[DesertCat]

[ QUOTE ]

$2 per square foot per month sounds way too high. I'm about to sign a lease for 2000 sq ft in a very good retail location (though admittedly it is in Greenville SC) for about half that.

Also, are KK locations really that big on average? I saw one in Florida that was about 4000 sq. ft, but the one I'm most familiar with (also in Florida) was maybe half that.

[/ QUOTE ]

Digging through the detail P&L again, I noticed they actually had a line for rent, $41,406. I was wrong that truck leases and rent weren't counted, but even so they still were showing heavy negative cash flow.

I don't know how big the 5.5 stores were (or if they owned some), but assuming 4k SF, that works out to 22k SF, or $2 per square foot. If the stores were smaller, the rent per SF is even higher.

How old was that store in FL? Former CEO Livengood made franchisees develop huge "factory stores", i.e. "donut theatres" where the family could watch donuts being made. They required 4,000 SF. I wouldn't be surprised if original KKD stores were smaller. Also as part of the turnaround effort, KKD is trying concepts called "satellite" stores that are much smaller and only have re-heating equipment. So far, some of these are just reconfigured factory stores of the same size, but it would be interesting if you saw a real live new small satellite concept in action.