Cold Stone Franchise in 2024: Costs, Fee & FDD
Discover whether Cold Stone Creamery is the right franchise investment for you. Explore key insights, profitability, and what sets this iconic ice cream brand apart in the competitive dessert industry. Click to dive into the details!
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Cold Stone Creamery is a beloved brand in the world of ice cream, known for its unique approach to creating customizable desserts. Founded in 1988 by Donald and Susan Sutherland in Tempe, Arizona, the brand quickly gained recognition for its innovative concept of mixing premium ice cream with a variety of mix-ins on a frozen granite stone. This hands-on, interactive experience has set Cold Stone apart in the industry, making it a go-to destination for ice cream lovers seeking a personalized treat.
The core product of Cold Stone Creamery is its high-quality, super-premium ice cream, which is made fresh in-store every day. Customers can choose from a wide range of flavors and mix-ins, from fruits and nuts to candies and cookies, to create their perfect dessert. Beyond ice cream, Cold Stone also offers ice cream cakes, shakes, and smoothies, catering to a diverse customer base that includes families, couples, and individuals of all ages who appreciate a customizable dessert experience.
Cold Stone Creamery has grown significantly since its inception, boasting over 900 locations across the United States and more than 300 international locations in nearly 30 countries. This expansive presence allows the brand to serve millions of customers daily, solidifying its position as a leader in the frozen dessert industry. The franchise continues to attract both new and repeat customers with its unique product offerings and engaging in-store experience.
The franchise support system at Cold Stone Creamery is robust, offering comprehensive training and ongoing assistance to franchisees. New franchisees undergo a multi-week training program covering all aspects of store operations, including product preparation, customer service, and business management. Additionally, Cold Stone provides marketing support, site selection assistance, and a strong network of fellow franchisees, ensuring that you have the tools and resources needed to succeed.
Cold Stone Creamery Franchise Insights
- Cold Stone Creamery operates over 1,200 locations worldwide, with more than 300 stores in nearly 30 countries, demonstrating its strong international appeal and market penetration.
- The brand’s unique ‘create-your-own’ ice cream concept, where customers can choose from 11.5 million possible combinations, sets it apart from competitors and fosters high customer engagement and repeat visits.
- With over 35 years in the industry, Cold Stone Creamery has built a reputation as a premium ice cream brand, which can be a significant advantage for franchisees entering the market.
Cold Stone Creamery Franchise Key indicators
Growth YOY (%)
6%
vs industry 1%
Total U.S. Franchised Units
952
3-Year Failure Rate
3%
vs industry 11%
Sales-to-Investment ratio
0.7:1
How much does it cost to open a Cold Stone Creamery franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Cold Stone Creamery franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Cold Stone Creamery franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Cold Stone Creamery below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $12,000 | $27,000 |
| Rent/Security Deposit (3 months) | $9,750 | $19,500 |
| Travel and Living Expenses | $3,000 | $7,500 |
| Lease Review Fee | $0 | $2,500 |
| Architectural Fees | $8,000 | $21,000 |
| Leasehold Improvements | $102,000 | $275,500 |
| Exterior Signage | $10,500 | $16,000 |
| Equipment | $129,000 | $205,000 |
| PCI Compliance Costs | $150 | $1,300 |
| Opening Inventory | $8,000 | $8,000 |
| Employee Uniforms | $500 | $800 |
| Grand Opening Marketing and Advertising | $10,000 | $10,000 |
| Insurance Premiums | $500 | $2,500 |
| Permits and Licenses | $2,000 | $3,000 |
| Telephone and Utility Deposits | $250 | $1,000 |
| Computer Training and Certification | $100 | $250 |
| Miscellaneous | $3,925 | $3,925 |
| Depository Account | $3,000 | $3,000 |
| Additional Funds (3 months) | $20,000 | $20,000 |
| Total | $322,675 | $627,775 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Cold Stone Creamery franchise, the financial requirements typically fall within these ranges:
- Initial Investment The total initial investment for a Cold Stone Creamery franchise generally ranges between $323,000 and $628,000. This includes costs for the franchise fee, equipment, leasehold improvements, and initial inventory. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Prospective franchisees are usually required to have at least $100,000 in liquid assets. This ensures that you have enough cash on hand to cover startup costs and initial operating expenses.
- Net Worth Cold Stone Creamery typically requires a minimum net worth of $250,000. This helps to demonstrate financial stability and the ability to support the business as it grows.
These figures are estimates based on industry standards and publicly available data, and it’s always a good idea to confirm the exact requirements with the franchise directly during your inquiry process.
How much does a Cold Stone Creamery franchise owner make?
Calculating the salary of a Cold Stone Creamery franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Cold Stone Creamery franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Cold Stone Creamery Revenue & Gross Sales
Based on the most recent analysis, Cold Stone Creamery franchises have a median gross sales of $592,426. This strong financial performance highlights the brand’s consistent consumer demand and potential for solid revenue generation in the competitive ice cream industry.
Which key factors impact the average revenue performance of Cold Stone Creamery franchisees?
Several factors likely contributed to the performance of Cold Stone Creamery’s U.S. franchisee median gross sales over the past year. The continued popularity of premium, customizable desserts has driven steady customer demand, particularly as consumers seek unique, indulgent experiences. The brand’s strong marketing efforts, seasonal promotions, and strategic partnerships with delivery platforms have also expanded its reach, bringing in more customers. Additionally, Cold Stone’s focus on innovation, such as introducing new flavors and mix-ins, keeps the menu fresh and appealing, encouraging repeat visits. These factors, combined with an established brand reputation, likely contributed to the solid sales performance.
Cold Stone Creamery Franchise Operational Costs
When operating a Cold Stone Creamery franchise, the key primary ongoing operational costs you should consider include:
- Staffing Costs Salaries and wages for employees, including managers, shift leaders, and crew members, will be a significant ongoing expense. This includes payroll taxes, benefits, and any training-related costs.
- Ingredient and Supply Costs Regular replenishment of ice cream ingredients, mix-ins, and other supplies like cups, cones, and packaging materials is essential to maintaining operations. These costs can fluctuate based on sales volume and seasonal demand.
- Utilities Expenses for electricity, water, heating, and cooling will be ongoing, especially given the need to keep ice cream at the proper temperature and maintain a comfortable environment for customers.
- Maintenance and Repairs Regular maintenance of equipment like freezers, refrigerators, and the signature granite stone, as well as repairs to the store’s physical space, are necessary to ensure smooth operations.
- Local Marketing and Promotions While Cold Stone provides some marketing support, local advertising, community events, and in-store promotions will require ongoing investment to attract and retain customers.
These costs are crucial to running a successful Cold Stone Creamery franchise and should be carefully managed to ensure profitability.
Cold Stone Creamery Franchise Fees
When considering the ongoing fees associated with opening a Cold Stone Creamery franchise, it’s essential to understand the financial commitments involved. Here are some key ongoing fees:
- Royalty Fee and Surcharge 6% of Gross Sales plus a maximum surcharge of $10 per week, withdrawn electronically from your depository account weekly. Gross Sales include all revenue from your restaurant, excluding sales tax and authorized refunds, credits, and allowances.
- Advertising Fees 3% of weekly Gross Sales, with fees allocated as 2% to the National Fund and 1% to the Regional Fund for your Cooperative or store. These fees are also withdrawn electronically on the same schedule as the royalty fee.
Additionally, there may be other fees or expenses associated with operating the franchise, such as local marketing efforts or equipment maintenance, which could vary based on your specific circumstances and franchise agreement.
Cold Stone Creamery Franchise Earnings
Cold Stone Creamery franchises achieved a median gross sales of $592,426, highlighting the brand’s strong market presence and consumer appeal in the competitive ice cream industry. This figure reflects the consistent demand for customizable, premium desserts that Cold Stone offers, attracting a diverse customer base throughout the year.
For owner-operators, the potential operating profit earnings are estimated at $88,864 annually. This income level underscores the importance of hands-on management in maximizing profitability. By actively engaging in day-to-day operations, managing costs, and driving customer satisfaction, owner-operators can achieve solid returns on their investment. However, it’s crucial to consider factors such as location, operational efficiency, and market conditions, which can all impact these earnings.
How to Open a Cold Stone Creamery Franchise
Becoming a Cold Stone Creamery franchisee is a structured process designed to ensure you’re well-prepared for success. Here’s an overview of the steps:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application After the initial inquiry, you’ll be invited to complete a franchise application. This application helps assess your financial qualifications and background to determine if you’re a good fit for the franchise.
- Discovery Day Once you’re comfortable with the FDD, you may be invited to a Discovery Day at the Cold Stone Creamery headquarters. This is an opportunity to meet the corporate team, tour the facilities, and gain a deeper understanding of the business. It’s also a chance for both parties to confirm that the partnership is a good fit.
- Franchise Agreement If both you and Cold Stone Creamery decide to move forward, the next step is signing the franchise agreement. This legally binding document outlines the terms and conditions of your franchise ownership.
- Training After signing the agreement, you’ll undergo a comprehensive training program. This training covers all aspects of running a Cold Stone Creamery store, including product preparation, customer service, and business management. Training takes place at the corporate headquarters and in a designated store.
- Site Selection and Store Setup With the support of the franchisor, you’ll select a suitable location for your store. Cold Stone provides guidance on site selection, lease negotiation, and store design. Once the site is secured, you’ll proceed with the build-out and setup of the store.
- Grand Opening and Ongoing Support After your store is set up and staff are trained, you’ll be ready for the grand opening. Cold Stone Creamery assists with marketing and promotional efforts to ensure a successful launch. From there, you’ll receive ongoing support from the franchise team, including operational guidance, marketing assistance, and continued training.
Pros & Cons
Pros
Strong Brand Recognition: Cold Stone Creamery is a well-known and respected brand in the ice cream industry, which can help attract customers and build trust quickly in new markets.
Customizable Product Offering: The franchise’s unique mix-in concept allows customers to create personalized desserts, which fosters customer loyalty and repeat business.
Diverse Revenue Streams: In addition to ice cream sales, Cold Stone offers additional revenue opportunities through ice cream cakes, shakes, smoothies, and catering services.
Global Presence: With over 1,200 locations worldwide, the brand has a strong international footprint, which can be an advantage for franchisees in terms of brand recognition and customer base.
Cons
Market Saturation: Depending on your location, there could be significant competition not only from other ice cream franchises but also from local and independent dessert shops, which could impact profitability.
Seasonal Sales Fluctuations: Ice cream sales can be highly seasonal, with peak sales in warmer months and potential slow periods during colder seasons, affecting cash flow.
Operational Demands: Running a Cold Stone Creamery requires active management, especially in maintaining product quality and customer service, which may not suit investors seeking a more passive role.
