ST. PAUL, Minn. (AP) -- An enterprising Minnesota college student who drove to Iowa every weekend to buy hundreds of Krispy Kreme doughnuts that he then sold to his own customers in the Twin Cities area has been warned by the confectionary giant to stop.
There have been no Krispy Kreme stores in Minnesota for 11 years.
Jayson Gonzalez, 21, of Champlin, Minnesota, would drive 270 miles (430 kilometers) to a Krispy Kreme store in Clive, Iowa, pack his car with up to 100 boxes, each carrying 12 doughnuts, then drive back up north to deliver them to customers in Minneapolis-St. Paul.
He charged $17 to $20 per box. He said some of his customers spent nearly $100 each time. Gonzalez said he did not receive a discount from the store in Iowa where he bought the doughnuts.
But less than a week after the St. Paul Pioneer Press reported on his money-making scheme, Gonzalez received a phone call from Krispy Kreme's Nebraska office telling him to stop. The senior studying accounting at Metropolitan State University in St. Paul said he was told his sales created a liability for the North Carolina-based company.
In a statement Sunday night, Krispy Kreme said it's looking into the matter.
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Krispy Kreme doughnuts go into production at the opening of the store at Harrods in London, October, 3, 2003. [The U.S. chain opened its first European outlet in London on Friday.]
Krispy Kreme doughnuts go into production at the opening of the store at
Harrods in London, October, 3, 2003. The U.S. chain opened its first
European outlet in London on Friday. REUTERS/ David Bebber
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Employees tend to the assembly line as doughnuts are baked, fried, and glazed at a Krispy Kreme Doughnuts Inc. store in Farragut, Tennessee, U.S., on Wednesday, Dec. 5, 2013. The doughnut chain plans to add at least 30 new U.S. stores next year and is opening up new markets for franchising. Photographer: Luke Sharrett/Bloomberg via Getty Images
An employee picks up fresh donuts from a conveyor belt at a Krispy Kreme Doughnuts Inc. store in Farragut, Tennessee, U.S., on Wednesday, Dec. 5, 2013. The doughnut chain plans to add at least 30 new U.S. stores next year and is opening up new markets for franchising. Photographer: Luke Sharrett/Bloomberg via Getty Images
Doughnuts are displayed in a case at a Krispy Kreme Doughnuts Inc. store in Farragut, Tennessee, U.S., on Wednesday, Dec. 5, 2013. The doughnut chain plans to add at least 30 new U.S. stores next year and is opening up new markets for franchising. Photographer: Luke Sharrett/Bloomberg via Getty Images
Customers wait inside a Krispy Kreme Doughnuts store to collect on the promotion of a free doughnut to anyone with an "I Voted" sticker on election day in Washington, November 4, 2008. REUTERS/Mitch Dumke (UNITED STATES) US PRESIDENTIAL ELECTION CAMPAIGN 2008 (USA) REUTERS
MIAMI - MAY 17: Glazed Krispy Kreme doughnuts are seen May 17, 2004 in Miami, Florida. Krispy Kreme Doughnuts Inc. last week said that the low-carb diet trend has hurt sales and they now face shareholder lawsuits alleging it misled investors about the direction its business was headed. (Photo by Joe Raedle/Getty Images)
UNITED STATES - MAY 25: Customer Anthoney Golladay and his newly purchased Doughnuts at a Krispy Kreme Doughnut shop in Alexandria, Virginia, May 25, 2004. Krispy Kreme Doughnuts Inc. had its first loss as a public company after closing its Montana Mills business and doughnut-chain sales declined amid the popularity of low-carbohydrate diets. (Photo by Dennis Brack/Bloomberg via Getty Images)
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"We appreciate Jayson's passion for Krispy Kreme and his entrepreneurial spirit as he pursues his education," the statement read.
Gonzalez, also known as "The Donut Guy," would have made his 20th run to Iowa on Saturday. He told his Facebook followers on Thursday that he has been told he has to shut down operations.
"Life happens, and it could be a sign that something else it meant to be," Gonzalez posted.
Steve Easterbrook, president and chief executive officer of McDonald's Corp., walks the grounds after a morning session during the Allen & Co. Media and Technology conference in Sun Valley, Idaho, U.S., on Wednesday, July 12, 2017.
The stock, which has a market value of $149 billion, opened down 1.9% Monday. It had slid as much as 3.1% in the premarket. Shares of rival Wendy's, valued at $4.8 billion, were up 2.2%.
After taking the helm of McDonald's in 2015, Easterbrook led a turnaround of the company, leading the value of its stock to nearly double. His successor Chris Kempczinski, in his prior role as head of McDonald's U.S. business, worked closely with Easterbrook in efforts to turn around U.S. restaurants.
"Given Kempczinski's role as President of McDonald's USA, he was the obvious eventual successor to Easterbrook, but the timing is clearly much sooner than anticipated," Bernstein analyst Sara Senatore wrote in a note.
Under Easterbrook, McDonald's increasingly turned its attention to technology. U.S. locations have been receiving tech-focused upgrades, like self-order kiosks and digital menu boards. It is trying to hit $4 billion in delivery sales by the end of 2019. The company also acquired two companies this year that are trying to use artificial intelligence in drive-thrus.
But pricey store renovations, delivery commission fees and value deals led to a fraying relationship between McDonald's management and its U.S. franchisees, who formed an independent group a year ago to address their concerns. As a result of concessions made by McDonald's, relations have improved in recent months.
"This balance of relations with franchisees and shareholders, that can sometimes have differing objectives, will be paramount as Mr. Kempczinski begins his new role," Cowen analyst Andrew Charles wrote in a note.
While Kempczinski does not have any international experience at the global fast-food chain, he was president of Kraft International before coming to McDonald's.
"We are definitely surprised by the news and view Mr. Easterbrook's departure as a loss but also believe the company's strategy is on very solid footing and the McDonald's system is much more than just one man," BTIG analyst Peter Saleh wrote in a note.
Joe Erlinger, who will take over as president of McDonald's USA, is currently president of its international operated markets, which includes countries like Australia and the United Kingdom. Before taking over that role in January, he was president of high growth markets.
Piper Jaffray analyst Nicole Miller Regan downgraded McDonald's stock following the announcement.
"Our experience leads us to take a more cautionary view noting the potential lack of momentum and time involved in formalizing a new team," she said.
Easterbrook's firing follows two other recent executive departures. McDonald's global Chief Marketing Officer Silvia Lagnado and Chief Communications Officer Robert Gibbs left last month.
McDonald’s fired its CEO over an inappropriate relationship with an employee. Belpointe chief strategist David Nelson with more.
McDonald’sshares were sliding Monday morning after the company on Sunday parted ways with CEO Steve Easterbrook over an inappropriate relationship with an employee.
The fast-food chain said Easterbrook “violated company policy and demonstrated poor judgement involving a recent consensual relationship with an employee.”
Chris Kempczinski, president of McDonald’s USA, was named CEO and president. He was also elected to McDonald’s board of directors.
Easterbrook became McDonald’s CEO in March 2015 after the company posted one of its worst financial quarters in years. He was instrumental in the company’s turnaround, emphasizing a technological shift that included third-party delivery through apps and the installation of kiosks that let customers customize their orders.
“While fundamentals are solid (nowhere more apparent than last week's earnings results), changes of this magnitude tend to be disruptive,” Minneapolis-based Piper Jaffray analysts wrote in a note to clients on Monday morning. They downgraded shares to neutral and cut their price target from $224 to $195 – less than 1 percent above where shares settled on Friday.
The analysts say the risks associated with the transition are “potentially short-lived” as Kempczinski was “instrumental in orchestrating current (and well performing) strategies as well as having global CPG experience.”
On Oct. 22, McDonald’s reported quarterly results that fell short of Wall Street estimates for the first time in two years. The company earned a profit of $1.6 billion, or $2.11 a share, flat from the year prior. Same-store sales rose 4.8 percent year-over-year, missing the 5.2 percent that was expected.
Legitimate reforms benefiting women mask a broader crackdown on freedom and dissent in Saudi Arabia, the international monitor Human Rights Watch said Monday.
But behind the scenes, Saudi authorities have harshly oppressed perceived opponents of the prince, 34, targeting prominent clerics, academics, women's and human rights activists, leading businessmen and even other members of the royal family, the watchdog, Human Rights Watch, said in a 62-page report.
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"Allegations have emerged of rampant torture and mistreatment," the report said.
The abuses didn't come to widespread attention until Jamal Khashoggi, a Saudi journalist and columnist for The Washington Post, was brutally killed at the Saudi consulate in Istanbul, Turkey, in October 2018, the group said.
NBC News reported in January that former U.S. officials and diplomats were deeply troubled by the United States' reluctance to confront Saudi Arabia over its continuing human rights abuses. They said the U.S. failure to confront the kingdom was a repudiation of decades of U.S. policy that would serve as a tacit green light signaling the Trump administration's approval.
Michael Page, deputy Middle East director for Human Rights Watch, acknowledged Monday that the prince had "created an entertainment sector and allowed women to travel and drive."
But "it's not real reform in Saudi Arabia if it takes place in a dystopia where rights activists are imprisoned and freedom of expression exists just for those who publicly malign them," he said.
Following approval from the country's regulators, Saudi Aramco on Sunday formally announced its intention to float shares on the Tadawul exchange in Riyadh. Aramco executives will now embark on an international roadshow to court investors, and a prospectus outlining the company's financial details is expected later this month.
"(The IPO) will increase our international visibility as the leading company in the world," CEO Amin Nasser said at a press conference. He declined to comment on the company's valuation, which executivessaid would be determined following consultation with potential investors.
Aramco has vast oil reserves and massive daily output. It holds a monopoly in Saudi Arabia, the world's largest exporter of crude oil.
The public offering is part of Saudi Crown Prince Mohammed bin Salman's plan to wean his country off oil and develop other areas of the economy. But getting the massive IPO off the ground has been an arduous process full of false starts.
The Saudi government initially discussed floating 5% of the company in 2018 in a deal that would raise as much as $100 billion. It was looking at international markets such as New York or London, as well as Riyadh.
But the project was shelved amid concerns about legal complications in the United States, as well as doubts about the $2 trillion valuation sought by bin Salman — only to be revived earlier this year after Aramco pulled off a successful international bond sale.
Estimates of how much the flotation will raise vary widely. Bin Salman has reportedly pushed to value Aramco at close to $2 trillion; analysts peg it no higher than $1.5 trillion. Selling even 1% of the company at the bottom of that range would fetch $15 billion, while selling 2% at the top could generate $40 billion, eclipsing the record $25 billion IPO by Alibaba(BABA) in 2014.
Uncertainty will still hang over the IPO process in the coming weeks. Questions remain about international appetite for Aramco shares, and the company is sensitive to the geopolitical environment.It had to delay the IPO process following attacks on Saudi oil facilities in September.
But executives made clear on Sunday that they intend to move forward.
"The question could be, 'Why not now?'" chairman Yasir Al-Rumayyan told reporters at the press conference."I think this is the right time for us — coming to a juncture where we want to take Aramco to be a public company, to have more disclosure."
The announcement begins a sprint for Aramco's bankers, pulled from top firms such as Goldman Sachs(GS), Morgan Stanley(MS), Citi(C), JPMorgan Chase(JPM) and HSBC(HSBC).Shares could start trading in early December, according to recent media reports.
The Capital Market Authority of Saudi Arabia said in a statement Sunday that it has approved an application to list shares in Saudi Aramco. It did not say when the highly-anticipated IPO would take place or give details on its size.
Aramco has vast oil reserves and massive daily output. It holds a monopoly in Saudi Arabia, the world's largest exporter of crude oil.
The public offering is part of Saudi Crown Prince Mohammed bin Salman's plan to wean his country off oil and develop other areas of the economy. But getting the massive IPO off the ground has been an arduous process full of false starts.
The Saudi government initially discussed floating 5% of the company in 2018 in a deal that would raise as much as $100 billion. It was looking at international markets such as New York or London, as well as Riyadh.
But the project was shelved amid concerns about legal complications in the United States, as well as doubts about the $2 trillion valuation sought by bin Salman — only to be revived earlier this year after Aramco pulled off a highly successful international bond sale.
Estimates of how much the flotation will raise vary widely. Bin Salman reportedly wants the deal to value Aramco at $2 trillion; analysts peg it no higher than $1.5 trillion. Selling even 1% of the company at the bottom of that range would fetch $15 billion, while selling 2% at the top could generate $40 billion, eclipsing the record $25 billion IPO by Alibaba(BABA) in 2014.
