In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Cold Stone Creamery franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Cold Stone Creamery franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Cold Stone Creamery franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Cold Stone Creamery outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Cold Stone Creamery’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average gross sales for the top 20%, bottom 20%, and all 871 Cold Stone Creamery stores that share the following characteristics: (i) all are in a location in the United States (excluding Guam); (ii) all offer a full menu and use the same recipes; (iii) all were existing outlets that did not open for the first time during the past fiscal year; (iv) all operate under the same trademarks; and (v) all were franchised.
Section I – Background Information
15 Things You Need to Know About the Cold Stone Creamery Franchise
Welcomes 2020 with New Menu Items
1. At the beginning of January 2020, Cold Stone Creamery announced several new menu items to kick off the new decade. Its first new items for the year were Reese’s Peanut Butter ice cream cups, ice cream cookie sandwiches, ice cream cupcakes, and Cold Stone at Home quarts.
2. Then to celebrate Valentine’s Day, Cold Stone brought back fan-favorite Fudge Truffle ice cream. The Fudge Truffle ice cream was also featured in a Creation and cake. The Falling in Chocolate Creation features Fudge Truffle ice cream, fudge, brownie, and whipped topping. In addition, guests will have the option to bring their Creation even more love with a red waffle cone or bowl.
3. Rich and decadent, the Fudge Truffle Decadence cake features layers of moist red velvet cake, Sweet Cream ice cream with chocolate shavings, and Fudge Truffle ice cream with chocolate shavings, wrapped in rich fudge ganache. The new items were available until February 18.
4. Sara Schmillen, vice president of marketing for Kahala Brands, parent company of Cold Stone Creamery, said, “Our Fudge Truffle Ice Cream is one of our most frequently-requested seasonal flavors so it felt right to bring it back for Valentine’s Day. This sweet and scrumptious ice cream treat has a flavor profile that fans of chocolate will go crazy over!”
Launches Full Menu Online Ordering
5. In early March 2020, Cold Stone Creamery launched its new full menu online ordering experience. Guests can now skip the line and order any of their favorite Cold Stone Creations, ice cream cakes, ice cream novelties, shakes, and smoothies. Promotional Creations and limited-time items can also be ordered through Cold Stone’s website.
6. According to Sara Schmillen, vice president of marketing for Kahala Brands, parent company of Cold Stone Creamery, “Cold Stone Creamery is excited to be the first national ice cream chain to introduce full menu online ordering. The new full menu online ordering option is an easy way for our guests to order and enjoy super-premium Cold Stone Ice Cream in the comfort of their own homes!”
Introduces Give Back eGift Card Campaign to Support Communities in Crisis
7. At the end of April 2020, Cold Stone Creamery launched an exclusive Give Back eGift Card campaign that will support people and communities during this time of crisis. With every limited-edition Give Back eGift Card purchased online, Cold Stone will donate 10% of the amount to Bethenny Frankel’s initiative, bstrong.
8. bstrong’s COVID-19 response initiatives are centered around the shortage of medical and sanitization products in the marketplace. bstrong’s Global Empowerment Mission (GEM) is working directly with manufacturers to ensure the necessary Personal Protective Equipment (PPE) is sent to people and hospitals across the nation. They have committed to servicing up to 250 hospitals nationwide to get PPE to those in need.
9. “The entire Cold Stone Creamery team has been passionate about finding ways we can do our part to support communities that have been affected by COVID-19 as well as other crises,” said Sara Schmillen, vice president of marketing for Kahala Brands, parent company of Cold Stone Creamery. “We are proud to work with Bethenny Frankel’s bstrong disaster relief efforts to provide real time assistance to individuals and families in crisis.”
10. The offer was available online only from April 27 through May 31, 2020, while supplies lasted. Purchaser received the full value of the Give Back eGift Card. Proceeds were based on the purchase of the specific limited-edition Give Back eGift Card available via the Cold Stone Creamery website. Donation percentage was 10%, with a maximum donation of $100,000.
Company History
11. Cold Stone Creamery was founded in 1988 by Donald and Susan Sutherland in Tempe, Arizona. The Sutherlands wanted to offer an alternative to soft-serve and hard-packed ice creams. From the start, Cold Stone’s ice cream was premium, containing 14 percent milk fat or butterfat – 2 to 3 percent above the industry average.
12. In addition to offering premium ice cream, the Sutherlands decided to have mix-ins that could be folded into the ice cream on frozen granite slabs (hence the company’s name). The Cold Stone Creamery concept was a hit and the Sutherlands opened more stores in the Phoenix metro area.
13. In 1995, the Sutherlands started franchising the Cold Stone Creamery concept and opened the first franchised store in Tempe. Not long after, the first Cold Stone outside of Arizona opened in Camarillo, California. Over the next few years, Cold Stone Creamery continued to grow around the U.S. and by 2000, there were 100 stores in operation. Cold Stone’s expansion continued around the country as well as internationally over the next decade.
14. In 2007, Cold Stone Creamery merged with Kahala Corp. to form Kahala-Cold Stone, now called Kahala Brands, which also owns Baja Fresh, Blimpie, Planet Smoothie, Pinkberry, and several other brands. Today, Cold Stone Creamery has stores all across the U.S. as well as Japan, Taiwan, South Korea, the Philippines, Qatar, Egypt, Bahrain, Denmark, Singapore, Canada, and many more countries.
Entrepreneur’s Franchise 500
15. Cold Stone Creamery did not rank on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Cold Stone Creamery franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Cold Stone Creamery’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
Franchised
2017
- Outlets at the Start of the Year: 914
- Outlets at the End of the Year: 915
- Net Change: +1
2018
- Outlets at the Start of the Year: 915
- Outlets at the End of the Year: 898
- Net Change: -17
2019
- Outlets at the Start of the Year: 898
- Outlets at the End of the Year: 895
- Net Change: -3
Company-Owned
2017
- Outlets at the Start of the Year: 10
- Outlets at the End of the Year: 8
- Net Change: -2
2018
- Outlets at the Start of the Year: 8
- Outlets at the End of the Year: 3
- Net Change: -5
2019
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- The average gross sales contained in the table below pertains to the historic performance of Cold Stone Creamery stores that share the following characteristics: (i) all are in a location in the United States (excluding Guam); (ii) all offer a full menu and use the same recipes; (iii) all were existing outlets that did not open for the first time during the past fiscal year; (iv) all operate under the same trademarks; and (v) all were franchised.
- The time period measured was December 1, 2018 through November 30, 2019.
Franchised Stores Only
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