Principal Accountant Fees and Services. Krispy Kreme Baked Creations, a baked platform for international markets designed to meet needs across a broad set of markets, was launched in fiscal 2010 in the Philippines. No liabilities for the guarantees were recorded at the time they were issued because the Company believed the value of the guarantees was immaterial. Krispy Kreme doughnuts are a popular choice for sharing with friends, family, co-workers and fellow students. Competition Our competitors include retailers of doughnuts and snacks sold through supermarkets, convenience stores, restaurants and retail stores. We continue testing the satellite store concept, which consists of the doughnut and coffee shop, the fresh shop and the kiosk formats.
If our security and information systems are compromised or our business associates fail to comply with these laws and regulations and this information is obtained by unauthorized person or used inappropriately, it could adversely affect our reputation, as well as our operations, their results, and our financial condition. Our recent store development efforts have focused on opening Company and franchise factory stores in markets with over 100,000 households. We had a minority equity interest in 12 of these area developers. Proofing, cooking, glazing, screen loading and cutting became entirely automatic. In addition, the start-up costs associated with retail doughnut and similar food service establishments are not a significant impediment to entry into the retail doughnut business. Our failure or inability to enforce our trademarks could adversely affect the value of our brands. No demand has been made on the Company to perform under any of the guarantees.
In the 1950s and 1960s, steps were taken to mechanize the doughnut-making process. Company OverviewKrispy Kreme is a leading branded retailer and wholesaler of high-quality doughnuts, complementary beverages and treats and packaged sweets. Our new domestic store operating model may not be successful. We did not collect all of our receivables from Lone Star at the date of termination, but previously had established reserves for doubtful accounts related to these receivables. We offer a comprehensive 14-week training program, conducted both at our headquarters and at certified training stores, which provides store managers the critical skills required to operate a Krispy Kreme store.
Eastern and Central Canada : On April 15, 2005, an application was filed under the Companies Creditors Arrangement Act with the Ontario Superior Court of Justice for a restructuring of a consolidated franchisee, KremeKo, Inc. Our store operators support their local communities through fundraising programs and the sponsorship of charitable events. Strickland, who had served as a director of the Company since 1998, was appointed Vice Chairman of the Board of the Company. Nevertheless, we believe the Krispy Kreme brand should be represented in wholesale distribution channels. Manufacturing our equipment results in several advantages, including: - Flexibility. We also provide an opening team to provide on-site training and assistance both for the week prior to and during the first week of operation for each initial store opened by a new franchisee. The major initiatives to which we are devoting our efforts are discussed below.
As discussed elsewhere herein, several of our current and former directors, officers and employees are the subject of criminal, administrative and civil investigations and lawsuits. In addition, class action lawsuits have been filed and may continue to be filed against various food service businesses including quick service restaurants alleging, among other things, that food service businesses have failed to disclose the health risks associated with high-fat foods and that certain food service business marketing practices have encouraged obesity. Such uncertainty arose principally from the substantial losses incurred by the Company from fiscal 2005 though fiscal 2009. Any amendment to or waiver of a provision of these codes of ethics that applies to any director or executive officer will also be disclosed on our website. The majority of our factory stores have on-premises sales, and approximately 190 stores also engage in off-premises sales. And to better engage our customers and encourage their loyalty and visit frequency, we have also made concerted efforts to deepen our social media presence, expand our local relationship marketing efforts, and enhance the in-store experience through our shop atmosphere and team member hospitality.
While management believes its forecast of future taxable income is reasonable, actual results inevitably will vary from managements forecasts. International franchisees opened 76 stores and closed 33 stores in fiscal 2012. For example, the ingredient list, product weight and other aspects of our product labels are subject to state and federal regulation for accuracy and content. Our franchisees are required to provide us with weekly sales reports. K Asia LitigationOn April 7, 2009, a Cayman Islands corporation, K2 Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. In the last three fiscal years, management focused on reducing or eliminating the Companys investments in franchisees and the related guarantees of franchisees obligations, reducing outstanding debt, and on restructuring the Companys borrowing arrangements to maintain credit availability and lower financing costs to facilitate accomplishing the Companys business restructuring and expansion initiatives.
If these expenditures continue and we cannot generate the required cash, we may not be able to continue to obtain necessary services from our professional advisors and our ability to fund our operations may be significantly impaired. The doughnut industry is highly fragmented and characterized by low-volume outlets with undifferentiated product quality. We caution you that any forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from the facts, results, performance or achievements we have anticipated in such forward-looking statements except as required by the federal securities laws. Because one of our competitive strengths is the taste and quality of our doughnuts, adverse publicity or regulations relating to food quality or other similar concerns affect us more than it would food service businesses that compete primarily on other factors. Although we take reasonable steps to safeguard our trade secrets, should they become known to competitors, our competitive position could suffer substantially. Our goal is to drive same store sales and operate our shops more efficiently through a focus on operating excellence and world class guest experience.
The other free-standing shop was a first-generation site on which the landlord constructed and upfit a building and then leased the land and building to the Company. In fiscal 2005 and 2006, there have been fewer such product placements, references and favorable media mentions. Subsequent to February 3, 2006, Glazed Investments closed three stores, and the 12 remaining stores operated by Glazed Investments were purchased by one of Krispy Kremes area developers, which continues to operate 11 of such stores. This is useful in estimating the financial strength and credit risk of the company. Such uncertainty arose principally from the substantial losses incurred by the Company from fiscal 2005 though fiscal 2009. Some associates also contribute 1. In the years following our initial public offering, there were numerous product placements and references to our products on leading television programs and films and favorable media mentions in print publications.
As of February 3, 2013, there were 239 Krispy Kreme stores operated domestically in 38 states and in the District of Columbia, and there were 509 shops in 21 other countries around the world. Our business, operations and financial condition are subject to various risks. Many of our loyal customers have warm memories of selling Krispy Kreme doughnuts to raise money for their schools, clubs and community organizations. Our doughnut shops are operated under the Krispy Kreme name, and we use over 40 federally registered trademarks and service marks, including Krispy Kreme and Hot Doughnuts Now and the logos associated with these marks. Currency RiskThe substantial majority of the Companys revenue, expense and capital purchasing activities are transacted in U.
At the retail level, we compete with other doughnut retailers and bakeries, specialty coffee retailers, bagel shops, fast-food restaurants, delicatessens, take-out food service companies, convenience stores and supermarkets. Our short-term menu plans will focus on maximizing doughnut sales with existing and new doughnut varieties across more dayparts and use occasions. Due to their lower cost, these small format factory shops could enable us to deliver the Krispy Kreme Doughnut Theater experience to consumers in relatively smaller geographic markets than we currently serve because the small shops typically have lower breakeven points than our large traditional shops. Each of our distinctive Krispy Kreme traditional factory stores is a doughnut-making theater with the capacity, depending on equipment size, to produce from 4,000 dozen to over 10,000 dozen doughnuts daily. These settlements are still subject to the approval of the relevant courts and no assurance can be given that these settlements will be approved. Each of these formats requires less space than our traditional factory store.