brown sugar and water in the cast iron skillet when you cook your ham. It gets its name "because when you cook a slice of ham in a pan, the ham bone, surrounded by the ham's juices, looks like a red eye."

Instant coffee granules come in handy when you need only a little bit of coffee taste. Use it as you would pepper or other powdered seasoning. Most recipes calling for powdered coffee ask for instant espresso because it delivers a robust flavor in small amounts.

BEEF STEW WITH COFFEE

Makes 6 servings
Preparation time: 30 minutes.
Cooking time: two hours.
2 1/2 pounds boneless beef chuck roast
2 tablespoons all-purpose flour
1/8 teaspoon kosher salt
Freshly ground black pepper
2 tablespoons olive oil, divided
1 tablespoon unsalted butter
1 medium onion, chopped, about 1 1/2 cups chopped
1 quart low-sodium, no-fat beef broth
3 large carrots, sliced
2 tablespoons instant espresso granules
1 tablespoon Worcestershire sauce
1 tablespoon sorghum molasses
4 sprigs fresh thyme
2 bay leaves

Trim beef of gristle and most of the visible fat, cut into bite-size pieces and sprinkle with flour, salt and pepper. Toss to mix well.

Heat 1 tablespoon of the olive oil and the butter in a heavy 5-quart Dutch oven. When butter foam subsides, add half the floured beef. Saute about 2 minutes or until lightly browned. Remove from pan. Add remaining 1 tablespoon of the olive oil and rest of the beef and onion; saute until meat is browned and onion slightly softened, about 2 minutes.

Return the reserved beef to the pan and add the beef broth, stirring to remove browned bits from the sides and bottom the pan. Stir in the sliced carrots, espresso granules, Worcestershire sauce, molasses, thyme and bay leaves. Cover with the lid ajar and cook, stirring from time to time, until the meat is tender, about 2 hours.

COFFEE BBQ SAUCE

Makes about 1 3/4 cups
1 tablespoon unsalted butter
1 tablespoon vegetable oil
1 small Vidalia onion, finely chopped
2 large garlic cloves, peeled
2 tablespoons pure ancho chili powder
1 tablespoon ground cumin
1 teaspoon ground coriander
1 teaspoon smoked sweet paprika (pimenton dulce) or regular sweet paprika
1/2 cup ketchup
1/2 cup firmly packed dark brown sugar
1 cup brewed coffee, preferably dark roast
1/2 cup low-sodium chicken broth
1/2 cup cider vinegar
2 tablespoons Worcestershire sauce

Salt and freshly ground black pepper In a medium-size saucepan, melt the butter in the oil over medium heat. When the foam subsides, add the onion and garlic and cook, stirring frequently, until softened, about 8 minutes. Add the ancho powder, cumin, coriander and paprika and cook, stirring, until fragrant, about 1 minute. Add the ketchup and brown sugar and cook, stirring, just until the sugar is dissolved, about 2 minutes. Stir in the coffee, broth, vinegar and Worcestershire, season with salt and pepper, and simmer over medium-low heat until the onions are very soft and the liquid is reduced by half, about 25 minutes.

Transfer the sauce to a blender and process until smooth. Will keep, tightly covered, in the refrigerator for up to 1 month. Use with grilled or baked chicken or pork.

PORK TENDERLOIN WITH COFFEE RUB

Makes 4 servings
Preparation time: 15 minutes, plus 2 hours marinating time.
Cooking time: 20 to 25 minutes.
1 1/4 pounds pork tenderloin
1 tablespoon espresso granules
1/4 teaspoon kosher salt
1/2 teaspoon ground cumin
1 teaspoon ground coriander
1/2 teaspoon ground cardamom
1/4 teaspoon cayenne
1 large clove garlic, grated
1 tablespoon grated fresh ginger
1 teaspoon grated lemon rind
1 tablespoon olive oil Trim pork tenderloin of all fat and gristle. Rinse and pat dry with paper towels; set aside.

In a small bowl, mix the espresso granules, salt, cumin, coriander, cardamom, cayenne, garlic, ginger and lemon rind into a paste. Rub the paste all over the tenderloin. Place it in a glass or other nonreactive dish, cover and refrigerate for 2 hours.

Prepare charcoal grill, allowing the coals to burn down to a gray ash or preheat gas grill for 10 minutes.

Drizzle olive oil all over the pork tenderloin and place it on clean, oiled grates. Cook, covered over medium heat 10 minutes. Turn and continue cooking until instant-read thermometer reads 155 degrees, about 10 to 15 minutes. Allow meat to rest 5 minutes before carving.

http://www.capico.net

Unit Of Krispy Kreme Files for Chapter 11

Another Hole!!!

We Have been watching this company and reporting the progress how a good company with greed and mismanagement can go downhill

A six-store subsidiary of Krispy Kreme Doughnuts Inc. that includes the store on Route 70 in Brick has filed for Chapter 11 bankruptcy protection from its creditors, the latest in a series of blows to the troubled company.

Freedom Rings LLC, which had been 70 percent, owned by Krispy Kreme, became fully owned by the corporation before the bankruptcy filing, spokeswoman Laura Smith said Monday. Three of the other five stores are in or near Philadelphia; the other two are in Delaware."

The Philadelphia area stores were not performing well financially," Smith said. "Many other stores around the country are performing well financially," he said, noting that there are approximately 360 Krispy Kreme locations.

Smith said the six stores remain open, and she declined to speculate if any would be closed as part of the reorganization. The Brick store at Route 70 and Chambers Bridge Road, the only franchise in Monmouth and Ocean counties, opened in July 2003.

The petition seeking Chapter 11 protection from creditors was filed Sunday in Delaware. Freedom Rings owes Krispy Kreme $24.1 million, excluding lease obligations, the Winston-Salem, N.C.-based doughnut maker said. Freedom Rings said it had sales of $22.7 million in fiscal 2005 and 220 employees. The subsidiary's petition for Chapter 11 protection said it owes all creditors less than $50 million.

A lawsuit filed earlier this month by two partners in Los Angeles-based Great Circle Family Foods LLC claimed Krispy Kreme was trying to force their company, which has 32 stores, into bankruptcy. The largest Krispy Kreme franchisee also claimed company executives misappropriated marketing money and billed for phony charges.

The company said it would "vigorously" defend itself against the charges.The company's stock, which traded for $105 in November 2000 before a pair of two-for-one stock splits, fell 26 cents, or 5.4 percent, to close at $4.60 Monday on the New York Stock Exchange. Its shares have traded in a range of $4.05 to $12.95 over the past 52 weeks.

http://www.capico.net

COFFEE HAS IT'S BENEFITS

Ten Health Benefits of Coffee

It may be time to take coffee off the list of life's guilty pleasures. New studies indicate that moderate coffee drinkers can not only enjoy their morning java jolt, but they may also get significant health benefits in the process.

This is good news for the millions of people who cannot seem to get through the day without an infusion of caffeine. Coffee is one of the few drinks that is universal. From cafes in Paris to truck stops in Japan to pubs in New South Wales, whether served as a hot, black shot of espresso, diluted with milk and sugar, or rendered virtually unrecognizable in a Starbucks' Caramel Macchiato, more than $70 billion worth of coffee is sold every year, according to the London-based International Coffee Organization. In the U.S. alone--which is the world's largest coffee consumer--the National Coffee Association of U.S.A. (NCA) estimates that retail sales alone are $19.2 billion.
Despite earlier beliefs that coffee has negative health effects, it is becoming increasingly clear that the opposite is in fact the case. Coffee consumption is now being linked to the lowered occurrence of cases of certain cancers and chronic diseases. One study, conducted by the Harvard University School of Public Health, shows that the risk for developing Type II diabetes is lower among regular coffee drinkers. There are even studies that link coffee to added endurance during physical workouts.

"The problem is that there is a preconceived notion that coffee is bad. It arrived relatively early when the studies weren't at the level of current studies," says Peter R. Martin, a professor of psychiatry and pharmacology at Vanderbilt University. "There's no compelling evidence that shows it's harmful, and everyday there's more evidence that shows coffee is beneficial."

But that isn't an excuse for a person to increase their coffee intake. It means that a moderate daily dose could very well be justified, as long as one keeps in mind that too much coffee can make a person jittery and uncomfortable.

According to the NCA, 80% of Americans drink coffee, and more than half of the population drinks it every day. It's the popularity of coffee that makes it the main source of antioxidants for Americans.

"Plants produce a lot of antioxidants. These compounds prevent the sun from causing free-radical damage to the plants," says Professor Joe Vinson of the University of Scranton in Pennsylvania. "That's why they may be good for the human body. I think antioxidants are the actual major causes of decreases in diseases. We consume fats and sugars that produce free radicals, and vitamins can't fight them alone. They need antioxidants."

Vinson and his team studied the content of antioxidants in various foods, like vegetables, fruits, tea and cocoa. They eventually decided to look at coffee as well. When they did, they found that both regular and decaffeinated coffee contain significant amounts of antioxidants, though Vinson does note that fruits and vegetables are more nutritious sources.

What kind of health benefits can people expect to receive from drinking coffee? According to Martin, "Predominantly in epidemiologic studies, there have been associations between coffee consumption and lowered rates of certain illnesses, like suicide, Parkinson's disease, Alzheimer's, Type II diabetes, colon cancer and heart disease." (Epidemiologic studies are often historical trials that are not considered definitive by clinicians.)

While it doesn't matter what type of roast a person drinks--the benefits come from both Arabica or Robusta beans--Dr. Ernesto Illy, honorary chairman of espresso giant illycaffe S.p.A, whose coffee is sold in over 80 countries, says quality is what makes drinking coffee so pleasurable.

Dr. Illy has been drinking coffee all of his life and, at the age of 80, he's healthy and drinks four cups per day. His family-owned, Trieste-based company uses only the more expensive Arabica bean, combining quality and science to create what he calls a perfect cup of coffee. To him, aroma and taste is the key to enjoyment.

While more studies are being conducted to further explore coffee's effects, plenty of benefits are already known. Now if only the same could be said of martinis...

Fast-food restaurants spruce up coffee

Facing upscale coffee heat not just from Starbucks but from the likes of Dunkin' Donuts, 7-Eleven and ExxonMobil stores, fast-food giants are brewing up fancier java to compete.

Today, Burger King will officially launch its BK Joe — brewed 100% from premium arabica beans. Sold in decaf, regular and "turbo strength" (extra caffeine), the coffee will be in all of Burger King's more than 7,000 U.S. stores by the end of November.
BK Joe is aimed at giving the chain more profit from the nation's coffee craze. Eighty percent of Americans drink coffee — 53% every day vs. 49% in 2004 — reports the National Coffee Association.

Adding up on java

Projections for coffee and specialty drinks sold in fast-food restaurants:
2005 sales (in billions)
Annual growth rates, 2006-09
Hot coffee $7 - 7%
Lattes, mochas, cappuccinos and espressos $4 - 15%Lo
Total $11 - 10.5%
Source: Technomic

Joining Burger King with better brews to go after those drinkers:

•McDonald's tested a premium roast and plans a national rollout soon.
•Chick-fil-A added a Cafe Blends line this summer.
•Subway is trying gourmet java in some stores to lure morning traffic.

Beverages are important in the restaurant business as a typically low-maintenance, high-profit item.

"Depending on how you price it, you can make 90% margins-plus," says Joe Pawlak, a consultant at industry tracker Technomic.

Quick-serve hot coffee sales in the USA this year are expected to be $11 billon, with about half at coffee shops such as Starbucks, Technomic says. Regular-coffee dollar sales are expected to grow 7% annually for the next three years, while specialty drinks — lattes and cappuccinos — are pegged to grow 15% annually.
But it's not Starbucks' customers that Burger King is trying to win. It is looking, with BK Joe, to keep its coffee-loving customers from being lured away by the improved quick cups of joe being rolled out by fast-food rivals, as well as convenience stores and gas stations.

"Our customer isn't likely to wait in line at a Starbucks or coffeehouse," says Burger King chief concept officer Denny Marie Post. "They're going elsewhere for a consistent cup of coffee, (such as) gas stations and convenience stores."

Last October, ExxonMobil launched its Bengal Traders coffee line. The gourmet blends are available in more than 1,200 Tiger Mart stations. While ExxonMobil would not disclose sales, "We're encouraged by our first year," says Russ Ritenour, manager for dispensed beverages.

Even as Burger King ups its coffee offerings, the competition continues to improve brews, too.

On Monday, 7-Eleven will announce the addition of a World Roasts gourmet line to its already upgraded selections.

LIEUTENANT SPICEYS a great hot sauce

Lieutenant Spiceys

This is a company that has developed a great sauce for just about anything you want it on.

Lieutenant Spicey's Hot Sauce is a product that has been around since the 1994. It originally began in the kitchen of Chad Brick's house one day in the fall of 1994. Chad and Matt were not able to make it to their favorite restaurant to get wings, so they decided to make their own hot sauce. The result turned out so well, they decided from that day on to keep it a secret and only make it for family and friends. That was the day Lieutenant Spicey's Hot Sauce officially was born.

From that cool fall day until June of 2005, Lieutenant Spicey's Hot Sauce of was only available one special occasions to family and friends. As with most great recipes, stories grew about the sauce and at many events both Chad and Matt were asked to make their hot sauce.

One hot June evening, the idea was decided on to turn Lieutenant Spicey's Hot Sauce into a product that people throughout the world could enjoy. Chad and Matt quickly made the decision that their recipe should not be kept to a select few individuals any more.

On June 7th, 2005, Chad and Matt officially formed Preston-Brick International, LLC to make this dream of sharing our product with the world come true.

Visit them at: http://www.ltspiceys.com

Krispey Kreme on a Downward Spiral

Krispy Kreme Told to Restate Past Earnings

By THE ASSOCIATED PRESS
Published: August 10, 2005

CHARLOTTE, N.C. (AP) -- Krispy Kreme Doughnuts Inc. needs to restate its past earnings downward by $25.6 million over the past several years, according to a report issued Wednesday by a special committee examining the finances of the troubled snack maker.
Former Chief Executive Scott Livengood and his aide, John Tate, bear most of the responsibility for the once high-flying company's problems, said the report from independent directors who have been examining the company's finances since last fall.
''The Krispy Kreme story is one of a newly public company, experiencing rapid growth, that failed to meet its accounting and financial reporting obligations to its shareholders and the public,'' according to the report. ''While some may see the accounting errors discussed in our summary as relatively small in magnitude, they were critical in a corporate culture driven by a narrowly focused goal of exceeding projected earnings by a penny (per share) each quarter.''
No one interviewed by committee members acknowledged such manipulation, but the committee remained cautious.
''The number, nature and timing of the accounting errors strongly suggest that they resulted from an intent to manage earnings,'' the report said. ''But we never received credible explanations for transactions that appear to have been structured or timed to allow for the improper recognition of revenue or improper reduction of expense.''
The doughnut maker based in Winston-Salem, N.C., is under criminal inquiry by a federal prosecutor in New York and is the target of a Securities and Exchange Commission probe into financial irregularities.
Several lawsuits have been filed against Krispy Kreme, including one that alleges workers lost millions of dollars in retirement savings because executives at the company hid evidence of declining sales and profits.
The report recommended restating earnings downward by $22.2 million for 2001-2004 and by $3.4 million for previous years.
The special investigative committee was co-chaired by Michael Sutton, formerly chief accountant of the SEC, and Lizanne Thomas of the Jones Day law firm.
''The completion of the special committee report represents an important step forward for Krispy Kreme, both in understanding what occurred and in providing the framework for our upcoming restatement of our financial statements,'' Krispy Kreme Chairman James Morgan said in a prepared statement.
''Krispy Kreme is a powerful brand, and we believe we are making progress every day in getting the company back on track to realizing its full potential.''
The report said company executives made key errors that led to its problems, including significant losses to its shareholders. The company's stock, which sold for as much as $105 in November 2000 before a pair of two-for-one stock splits, was up 41 cents Wednesday to $7.56 on the New York Stock Exchange in late-morning trading.
Krispy Kreme officers and other employees who had substantial involvement in the accounting errors have left the company, according to the report. The committee also concluded that the company should not sue any current or former directors or executives.
In January, Krispy Kreme forced out Livengood, turning to turnaround specialists Stephen Cooper and Steven Paganos to try to overcome sinking profits.
Cooper previously led the turnaround at Boston Chicken, which declared bankruptcy in 1998. That was just five years after the restaurant chain went public with fanfare similar to that surrounding Krispy Kreme's initial public offering in 2000.
''While the company still faces serious challenges, we believe we are addressing the critical issues,'' Cooper said in a statement issued Wednesday.

Franchising your business or not!!!

So You Want to Franchise Your Business!

One of the greatest advantages of franchising is that it allows business owners to expand their business using "Other People's Money." Franchisees typically pay for all the startup costs for each new unit. Real estate, build-out, inventory and the negative cash flow of starting a franchise are all borne by the franchisee. What's more, the franchisee typically pays the franchisor an initial franchise fee that helps defray the franchisor's cost of providing any initial assistance (such as training, site selection assistance, initial support, etc.).

This system is extremely powerful, as it essentially frees the franchisor from capital constraints--and allows the franchisor to open franchises virtually "as fast as they can sell them." But that last sentiment, while true in some respects, can be a very dangerous sentiment if taken too literally.

While franchising is a "low cost" means of expansion, it is not a "no cost" means of expansion. And, as with most new businesses, one of the most significant causes of failure for new franchisors is undercapitalization.

One of the most important things to remember when making the decision to franchise is that you are creating a new business--not simply an extension of your existing business. Regardless of the business you started in, you need to understand that franchising is the business of selling and servicing franchisees. And your first and most important priority must be to make your franchisees successful.

While this new business allows you the ability to grow very quickly in a highly leveraged way, you still need money to make money. So how much is enough?

The 31 Flavors of Franchising

Over the years, we have heard consultants and pundits float all kinds of estimates for the costs involved in franchising your business. Unfortunately, these estimates can vary considerably. This is due, at least in part, to the fact that franchising can be done in a number of different ways. The bottom line: The most important factor you should take into account when estimating the costs of franchising is the aggressiveness of the desired expansion program.

Say, for example, you want to open one or two more units in your local market by franchising. Perhaps you're looking to provide an opportunity to your relatives or existing employees. Perhaps you only have modest expansion goals.

In this scenario, you, as a prospective franchisor, need only to figure out two basic costs: legal and quality control.

Legal Costs. You should retain an attorney who is a franchise specialist, as this area of the law is highly regulated and complex. From a legal standpoint, an inexpensive attorney specializing in franchising might develop your basic legal documents (franchise agreement and Uniform Franchise Offering Circular) and other related work (trademark protection, license agreements, etc.), for as little as $25,000. Depending on the state where you offer and open franchises, you may also need to comply with state registration laws that could cost several thousand dollars more.

You'll probably want to create a new corporation and need to have a CPA conduct an opening audit of that company's balance sheet (up to three years of historical audits are required if the existing company will be the franchisor, but most new franchisors opt for the creation of a separate franchise entity for a variety of reasons). And while certain states look askance at a weakly capitalized franchisor, in no registration states, there are no laws or guidelines governing initial capitalization, so a couple thousand dollars might cover the creation of this new entity.

Quality Control. Despite a desire for conservative growth, you still want to control quality--after all, you've built your name and reputation over the years with painstaking care, and you won't want to take a chance on hurting your existing business by allowing the brand to suffer. Thus, you need to create an operations manual that will be the governing document controlling quality within the system. Without this operations manual, you run significant risks relative to brand maintenance, as the operations manual defines the standards of quality required of the franchisee, and is incorporated directly into the legal contract between franchisor and franchisee.

While some entrepreneurs choose to develop their own operations manuals internally, this path carries certain risks. The operations manual, if properly crafted, not only controls quality, but also limits the franchisor's liability relative to the acts of the franchisee and the franchisee's employees. To do that, the operations manual needs to cover not only day-to-day operations, but a wide array of topics, in a way that does not create incremental liability through negligence or inadvertently creating an agency relationship. But even if you were to create a professionally developed operations manual using a company such as mine, the costs of developing this manual would likely run under $25,000.

So to sell a few franchises locally, the documents needed to get started could be developed for about $50,000. But what if you have more aggressive growth plans?

How High is "Up"?

If you're seeking to franchise aggressively, however, these costs can increase significantly.

Legal Costs. Legal expenses for a more aggressive rollout may include additional state registrations and more aggressive and/or complex development contracts (area development contracts, area representative contracts, etc.). There are 14 registration states and a number of business opportunities states--each has franchise registration fees aggregating somewhere north of $6,000, not including the incremental legal costs your franchise attorney charges you. All told, the legal costs for this more aggressive franchise program can reach $50,000 or more.

Planning Costs and Consideration. A more aggressive growth strategy, by its very nature, also requires additional planning. While a company planning on conservative growth can probably get away with a fairly informal planning process, aggressive growth dictates a thorough understanding of the competitive environment and the financial implications of each business decision. You need to build these financial and structural decisions on a solid understanding of the organization, and know the costs of building that organization in terms of people and capital.

The aggressive franchisor must bear in mind that even seemingly small mistakes, when multiplied by hundreds of franchisees, can be the difference between success and failure. Take royalties, for example--while the difference between a 4 and 5 percent royalty may seem small, that additional 1 percent could cost the franchisor $5,000 to $10,000 or more per franchise sold. That "1 percent mistake," when multiplied by 100 or more franchisees and by five or more years on the contract, can easily mount into the millions.

Unfortunately, this more thorough planning process can be quite expensive. Depending on the nature and scope of research conducted on the market and on competitors, the amount and complexity of financial planning, and various other factors, the costs of hiring a consultant to assist in the development of these plans could range between $25,000 and $35,000. In more complex situations, this planning can become significantly more expensive.

Quality Control. With more aggressive expansion plans, quality control will also become both more cumbersome and more expensive. With more franchisees going through the system, there will be a need for a more formalized training program, and perhaps training videotapes and other training tools. Again, this could double the costs of your quality control.

Marketing Your New Franchise

Of course, the biggest difference between the conservative and the aggressive growth franchisor is in the areas of franchise sales and marketing. While the conservative franchisor will be content to let prospective franchisees come to him and operate in a reactive fashion, the aggressive franchisor will want to "make it happen."

Brochures. Your marketing efforts start with the development of professionally designed materials. A full-sized, four-color brochure is virtually the cost of entry in modern franchising. This brochure not only sells the franchise opportunity to the prospective franchisee--it also plays a key role in demonstrating the credibility of the franchise to key influencers: accountants, attorneys, bankers and spouses, who will play a key role in the franchise selection process. The design of a good brochure will cost between $7,000 and $10,000. Printing this brochure, depending on print process, paper quality, quantity printed, and a variety of design specifications (full bleeds on pages, dye cuts, stapling, etc.), will cost another $8,000 to $10,000.

For companies with physical units, or companies that plan on using a lot of direct mail or trade shows to promote their franchise, another great tool is the mini-brochure. This brochure, typically done in a two- or three-fold format, can be produced in quantity relatively inexpensively (design costs and printing costs totaling around $5,000), and serves as a lead generator more than as a credibility piece.

Internet. A professionally designed website is also essential. In addition to franchise information, your website should be equipped with lead collection forms and, ideally, an auto responder matrix that helps you sort the wheat from the chaff. And this site needs to be optimized for franchising. While websites are increasingly less expensive to create, you should still budget $10,000 to $15,000 for a really good one.

For franchisors looking for more aggressive growth, franchise sales videos are increasingly important in the sales process, as streaming video becomes a more integral part of the internet. Professionally produced videotapes promoting the franchise offering can generally be developed for between $15,000 and $25,000.

Marketing Budget. At least as important as the marketing materials will be your marketing budget. Depending on the size of the investment in a franchise opportunity, you should budget between $5,000 and $7,500 (and in some instances more) per franchise to be sold to a promotional budget. If you're planning to sell 20 franchises in your first year, an annual marketing budget of between $100,000 and $150,000 is not at all unrealistic. Of course, some of these funds will be recaptured as you begin to realize franchise fee income, but since it takes an average of 12 weeks to sell a franchise, as an aggressive franchisor, you should have at least have five to six months worth of advertising money--or about half your annual budget--on hand when you get started.

To optimize these expenditures, you should also invest in primary market research (to better understand your prospective franchisee) and in a first-rate marketing plan. While inappropriate for more conservative franchisors, these planning activities will add another $10,000 to $15,000 to the budget.

Hiring a Sales Force

But the single biggest investment you'll have in the development of an aggressive franchise company will be in your people.

Most companies getting into franchising for the first time do so by leveraging off of their existing staff. Often, the business founder acts as the primary franchise salesperson, with support from staff in the areas of operations and training. And while this works in most growth scenarios, the more aggressive the growth scenario, the sooner you should plan on bringing on incremental staff to fill key roles in the areas of franchise sales, franchise training and field support.

The first hire for the aggressive franchisor is generally the franchise salesperson. A proven franchise salesperson will generally command a compensation package in the low six figures, with at least some of this package being performance based. Top franchise sales pros can command twice the salary or more--but are generally worth their weight in gold. Again, you should expect the franchise salesperson to begin earning his keep by selling franchises relatively quickly (a good franchise salesperson should be able to sell 12 to 20 franchises per year), but you should anticipate the need to fund at least four to six months of their salary without any fee income. Add to this salary the fees you'll pay to an executive recruiter to locate this top talent (who will generally command a fee of 25 percent of first year's compensation), and you can probably budget $75,000 in personnel costs before selling the first franchise, should you go this route.

Other hiring generally comes later--after franchise sales have started and the royalty stream is established--but again, the more aggressive the growth, the earlier these hires need to take place.

Cash Flow Analysis

While this article provides an overview of the costs of getting into franchising, the best way to get a reasonable understanding of all these costs is to develop a cash flow analysis that accounts for all your hiring, marketing, legal and development needs, as well as for the inflow of franchise fees, royalties and other sources of income. While many factors will influence your ultimate cash need, a good rule of thumb is that an aggressive franchise program may require a cash flow budget of $250,000 to fund development costs and franchise growth until franchise sales begin "paying for" incremental personnel and advertising needs.

But remember, rules of thumb, like thumbs in a softball game, are often broken. Many franchisors have succeeded in growing significant franchise companies with far less--while others have failed at franchising after investing far more.

While it is important to be properly capitalized to franchise, it is important to remember that the costs of creating this franchise company, even in aggressive growth scenarios, is often less than the cost of starting just one more company operation. That investment in a franchise program can grow to be a franchisor with hundreds, or perhaps thousands, of franchised units, providing you with leverage not found in any other means of business expansion.

Starting Your Own Business

Starting Your Own Business
You Have A Great Idea!!!

Your heart pounds. You smile. You have a sense of lightness. Excitement abounds. You are inspired. Life has a new meaning. What is the object of all this positive energy? An idea!

The experience of getting a new idea is wonderful. What follows can also be fun and exciting, when you have a plan and know what it takes to carry your idea from conception to reality.

What does it take to give bright ideas their start? It's true that creativity and inventiveness are among the qualities required, but being able to dream is only a small piece of the success. Dreaming a dream is one thing, but bringing the dream to market is another dimension entirely. Business is all about making money, which means the bottom line is the bottom line.

The best way to prepare to launch a new idea is to become a "Know-it-all" - it is essential to be an expert on your subject. This means educating yourself about all aspects of it.

Educating yourself needs to be both open-ended and focused, to provide the freedom necessary to explore unexpected leads. Success at this stage often depends on how open-minded you are. If you enter the education process with even some preconceptions, you are likely to miss important learnings. Preconceptions have a way of limiting your vision to what you already know.

Adopt a spirit of adventure about learning new things. If you fear learning new information because it might undermine your idea, then you will miss major insights.

There is good news in everything you learn, if only your vision is broad and clear enough to see it. Take what might be the worst possible thing you learn – your idea has already been done and patented by another company. At this point you may be devastated. By looking for the positive in this, you might see —

— How a joint venture with the company holding the patent could be an even bigger idea
— How you can use the learnings and experience from working on this project to benefit your company in other ways.

When you want to see the benefits, you will see them. This attitude is crucial to your success at this early stage.

Focus also helps the education process, but there is a vast amount of information available today on virtually any subject. You can get so caught up in the research and discovery phase that you lose perspective and fail to initiate action.
In general, you'll need to start by getting background information about the following topics —

— Your company's strategy and goals
— General business and economic conditions
— Your industry
— Your market
— Your idea

This information will help you form some opinions about the overall climate and how your idea might fare given current conditions. As you become more convinced of its potential, you can delve deeper into specifics that will ultimately become part of a formal business plan. Everything you discover will contribute to your idea's potential for success.

Done right, the education process greatly enhances the probability of success. Look at education as the foundation of the building process. If your understandings and learning’s are not solid at this stage, then at minimum you will waste considerable time and more likely you will make weak recommendations that, if implemented, will have a higher than necessary probability of failure.

The process of educating yourself is a necessary one. To sell an idea, you must be sold on it yourself. If your idea is truly viable, this process will help you become sold. That doesn't mean simply being enthusiastic or even passionate about your brainchild. It means knowing there truly is a market for it.

For additional information visit our web site: www.capico.net

Franchising Pitfalls

FRANCHISING YES OR NO?

Buying a franchise can be a quick way to set up your own business without starting from scratch. But there are also a number of drawbacks. It is not a golden road to riches.

Advantages

Your business is based on a proven idea. You can check how successful other franchises are before committing yourself.
You can use a recognized brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise - the "franchisor".
The franchisor gives you support - usually including training, help setting up the business, a manual telling you how to run the business and ongoing advice.
You usually have exclusive rights in your territory. The franchisor won't sell any other franchises in the same region, though there will be competition from other businesses.
Financing the business may be easier. Banks are sometimes more likely to lend money to a franchise with a good reputation.
Risk is reduced and is shared by the franchisor.

Disadvantages

Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing royalties and you may have to agree to buy products from the franchisor.
The franchise agreement usually includes restrictions on how you run the business. You might not be able to make changes to suit your local market.
The franchisor might go out of business, or change the way they do things.
Other franchisees could give the brand a bad reputation.
You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.
Reduced risk means you might not generate vast profits.
Am I suited to franchising?
As with any new business venture, you need to carefully consider whether you have got the right skills and attitude to run a successful franchise. Analyzing your own temperament can also help you decide which type of franchise would be right for you.

Assess yourself

You must be prepared to sell. A franchise gives you a business blueprint - but it won't give you customers.
You'll need to work hard, probably for long hours. Do you have the necessary stamina?
Running your own business can be stressful. Think how you react to pressure.
You may be starting up in business because you want to be your own boss. If so, would you be happy with the restrictions imposed by a franchise arrangement?
On the other hand, you may want to limit your risk. You might be more comfortable with a franchise than starting a new business from scratch.
The right franchise for you
Do you like office work? Or would you prefer a business that involves physical labor?
Are you happy working on your own? Or would you be good at recruiting, training and managing employees?
Do you like dealing with members of the public? Or would you prefer a franchise where you sell to business customers?
Are you weak in particular business skills such as finance? Can you find a franchise that offers the support you need in those areas?
Find out about possible franchises
You can find out about possible franchise opportunities from a range of sources.
details of members who may be offering new franchises
details of members who may be offering existing franchises for resale

Franchises are advertised and written about in various national newspapers and in trade publications
You can find other listings using a search engine and employing search terms such as franchise opportunity or franchise directory.
Attending a franchise exhibition can also be a good way of finding out what's available in franchise opportunities - particularly multi-level marketing schemes - can be untried, dishonest or even illegal. Assess the franchise opportunity carefully
Assess a franchise opportunity
To assess whether a franchise represents a sound business opportunity, you'll need to consider:
what the business is and how it operates
the location of the franchise
the success of the franchise concept - the number of franchises in the UK and how financially successful they are
the strength of competition from other businesses
how long the franchisor - the company offering the franchise - has been in business and how financially secure it is
levels of initial and ongoing costs
how much training and support you'll get in setting up and running the business
conditions and restrictions in the franchise agreement, including how long it will run and whether you'll have the option to renew
The franchisor will probably give you an information pack but you shouldn't just rely on this. Ask questions and look for evidence of their claims.
Visit other franchisees and talk to them. Ask the franchisor for a full list of past and present franchisees, not just the two most successful ones.
Take advantage of other sources of information and advice. Ask your bank - many have franchising specialists. And make the most of other advisers such as Business Link, your solicitor or your accountant.
How a business plan can help
Just as you would for any other business, you need to draw up a business plan when buying a franchise. This will help you assess the prospects for the business and identify potential weaknesses. A business plan is also essential for raising finance.

The costs of a franchise

When calculating the likely cost of a franchise, you need to take both initial and ongoing fees into account.
Initial costs
The franchisor - the company which sells you the franchise - usually charges an upfront fee. This should be a relatively low administration fee. Good franchisors make most of their profits from continuing royalties.

Your largest initial costs are usually your investment in:

premises
equipment
initial stock

Continuing costs

You usually pay a royalty - a percentage of sales - to the franchisor. Alternatively you may pay a management fee of some kind.
Under the terms of the franchise agreement, you may have to purchase stock from the franchisor. Check what they charge. They may mark up the prices - or they may be able to offer them to you at a discount because of their purchasing power.
You also have to pay the usual business costs - for example, rental on premises, utilities or the costs of any employees you take on. Again, check whether anything you pay for through the franchisor has a realistic cost.
Check too whether the agreement includes additional charges. For example, you may be required to pay for training, or contribute to the cost of national advertising campaigns.
How to purchase a franchise
There are a number of key things you should and shouldn't do when planning to purchase a franchise.

Do:

Assess yourself to see what kind of franchise, if any, will suit you.
Find out what franchises are available.
Assess franchise opportunities carefully, ask questions and talk to other franchisees.
Investigate the financial prospects for the business.
If you'll need to raise bank finance, ask your bank if it will consider a loan for the type of franchise you're considering.
Do your own market research into customers and competitors in your area.
Draw up a business plan.
Check the franchise agreement and get professional advice.

Don't:

Take up the first opportunity before investigating alternatives.
Allow yourself to be hurried into making a decision.
Pay any non-refundable deposit.
Commit yourself before you're completely satisfied.
Assume a business will work in your area just because it works elsewhere.
Rely on the forecasts provided by the company selling you the franchise.
Sign any agreement without legal advice.

Tips on franchise agreements

The franchise agreement is crucial. Don't sign any agreement, or pay any fees or deposit, until you have taken legal advice from a solicitor. Get a specimen contract for them to review.

Areas covered by a typical agreement

Term - how long does the franchise last? Will you have the option to renew it, and on what terms?
Territory - what area does your franchise cover? Do you have exclusive rights to sell within it?
Fees - what initial fee will you pay? What royalties will you pay on sales? Will you pay a regular management fee? Will you have to pay other costs? How are the costs worked out?
Support - how much help will you get starting the business? What continuing support will you get?
Restrictions - what restrictions are there on what you're allowed to do and how you must run the business?
Exit - what happens if you can't continue in business for some reason - perhaps due to ill health? What happens if you want to sell your franchise?

OUR NEXT ARTICLE WILL BE ON WHY COMPANIES SHOULD OR SHOULD NOT BE A FRANCHISOR

Should Krispy Kreme get away with your money

This is another example of a company just lying and filling there own pockets

This has to stop as Krispy Kreme prepares for bankruptcy

Krispy Kreme seeks dough in bid for turnaround of chain's woesNew execs' staff cuts, sale of corporate jet would save millions

By Sarah E. LockyerWINSTON-SALEM, N.C. (Feb. 22) -

Krispy Kreme Doughnuts Inc., once a company concerned with serving hot glazed doughnuts, now is consumed with getting cold, hard cash to avoid potential financial collapse.

The operator or franchisor of 401 doughnut-and-coffee shops and a wholesale doughnut operation disclosed a pending cash crunch earlier this month as it outlined plans to save more than $10 million per year with staff cuts and the divestiture of a corporate jet.

The revelations by a newly installed team of turnaround managers caused some analysts to discuss the possibility of a bankruptcy for the longtime doughnut chain icon of the Southeast. Its status in recent years as a darling of stock investors and worldwide franchisees almost has vanished amid slumping sales, a regulatory investigation, shareholder lawsuits and a free-falling stock valuation.

Krispy Kreme, which boasted annual corporate revenues of $665.6 million and a share price near $40 at this time last year, saw its stock hit an all-time low Feb. 10 — $5.85 — that was the result of news that the company had agreed to pay $400,000 a month to the turnaround firm supplying its new top two executives.

To reduce other expenses, Winston-Salem-based Krispy Kreme also said it had shrunk the number of corporate employees by 25 percent, or about 125 people, which would save $7.4 million annually. It also sold the lease to a corporate jet to save $3 million each year. For those actions, restructuring charges totaling $900,000 will be logged in the current first quarter of Krispy Kreme's fiscal year 2006, the company said.

"Krispy Kreme is a great brand," Steven G. Panagos, Krispy Kreme's new president and chief operating officer, said in a statement, "and we are working very hard to help the company rediscover its potential."

But the cost-saving first move by Krispy Kreme's new turnaround leaders — Panagos and chief executive Stephen F. Cooper, who replaced former chief executive Scott A. Livengood last month — was not met with positive reviews from some analysts. Indeed, it was coupled with a warning that the company soon would need additional credit from lenders to fund operations and capital expenditures.

"We wonder if [aggressive cost cutting] will be enough given hemorrhaging sales in the past 12 weeks," John Glass at CIBC World Markets in Boston, wrote in a research note. "Given this scenario, bankruptcy and debtor-in-possession financing could be one possible option," he continued.

Executives Cooper and Panagos, chairman and managing director, respectively, at New York-based Kroll Zolfo Cooper LLC, are being paid a combined $1,455 per hour as part of Krispy Kreme's monthly payments of $400,000 for the services of the turnaround firm. Cooper concurrently is the interim chief executive at another embattled company, Enron Corp. Krispy Kreme also is paying the executives' out-of-pocket expenses and a $200,000 security retainer, a filing with the U.S. Securities and Exchange Commission said. In addition, a "success fee" for KZC that was under negotiation would be determined within 60 days of the Feb. 10 filing.
The day after Krispy Kreme announced its cost-cutting initiatives and admitted to its need for cash, company shares crashed as much as 10 percent. At market close on Feb. 9, Krispy Kreme shares were down 73 cents, or 9 percent, to $7.21. Shares fell an additional 16 percent on Feb. 10 to close at $6.06, after hitting the new all-time low earlier that day of $5.85.

Analysts contend the road ahead will be tough for Krispy Kreme, with a steep number of store closures an almost foregone conclusion and at least a few quarters of continued weak sales and expensive restructuring and regulatory efforts awaiting the chain. Krispy Kreme is facing a formal SEC investigation into its accounting practices and a pending class-action shareholder lawsuit against former company executives, including Livengood.

To accomplish a turnaround from two recent quarters of net losses and declining retail and wholesale sales, Krispy Kreme will need money fast, analysts contend.

"We believe the store base should be reduced from the current base of around 400 stores to about 330 with hopes of increasing average volumes and store profitability," analyst John Ivankoe of J.P. Morgan Securities Inc. in New York said in a note to clients. "These cuts are necessary in the near term but are only possible through cooperation from creditors and possibly with the assistance of outside financing."

Restaurant analyst Glenn Guard at Legg Mason Wood Walker Inc. in Baltimore contends that the cost of closures may hover around $1.4 million per doughnut shop. He called for Krispy Kreme to shed a total of 48 units systemwide in the current fiscal year, including 24 corporate locations, which would lead to expenses of $33.6 million.

Krispy Kreme currently cannot borrow additional money from its lenders without consent because of its failure to deliver finalized financial results for the quarter ended Oct. 31. The company has until March 25 to submit those quarterly results without defaulting on credit agreements.

The company said in a statement that it "presently is working on a business plan and intends to conduct discussions with its lending banks." Krispy Kreme, which holds a $150 million credit facility, had drawn $90.9 million as of last October.

Other cash obligations of the company are "substantial," according to analyst Glass at CIBC. He outlined about $380 million in fixed expenses, including $112 million in long-term debt, $155 million in lease obligations and $114 million in commodity purchase commitments.

The missing link, however, is whether Krispy Kreme holds substantial off-balance-sheet franchise obligations. Roger Lipton, president of Lipton Financial Services, a money management firm in New York, said such obligations could be the company's downfall, much like Boston Chicken Inc., which operated the Boston Market chain in the early 1990s. That chain buckled under loans to its franchisees and was forced to declare bankruptcy.

"We know [Krispy Kreme] invested in their franchisees," Lipton said. "But we don't know to what extent they might have guaranteed the debt of franchisees. If they avoided that, I don't think there is enough leverage here to put it into bankruptcy."

Lipton said the company should have enough cash flow, after a downsizing of both the chain and corporate expenses, to keep the brand afloat. "I see them closing stores that are too big, that require huge opening volumes to be sustained and a lot of wholesale business," he said. "The chain must be downsized; whether they chop it in half or not, it must be downsized and then rebuilt."

While Krispy Kreme continues its free fall — bankruptcy or not — other chains in the coffee-and-snack segment are forging ahead with increased sales and unit expansion. Canton, Mass.-based Dunkin' Donuts, the 6,000-unit chain owned by Britain's Allied Domecq PLC, said worldwide sales increased 13 percent to $3.6 billion in fiscal year 2004 ended last August. The company also said its same-store sales growth is up.

Tim Hortons, the 2,632-unit doughnut chain owned by Dublin, Ohio-based Wendy's International Inc., also boasted increased same-store sales of between 9.3 percent and 9.7 percent for January. Through the first nine months of fiscal year 2004, ended last Sept. 26, same-store sales jumped 10.1 percent over year-earlier results. The Wendy's subsidiary opened 38 Tim Hortons units in its most recently completed third quarter and has plans to reach the 500-store level in the United States over the next three years. The chain's third-quarter sales were $157.6 million, a 28-percent increase from sales of $123.1 million in the third quarter of 2003, and Hortons' operating income also grew almost 19 percent.

The largest player in the segment, Starbucks Corp., reported a 31-percent jump in first-quarter earnings on record revenues of $1.6 billion for the period ended Jan. 2. The Seattle-based operator and licensor of 8,994 Starbucks Coffee locations booked a 7-percent same-store sales increase at corporate units open at least 13 months for the four weeks ended Jan. 30.
Krispy Kreme, which has not filed a quarterly earnings report with the SEC since last September, last month said it would have to restate its financial results for fiscal 2004 and first two quarters of fiscal 2005.

Coffee can reduce liver cancer

DRINK TO YOUR HEALTH: Coffee Fights Risk of Liver Cancer

Drinking coffee significantly reduces the risk of liver cancer, according to a study just published in Japan. A research team led by Ichiro Tsuji at Tohoku University found the chances of developing liver cancer were significantly lower among coffee drinkers versus non-drinkers, and that the protection is higher in those who drink a cup or more daily.

Halving Risk

Using a base figure of 1 for non-coffee drinkers, those who consumed one or more cups a day had a risk level of 0.58, while those who drank less than one cup exhibited a level of 0.71. That means drinking one or more cups of coffee a day reduces one’s chance of developing liver cancer by almost half, while coffee drinking in smaller quantities cuts the risk by about a third.

The study examined the habits of 61,000 adults aged 40+ over a period of seven to nine years. Demographics and behaviors were tracked, with allowances made for factors such as sex, age and habits. The findings were consistent across the group despite these variables, isolating coffee drinking as the cause of the protective effect.

Chlorogenic Acid

While Tsuji has yet to pinpoint the substance in coffee that appears to ward off the development of cancer, chlorogenic acid – a powerful antioxidant present in coffee beans – has been shown in animal studies to cut cancer risk. Chlorogenic acid has also been shown to help lower the risk of cirrhosis in humans. The risk of liver cancer, in fact, increases in people who have suffered such liver ailments in the past.

In past studies, the protective effect of coffee on cirrhosis is well documented. Coffee has been shown to protect the liver in those at higher risk of liver damage, such as those suffering from diabetes or viral hepatitis. Among subjects with these risk factors, two or more cups of coffee a day cut liver damage in half. The greater the consumption of coffee and other caffeinated beverages, the lower the risk for liver injury, even adjusting for other risk factors such as age and smoking.

Colorectal Cancer

Coffee has also been shown in previous studies to provide strong protection against colorectal and other cancers. A compound found almost exclusively in coffee and coffee products, methylpyridinium, has been proven to significantly reduce the risk of colorectal cancer. Clinical studies demonstrated, in fact, that decaffeinated coffee also delivered the protection, while decaffeinated tea provided no benefit whatsoever.

The On Going Rip-Off of Krispy Kreme

How not to run a business

Krispy Kreme to pay turnaround team $400K per month

WINSTON-SALEM, N.C. (Feb. 10) - Krispy Kreme Doughnuts Inc., based here, agreed to pay turnaround firm Kroll Zolfo Cooper LLC $400,000 per month to help return the operator and franchisor of 401 doughnut-and-coffee restaurants to profitability, the company disclosed in a filing with securities regulators.The monthly payment includes the previously reported hourly wages for Kroll Zolfo Cooper's executives Stephen F. Cooper and Steven G. Panagos, who last month were named Krispy Kreme's chief executive and president and chief operating officer, respectively. Cooper will be paid $760 per hour, and Panagos will be paid $695 per hour. Krispy Kreme also is responsible for payment of out-of-pocket expenses and a $200,000 security retainer, according to the Thursday filing with the U.S. Securities and Exchange Commission. In addition, a "success fee" for Kroll Zolfo Cooper is under negotiation and will be determined within 60 days.

Krispy Kreme grew too fast

I have always been of the belief that companies like Krispy Kreme have just lied to the public with a product only a select want. They will fall by the wayside like Manhattan Bagel (stole from stockholders, New World Holdings ( had a bad dream and stole). The following is an article worth reading. BEWARE!!!!!

Can Corporate fix-it firm fill the holes at Krispy Kreme

By Matt Krantz, USA TODAY
Krispy Kreme's (KKD) just-ousted management team might have known how to make a mean doughnut. But when it came to making money, it was a different story.
So the company turned to Kroll Zolfo Cooper, the giant corporate fix-it firm that has parachuted into some of the modern era's stickiest corporate messes. It has taken on mopping up high-profile corporate disasters ranging from Enron to Sunbeam and Polaroid.
But can this firm fix the woes at Krispy Kreme that previous management could not? Some might be more suspicious, since Kroll Zolfo Cooper is owned by a company in need of some crisis-management help of its own.

It's a division of Kroll, which is owned by Marsh & McLennan, the insurance broker whose CEO was ousted after the company was implicated in a bid-rigging investigation.
Despite the odds, turnaround experts say they'd bet on the success of Kroll Zolfo Cooper and its chairman, Stephen Cooper.

"He has a stellar track record," says Bill Brandt, CEO of Development Specialists, another leading fix-it firm. "I think he can do it."

But Brandt adds that the turnaround is likely more difficult than widely thought. After all, he says, if Krispy Kreme's woes were just about the doughnuts, it would have just hired an executive with food experience. "When you skip that and go to the restructuring guy, the problems run deeper than food," he says. "This tells me this is a more difficult situation than the Krispy Kreme people have been letting on."

Kroll Zolfo Cooper certainly knows what it's in for. Its tie with Kroll gives it access to former CIA and DEA agents who assist in fraud investigations and forensic accounting, says Lewis Freeman, principal of fraud detection and turnaround firm Lewis B. Freeman, which has hired Kroll.

Krispy Kreme is hoping Kroll Zolfo Cooper can add it to past successes, including:
•NRG Energy. When the Kroll Zolfo Cooper arrived at this struggling energy firm in August 2002, it was near financial death. But in 14 months, Kroll Zolfo Cooper retired $1.2 billion in debt and boosted annual cash flow 38%. The company has relisted on the New York Stock Exchange.
•Sunbeam. This maker of household products was headed into bankruptcy shortly after the reign of former CEO Al Dunlap. The lenders hired Kroll Zolfo Cooper in 2000. Cooper vetted the management team's plan and set up a computer to manage cash flow. Sunbeam emerged from bankruptcy protection, renamed itself American Household, and was bought last September by Jarden for $745 million.

"Steve is as good as what people say he is," says Jerry Levin, CEO of American Household. "I hope he's successful. I happen to like Krispy Kremes."

Consumer Report-Coffee

Consumer Reports: There's a lot of coffees out there

In lieu of the brew itself, perhaps these facts about coffee will prove stimulating:

· Americans drink more coffee per capita than the people of any other nation.
· There are two main types of coffee beans: robusta and arabica. Robusta plants are hardier, while arabica beans can make higher-quality coffee.
· Caffeine can be removed from coffee via a solvent, liquefied carbon dioxide, or a hot-water process. Even so, decaffeinated coffee isn't necessarily free of the stuff: It generally has 5 mg or less caffeine per 6 ounces, vs. 50 to 90 mg for regular coffee.
· Coffees labeled as being "100 percent" beans of a type or region are supposed to consist only of those beans. Sometimes such a claim is certified, as by the Colombian Coffee Federation's Juan Valdez logo on 100 percent Colombian coffees.

We recently tested 33 Colombian coffees (caffeinated and decaffeinated), along with nine caffeinated Kona coffees produced from beans grown in the rich volcanic soil of Hawaii's rainy highlands. Among the 42 brews were national and store brands, as well as those sold in specialty shops and online.

In blind tests, our expert tasters looked for such desirable flavors as "floral" (like the scent of a mixed-flower arrangement) or "earthy" (think clean, moist soil), while noting negative attributes including "cereal" (a grainy flavor common to cheap beans), "burnt" (a taste redolent of charred beans) and "astringent" (it might make your mouth pucker).
We tested whole-bean and ground coffees, preparing them according to manufacturers' instructions. When those instructions allowed, we made adjustments to improve flavor.
Some of our findings:

· Whole beans usually bested ground. Three of our four best-tasting coffees are whole bean.

· Decaffeinated can be first-rate. Some decaffeinated versions of coffees outshine or nearly match their regular brandmate

· Kona coffees can be second-rate. They're especially expensive (two we tested cost $30 per pound) and billed as smooth and full-bodied, with a winy, spicy flavor. Yet eight of nine Konas we tested are woody, bitter, sour and astringent.

· Coffee-shop brands may not shine. Whole-bean coffees from Gloria Jean's, Seattle's Best and Starbucks scored no better than "good" in our ratings. Starbucks' ground was the lowest rated of 25 caffeinated Colombian coffees.

Overall, we found a far lower percentage of very good or excellent brews than when we last rated coffees in 2000, even though we tried many of the same brands. The winners, however, made for an interesting mix.

There are only two excellent products in our lineup was Caribou Colombian, a whole-bean caffeinated coffee sold in Caribou stores, by mail order or over the Internet for $11.25 a pound. (With mail-order coffees, you'll likely pay an extra $5 or more for ground shipping.) It is fragrant, with complex, well-balanced floral, fruity and earthy notes or various Willoughby’s coffees, which is a small roaster and have some of the finest coffees in The USA. www.willoughbyscoffee.com

For the best combination of taste and price, we recommend Eight O'Clock 100 percent Colombian whole-bean -- both caffeinated ($5 per pound) and decaffeinated ($5.85) -- and Dunkin' Donuts Original Blend 100 percent Arabica ground caffeinated ($7.66, sold at the company's outlets). All three are CR Best Buys.

Our tests revealed that coffees with the same brand name may not be equally good. For example, the whole-bean version of Dunkin' Donuts Original Blend 100 percent Arabica and the ground version of Eight O'Clock Colombian scored lower in our ratings than their very good brandmates. And Eight O'Clock's Royale Kona Delight is so musty that it barely tastes like coffee.
Some so-so coffees can be salvaged with milk and sugar. If you don't take yours black, consider Berkley & Jensen 100 percent Colombian Batch Roasted ($1.80 per pound, at BJ's) and Kirkland Signature 100 percent Colombian Supremo Bean ($1.76, at Costco), two good ground caffeinated brews. For an inexpensive-but-good decaffeinated coffee, try Great Value 100 Colombian ground ($2.44 per pound, at Wal-Mart).

Dunkin Donuts vs Starbucks

This is a great article from AP

Dunkin' Donuts is changing, but Starbucks isn't target
Published in the Asbury Park Press 1/14/05 THE ASSOCIATED PRESS

BOSTON -- With the addition of more espresso drinks to its menu, Dunkin' Donuts might look as if it's trying to be another Starbucks Corp.
Well, it's true that Dunkin' Donuts is experimenting with WiFi access in a few Chicago shops and considering music in more of its stores -- two features of Starbucks outlets. But although its espresso launch has boosted its competitive position against Starbucks, Dunkin' Donuts says it is content to maintain its distance from the upscale Seattle coffee giant and stick to its workaday, on-the-go niche.
There's no broad campaign encouraging customers to linger awhile at Dunkin' Donuts' pink and orange-themed shops -- and there are no plans to switch from Dunkin Donuts' "small-medium-large" cup size hierarchy to something akin to Starbucks' oft-mocked sizes of tall, grande and venti.
"People say you're taking on Starbucks, but we're really not," CEO Jon Luther told The Associated Press in a recent interview. "All we want to do is share some space with the coffee consumer."
What the franchise chain is planning is to share that space by expanding westward -- only 70 of its stores are currently located west of the Mississippi River. The company, a subsidiary of the British wine and spirits firm Allied Domecq, has its heaviest concentration of locations in New England, where there are 1,700.
And it's changing its menu again, planning to add iced beverages to its year-old line of espresso drinks, and broadening its small line of sandwiches with a new sirloin steak, scrambled eggs and cheese on a bagel. The sandwich, to be offered through May at selected outlets, is an upscale version of the breakfast sandwich Dunkin' Donuts now offers with a choice of bacon, ham or sausage.
The move comes as both Dunkin' Donuts and Starbucks put greater emphasis on sandwiches to draw more afternoon customers and respond to moves by fast-food giants such as McDonald's Corp. that now sell more premium coffees.
Dunkin' Donuts customers interviewed outside a downtown Boston shop across the street from a Starbucks said they welcomed some of Dunkin' Donuts' recent changes -- as long as the chain doesn't abandon the basics.
"It's quite a bit cheaper than Starbucks, and it's convenient, and they're fast," said Sandra Jadotte, a 30-year-old downtown officer worker and three-times-a-week consumer of Dunkin' Donuts' no-frills coffee.
Brian Lam, 25, said he chooses Starbucks when he wants a strong blend of top-notch coffee, but opts for Dunkin' Donuts when he craves French Vanilla flavoring.
"I'm here for the caffeine strictly," Lam said.
While Dunkin's doughnuts cemented the company's name and reputation, they made up less than 15 percent of the chain's total $3.6 billion in fiscal 2004 sales. Espresso beverages accounted for 10 percent, nearly twice what the chain expected when the high-end drinks were introduced early last year, Luther said.
Clearly, Starbucks and its huge sales of espresso are on the minds of Dunkin' Donuts executives. In a recent press release, Dunkin' Donuts said its new lattes and cappuccinos "helped the brand solidify its position as a viable competitor to premium coffee chains like Starbucks."
And next summer, Dunkin' Donuts will introduce the Turbo Ice: iced coffee with a shot of espresso.
Starbucks doesn't appear to be worried: "Starbucks believes there is room for many coffeehouses in the marketplace that can meet different customer needs," spokeswoman Valerie Hwang said.
And an industry analyst said it would be a stretch to suggest Dunkin' Donuts will pose a big challenge to Starbucks.
"Starbucks has spent more time working on the coffee shop experience, and when you compare that to Dunkin' Donuts, they don't even seem to be in the same game together," said Carl Sibilski of Morningstar Inc. "The real product Starbucks is offering is more than just the coffee in a cup. The real product is the environment, and Dunkin' Donuts is lacking that environment."
Sticking with formulaDunkin' Donuts' plan is to keep doing what it does now, but in more locations. Canton-based Dunkin' Donuts remains close to its Massachusetts roots, with the vast majority of its 4,400 domestic locations in the Northeast and Mid-Atlantic states.
The company is accelerating its expansion pace by adding about 500 shops a year, with an eventual goal of growing to 15,000 shops -- a huge total, but still dwarfed by the 30,000 locations Starbucks envisioned when it announced in October it was increasing its previous long-term growth target.
Starbucks, which had $5.29 billion in 2004 sales, has 8,700 shops worldwide compared with Dunkin' Donuts' 6,100.
"I think the biggest challenge for Dunkin' Donuts is geography," said Sharon Zackfia, an analyst with William Blair & Co. in Chicago. "They are strong in New England, but they really haven't been strong anywhere else."
Starbucks typically selects prime real estate for its shop locations, which could hinder Dunkin' Donuts to compete in new markets from its more typical second-tier properties, Zackfia said.
Not threat to Starbucks
"I think Dunkin' Donuts can grow very profitably, but I don't think they will do that necessarily at the expense of Starbucks," she said.
The chain expects much of its near-term growth in the upper Midwest, with eventual plans to reach the West Coast. The chain is now moving into Cleveland; Cincinnati; Charlotte, N.C.; and Tampa, Fla.
"We feel there is ample room for us to expand," CEO Luther said.
© copyright 2005 The Associated Press

The Story on Coffee

Coffee Genesis: Birth of the brew

The Legend begins

The history of coffee began many years ago on the tip of the Arabian Peninsula. Once upon a time, there lived a goat herder named Kaldi, and with him lived his happy flock. One night the flock did not return home as usual, and Kaldi was forced to search for them all night long. When at last he found them the next morning, the goats were dancing and jumping about a shrub like tree covered with red berries. Curious about the mysterious behavior of his flock, Kaldi himself tried the berries, and proceeded to dance and sing with his goats.

The first known coffee consumers were actually a group of monks. Having heard of Kaldi and his fantastic fruit, these monks began consuming the fruits for their incredible energizing properties. The monks would dry out the fruit to preserve it for their travels between monasteries, and then reconstitute them using water. Thus the first coffee beverages in history were prepared.

History and the Spread of Coffee

These first coffee discoveries were reportedly made in the mountains of Ethiopia. Some time in the 7th century coffee made its way from these Ethiopian slopes to the kingdom of Yemen, on the southern tip of the Arabian Peninsula. The Arabs consumed the coffee cherries as fruit, and also made a wine from the pulp of the ripe berries. From here, coffee was taken to Turkey where it was roasted for the first time.

Venetian trade merchants began exporting coffee to Europe in the early 17th century, and soon the Dutch had begun their own coffee production on the Indonesian Island of Java. When coffee from Java was combined with coffee exported from the well-traveled port of Mocha, in Yemen, the first blend was born: Mocha Java.

In 1715, Louis XIV received several coffee trees from the Dutch as repayment for a favor. In 1720 an infantry captain, Gabriel Matthieu de Clieu, transported a single tree from its greenhouse in France to Martinique with a mission to build coffee production. Fifty years later, 19 million coffee trees were growing in Martinique alone. From there the coffee tree spread throughout the Caribbean, South and Central America. The coffee craze had begun!

By 1763, there were over 200 coffee bars in Venice alone. There are tens of thousands of coffee bars in Italy today. Coffee, as a commodity, is second only to petroleum in terms of dollars traded. The coffee industry employs approximately 20 million people globally to produce what will become 400 billion cups consumed per year. In the United States, coffee is a billion-dollar industry. Today American customers can drink the highest quality coffees available from the coffee-producing world.

What is coffee and where does it come from?

· Coffee beans are the pits of cherries. They grow on evergreen shrubs known as coffee trees. They grow at altitudes from sea level to 7000 feet. The best generally grow over 3000 feet.

· Coffee trees grow in the narrow subtropical belt north and south of the Equator, between the Tropics of Capricorn and Cancer. This belt encompasses all of Central America and major portions of Africa, South America and Indonesia as well as numerous smaller land masses.

· We refer to individual coffees as unblended coffees, and combinations of these as blends.

· An individual coffee’s flavor depends on a tropical micro-climate which includes soil conditions, weather, altitude, and other environmental factors. Other conditions such as variety planted, the farmer’s care in cultivating the crop, method of processing, and numerous other factors contribute greatly to the coffee’s final quality.

· The annual growing cycle begins with flowering followed by cherry growth and ripening. The flowers resemble Jasmine in shape and odor and last but a few days. The overall cycle spans approximately nine months.

· Coffee cherries ripen at different rates. Pickers must revisit the same trees over and over picking the fruits by hand as they ripen!

Some Great Links

Greatest Coffee Roasters www.willoughbyscoffee.com

Bakery Information www.bakery-net.com

Great Graphic designer http://www.eharidesign.com/

Capico International Logo
visit our web site http://www.capico.net

List of clients we have worked with:

La Petite Boulangerie
Vie DeFrance
Nutri/Systems
My Favorite Muffin
Starwood (Middle East, Africa, India)
Le Maison du Cafe
Najaar Cafe
House Of Coffee
New World Coffee
Au Bon Pain
il Forniao
Dunkin Donuts (Middle East)
Puratos
La Croissant Shop
Cookies Nest (Israel)
Cookie Connexion (Paris)
Tribeca (Turkey)
Tribeca (Lebanon)
Tribeca (Tokyo)
Manhattan Bagel
Zanadoo & Co
Bow Wow Botanicals NEW!!