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Super Premium Ice Cream in the ‘Hood

Ice cream shops have traditionally served two types of frozen treats.  Either the ice cream is hard-packed and served in a stack of scooped balls atop a cone, or else it comes in soft-serve form that gets “poured” into a cone.  The founders of Cold Stone Creamery were anxious to find a delicious middle ground and created a smooth-and-creamy concoction with an added twist – a wide variety of fruit, nuts, candy, or similar items hand-mixed into every order.  The company takes its name from the granite countertop upon which the server “massages” your choice of ice cream flavor until it is malleable, and then folds in your selected items before handing it to you in a crispy, just-baked waffle cone.  This process provides a customized serving of high-quality ice cream, created before your very eyes by a well-trained “mixer.”  The company got its start in 1988 in Tucson, which is where the first franchise location opened as well, in 1995.  A short while later, Camarillo, California, became the site of the first out-of-state Cold Stone Creamery store.

Cold Stone Creamery Franchise Review

At the end of 2008, Cold Stone Creamery had just fewer than 1,400 U.S. franchises.  Another 110-plus stores can be found overseas, situated in the Far East (Japan, China, South Korea, Taiwan), Western Europe (primarily Scandinavia), the Middle East (Kuwait, Jordan, Qatar, U.A.E.), and Mexico.  The company is aggressively seeking international master franchisees – partners that would be granted the exclusive right to operate in a particular country – in places like Australia, Brazil, Canada, Germany and the U.K.  As of December 2007, the average U.S. location reportedly earned more than $375,000 a year although, as they say in the stock market business, “past earnings are no indication of future prospects.”  The parent company encourages prospective owners to speak freely with as many franchisees as possible, which should provide a clearer picture of financial potential as well as what it’s like to run an operation like this.  These stores can be a bit labor-intensive, as the recommended number of employees is 15 per location.

Cold Stone Creamery Franchise Information & Costs

The franchise fee required to become a Cold Stone Creamery owner is $42,000, about average for an enterprise of this type.  The estimated total investment will range from slightly less than $300,000 to around $440,000.  The parent company requires all of its franchisees to be owner/operators; in other words, no absentee ownership is allowed.  More than half of the company’s franchisees operate more than one location.  A prospective owner must have $125,000 in liquid assets in order to qualify.  Third party financing is available to fund nearly every aspect of one’s business – except for the franchise fee, that is – and taking out an SBA (Small Business Administration) loan is probably the most common vehicle for this path to ownership.  The corporation assesses a six percent annual royalty fee on gross sales, and every franchisee is asked to renew his or her agreement every ten years.  Training for franchisees is extensive.  The home office hosts an eleven-day session, after which new owners proceed to a store already up and running for three days of on-the-job experience.

Top Marks and a Big Message

The two primary drawing cards for Cold Stone Creamery devotees are the high-quality, super-premium ice cream – made fresh in each store every day – and the show put on by the employees as they mix in ingredients as exotic or as mundane as you like, everything from pecan, walnuts and almonds to Gummi Bears, brownie bits, or tiny chunks of chocolate chip cookie dough.  As has been proved in a number of studies, the ice cream business has year-round appeal.  Cold Stone Creamery has enjoyed a number of high-ranking accolades in recent years, including a position of 90 or better since 2005 as part of the Franchise 500 (grouped with all franchises, regardless of industry), as high as eleventh place in 2006 for fastest-growing franchise, and number one in its category in 2007.  The corporation spends lavishly on marketing and advertising, including two-for-one coupons placed in newspaper ads and as part of direct-mail campaigns.

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