California Pizza Kitchen
California French fries Kitchen is definitely an upscale pizza parlor based out of Washington dc. It was founded in 1985 by protection attorneys Larry Flax and Rick Rosenfield in Beverly Hills, California. The company provides 213 shops with approximately 41% from the stores positioned in California, six in overseas counties and the rest spread throughout twenty-seven other states in the U. S. It derives its profits from 3 different sources: sales in company held restaurants, royalties from franchised restaurants, and royalties from the partnership with Kraft Foods in which they sell frozen pizza in food markets under the A bunch of states Pizza kitchen name. CPK also has created a quick " grab and goвЂќ restaurant called AS SOON AS POSSIBLE which are located mainly in airports and malls. Nevertheless , they have halted expansion on this in order to give attention to international development of its main restaurant. With all the recent 10% share selling price decline, CPK management considers if it will be an ideal time to repurchase stocks and potentially leverage you can actually balance sheet having its existing line of credit. In order to carry on and fund strong expansion, it really is considering repurchasing shares and can need to employ debt funding to pursue this. Seeing that going general public the company has avoided applying debt to finance development operations.
1 ) To improve you can actually performance they would need to restructure their capital policy and make use of the available leverage. By making use of debt, they will repurchase their stock and continue to increase at a stable pace. It would also reduce the tax liability and enhance ROE. Another way to improve CPK is to increase spending on marketing to expand brand recognition. Currently only 1% is usually spent on advertising compared to additional similar eating places which dedicate 3% to 4%. 2 . CPK at present has no debt on their "balance sheet". Not only should they use financial debt leverage, they need an maximum amount which will increase their financial capabilities but not...