How to Open a Cold Stone Creamery Franchise
Cold Stone Creamery, founded by Donald and Susan Sutherland in 1988, is known for its smooth and creamy ice cream rather than the usual hard packed or soft serve ice cream found in most stores. Ice cream is made fresh each day in the Cold Stone stores and then made to order by blending on a frozen granite stone.
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Instructions
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Be aware of how much money you will need to start a Cold Stone Creamery franchise. The total investment costs between $294,250 and $438,850, including an initial franchise fee of $42,000.
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Get a loan from the Small Business Administration (SBA) if you don't have access to the required amount of money. The SBA reports that out of the 499 loans for Cold Stone Creamery stores taken out through the SBA, only 1.6% have failed to pay back the loan. In addition, the SBA has not completely charged off anyone who has received such a loan.
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Receive eleven days of training from the company at the Cold Stone Creamery headquarters and three days training at your franchise location. You will receive ongoing support in the way of newsletters, meetings, a helpline to call and Internet assistance. They will teach you about purchasing co-ops, field operations and evaluations, security and safety procedures and the grand opening.
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Recognize that you will need to pay the Stone Cold Creamery company 6% of your royalties per year on top of the $42,000 yearly fee.
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Hire about 15 employees to help you run your franchise unit.
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Open your store in the beginning of summer if possible, when your sales volume will be at its best. Franchisees state that the positive publicity about Cold Store Creamery received from Entrepreneur Magazine and The Food Network, among others, has helped them with sales from their initial startup.
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Tips & Warnings
Entrepreneur magazine ranked Cold Stone Creamery as the #1 franchise to own in 2007. In the same magazine it was ranked #12 for the Fastest-Growing Franchise and #20 in the category of America's Top Global Franchise.
About half of all Stone Cold Creamery franchisees own more than one store.
Franchising started 1994.
With Stone Cold Creamery franchises, you must commit to being the operator of the store. Absentee ownership is not allowed.
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Comments
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CDR1605
Mar 18, 2008
In my opinion, from an investment standpoint, Cold Stone is a DISASTER!!! I am an Ex-Cold Stone Creamery franchisee. I am currently suing the company in federal court for among other things: (1) fraud in the inducement (i.e. for selling to potential franchisees based on statements such as profit by making people happy and Cold Stones franchise opportunities are about as solid as they come); and (2) Cold Stone effectively charges more than the 9% enumerated in their franchise agreement because they negotiate and receive kickbacks from the very vendors that they require franchisees to use. Those kickbacks drive up food cost for its franchisees and makes many of them unprofitable. This is apparent by the large number of stores that are closing down throughout the nation. -
CDR1605
Mar 18, 2008
On its website, Cold Stone Creamery boasts its average store generates $381,985 in annual sales. We had three stores and they were performing well above the national average. Two of our stores did $500,000 each in annual sales, which is more than $100,000 above the companys national average. We operated a store near a large college campus that was among the top Cold Stones in the entire nation. With $1.4 million in sales between the three storesCold Stone Creamery repeatedly recognized us as outstanding performers among stores throughout the nation and within our region. Even with such a large sales volume, we still could not earn a profit. This from a company that promised us 20% profits.
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CDR1605
Mar 18, 2008
Cold Stone has known for years that its franchisees have had serious profitability issues, yet they go out and negotiate deals that make their franchisees even more unprofitable. In my view, there is something inherently wrong with a company that negotiates deals with vendors that increase the cost to their franchisees. Those deals effectively pad the companys own profits at the expense of its franchisees who suffer life altering financial failures and many are filing bankruptcy at an alarming rate. In my opinion, that is completely contrary to their core value to supposedly do the right thing. Cold Stones lack of care and concern for their franchisees well being is inexplicably disingenuous in my view.
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CDR1605
Mar 18, 2008
Cold Stone has known for years that its franchisees have had serious profitability issues, yet they go out and negotiate deals that make their franchisees even more unprofitable. In my view, there is something inherently wrong with a company that negotiates deals with vendors that increase the cost to their franchisees. Those deals effectively pad the companys own profits at the expense of its franchisees who suffer life altering financial failures and many are filing bankruptcy at an alarming rate. In my opinion, that is completely contrary to their core value to supposedly do the right thing. Cold Stones lack of care and concern for their franchisees well being is inexplicably disingenuous in my view.
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CDR1605
Mar 18, 2008
There are Cold Stone Creamery franchisees who are pumping several thousands into their stores each month just to cover their losses. One franchisee told me, after investing $300,000 to open his store, he is losing $4,000 to $7,000 per month. A franchisee in Florida recently told me that he lost nearly $132,000 in just one store during 2007. Thats alarming.
