Day 248 - 13 May 96 - Page 46


     
     1        in the UK, the figures, do you remember we looked at the
     2        figures the other day and we were asking you about the
     3        charitable stuff and you said that would be -- that was
     4        included and then the local store marketing would be on top
     5        of that; do you remember that?
     6        A.  Well, I remember talking about advertising expenditure,
     7        percentage of sales, an amount of money like £47 million
     8        with local store promotion becoming £52-53 million, yes.
     9
    10   Q.   Yes, that was what I was talking about.  Did that figure of
    11        £52/£53 million include expenditure on ronald mcdonald
    12        appearances, or is that separate?
    13        A.  Normally Ronald appearances, to my recollection, are
    14        paid for by the individual restaurant receiving them; that
    15        would go in their local store marketing expense area.
    16
    17   Q.   OK.
    18        A.  So it is in there.
    19
    20   Q.   That is probably in the five million?
    21        A.  It is in that five, yes.
    22
    23   Q.   OK.  That would include all appearances, not just the ones
    24        in store but ones at events, at schools, at all the places
    25        where ronald mcdonald appears?
    26        A.  I am struggling to give you a straight and clear answer
    27        because we have operated several systems over the years.
    28        There was a point in time when the Company was only company
    29        owned restaurants.  At that point in time all charitable
    30        expenses were run through our Head Office moneys.  They
    31        were not in the advertising account.  As we became
    32        franchised and the numbers of franchisees grew, they began
    33        to participate in the spending of moneys on these events.
    34        Hence, at that time, it became something we took from the
    35        advertising moneys.  They all contributed.  Every
    36        restaurant contributed to the total.  So it has been a
    37        movable thing over years as the system altered and changed.
    38
    39   Q.   But in terms of ronald mcdonald appearances, not charitable
    40        things, but things like going to schools, the parties in
    41        the restaurants, going to fetes and things like that, prior
    42        to the franchising that would have been part of the
    43        advertising as well?
    44        A.  Some would have been.  Some would have been an
    45        individual store's expense.  If we used Ronald at some
    46        corporate function that would have been a Head Office
    47        expense and not in there at all.  In the total of things it
    48        would have been very tiny.  But everything would not have
    49        been in that one account, no.
    50 
    51   Q.   Right.  When did the Company first have franchised stores? 
    52        A.  Here, in the UK or in the world? 
    53
    54   Q.   In the UK.
    55        A.  1986, I think.
    56
    57   Q.   Right.
    58        A.  1986.
    59
    60   Q.   OK.  ronald mcdonald is an important part of your brand

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