The terminology "company store" and "franchise" itself partakes somewhat of KKD's effort to spin itself as a retailer when it is mostly a wholesaler. The phrase "company store sales" leaves the impression that we're talking about sales that come out of the stores.
In fact, the cake doughnuts for the entire east coast are manufactured at a single plant in North Carolina. They seem to be delivered to the supermarkets in separate trucks from the yeast doughnuts -- my local market gets yeast doughnuts twice a week and cake doughnuts once a week. Presumably (although I've never seen KKD explain how it handles this), the cake doughnuts sold in franchise territories are accounted for as "company store" sales.
This must be a major factor in why the "company store" sales have a higher wholesale component, and therefore a higher COGS, than the franchise sales.
I can think of one trend that could conceivably cause the "company store" labor & miscellaneous expense to decline while revenues increase. If in-store retail revenues were declining fairly rapidly, while wholesale revenues were increasing even faster, you would see labor costs decline while revenues increase. However, I find it hard to imagine that such a phenomenon would have a large enough magnitude to explain the numbers that di_vur calculates. The declining company-store expenses are a big mystery to me, and one that certainly raises questions about KKD's accounting practices.
"Accounting is not that difficult. If grey areas exist in a company's books, honest
companies are straight forward about it...dishonest ones use it to their advantage."
Then, do you consider Yoohoo "dishonest"?