Ice cream store chains are one of the hottest things during summer. They also never lose their popularity all year round, especially when the weather is nice.
Most entrepreneurs like the idea of having an ice cream franchise store because the profits could be high due to the constant popularity increase.
Cold Stone Creamery is a popular ice cream international store chain that operates worldwide.
Are you thinking about opening a Cold Stone Creamery franchise? It could be a good idea because there is good potential and a solid franchise system in place.
This article will go through Cold Stone Creamery and its franchise system and its associated costs.
About Cold Stone Creamery and Cold Stone Creamery History
Cold Stone Creamery is an international ice cream store chain that operates worldwide with thousands of stores, 900 of which are in the United States.
They were founded in 1988 in Arizona by two ice cream fanatics. The goal of the owners and the current selling point is to provide the customer with an ice cream that is made every single day, in-house.
The company grew extremely quickly, started to franchise in 1994, and currently runs over 1,300 stores worldwide. They still make their ice creams fresh, in-house, every day, without any additives or preservatives like the store-bought ice creams. Cold Stone Creamery offers a variety of flavors, from Oreo to Butterfinger Snickers.
Franchise Model Table
| Cost or Fee | Amount or Percentage |
|---|---|
| Initial Investment | $53,200-$602,775 |
| Franchise | YES |
| Franchising Since | 1994 |
| Franchise-Fee | $8,000-$27,000 |
| Royalty-Fee | 6% |
| Liquidity | $125,000 |
| Estimated Outlets | 1,300+ |
How Much Does it Cost to Open a Cold Stone Creamery Franchise?
There are two types of Cold Stone Creamery franchise stores. Traditional and non-traditional. Each type has a different cost scheme and varies based on different factors.
For traditional franchise stores, the franchise fee is between $12,000 and $27,000, and the expected total cost is between $310,375 and $602,775, and this expected cost includes the franchise fee, as well.
For non-traditional restaurants, the franchise fee is between $8,000 and $20,000, and the total expected investment is between $53,200 and $474,775, including the franchise fee.
Profit & Revenue Of Cold Stone Creamery
There is no company information about the company’s profit and revenue numbers. In their franchise document, we can see the average gross sales per store.
With those numbers, we estimate that Cold Stone Creamery’s annual revenue is approximately $790 million. The net profit could be between $118 million and $157 million.
Overall Sales Of Cold Stone Creamery
The average gross annual sales for all franchised Cold Stone Creamery outlets is $607,932. The top 20% of high-earning stores make $954,584 annually, and the lowest 20% makes $338,789 annually in overall sales.
How Much Does A Cold Stone Creamery Franchise Owner Earn?
There is no information about the net profits per store by Cold Stone Creamery. That’s why we can only make estimations by the industry standard. Ice cream shops have an average profit margin of 15% to 20%.
Using this profit margin, we can estimate that the Cold Stone Creamery franchise owner’s salary is between $91,000 and $121,000 annually, with the average being $103,348.
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 607932.00 |
| Rent | 10.38% | (63072.94) |
| Insurance | 5.19% | (31536.47) |
| Salaries | 20.75% | (126145.89) |
| Franchise Royalty Fees | 5.19% | (31536.47) |
| Utilities | 2.08% | (12614.59) |
| Cost of Goods Sold (COGS) | 25.94% | (157682.36) |
| Labor (Variable) | 13.49% | (81994.83) |
| Total (Expenses) | 83.00% | (504583.56) |
| Net Profit | 17.00% | 103348.44 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Cold Stone Creamery
With a total investment of $602,775 and an estimated franchise owner’s yearly profit of $103,348, we can calculate the payback period.
So, to find out how long it will take to earn back the initial investment:
Payback Period = total Investment / Yearly Profit = $602,775 / $103,348 = 5.8 years
Based on these figures, it will take approximately 6 years to pay back the initial investment for Cold Stone Creamery. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Cold Stone Creamery
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 893 | 895 | +2 |
| 2020 | 895 | 879 | -16 |
| 2021 | 879 | 889 | +10 |
For the Franchised outlets:
- In 2019, the growth rate was (2)/893Ă—100≈0.22%
- In 2020, the failure rate was (16)/895Ă—100≈1.79%
- In 2021, the growth rate was (10)/879Ă—100≈1.13%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 3 | 3 | 0 |
| 2020 | 3 | 3 | 0 |
| 2021 | 3 | 5 | +2 |
For the Company-Owned outlets:
- In 2019, the failure rate was (0)/3Ă—100≈0.00%
- In 2020, the failure rate was (0)/3Ă—100≈0.00%
- In 2021, the growth rate was (2)/3Ă—100≈66.66%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 896 | 898 | +2 |
| 2020 | 898 | 882 | -16 |
| 2021 | 882 | 894 | +12 |
For Total outlets:
- In 2019, the growth rate was (2)/896Ă—100≈0.22%
- In 2020, the failure rate was (16)/898Ă—100≈1.78%
- In 2021, the growth rate was (12)/882Ă—100≈1.36%
According to the above-mentioned data, we can see that the franchised outlets for Cold Stone Creamery grew in 2019 and 2021, showing a growth rate of 0.22% and 1.13%. The company also experienced a decline in the year 2020, showing a failure rate of 1.79%.
On the other hand, for company-owned outlets, the growth rate of Cold Stone Creamery was lying in the range of 66.66% for 2021.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Cold Stone Creamery franchise has expanded in the years 2019 and 2021, showing a total growth rate between 0.22% and 1.36%. The company also experienced a decline in the year 2020, showing a failure rate of 1.78%.
Training and Support
There are two types of available training to the new franchisees.
The first one is the initial training. They spend two weeks in a store to learn every aspect of managing a store, from making the ice cream to managing the inventory, serving the products, and making use of marketing.
The second one is where franchisees spend 80 hours in on-the-job training to learn all operational-related things.
They provide ongoing training, as well, after opening and meet with you regularly to make sure that everything is running smoothly and answer any of your questions.
There is also ongoing marketing assistance like social media marketing, SEO marketing, and many others.
Terms of Agreement and Renewal
The initial term of the agreement, whether traditional or non-traditional, is for ten years. If the lease of the store is shorter than ten years, then the term is for however long the lease is.
Renewal is possible if both parties are in good standing. The franchisee can renew the agreement for one five-year term. There is no other further renewal at the end of this five-year term.
Obligations and Restrictions
Even though it is not specifically stated in the franchise agreement, Cold Stone Creamery chooses applicants who can personally participate in the operations of the store. The franchisee or a manager who has completed the initial training must supervise the operations on-premises, full-time.
The franchisee is restricted from conducting any other business activity on the premises of the designated Cold Stone Creamery franchise store.
Financial Assistance
Cold Stone Creamery doesn’t provide direct financial assistance but can provide indirect financial assistance. They have active relationships with third-party sources that can offer specific financing opportunities to cover the franchise fee, equipment, and startup costs.
Cold Stone Creamery Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
| MaggieMoo’s Ice Cream & Treatery | $33,000 | 6% | $225,000-$375,000 |
| Marble Slab Creamery | $25,000 | 6% | $190,800-$402,150 |
| Cold Stone Creamery | $8,000-$27,000 | 5% | $53,200-$602,775 |
Conclusion
Cold Stone Creamery is undoubtedly one of the most popular ice cream shops in the United States and in the world. They operate over 1,300 stores worldwide, and each franchised store makes around $600,000 in annual overall gross sales. Which leaves around $100,000 in annual net profit per store.
These numbers are highly lucrative compared to the industry standards. That’s why Cold Stone Creamery is a good franchise option if you are looking to own one.
FAQs
Can I choose which type of Cold Stone Creamery franchise store I will open?
Yes, you choose whether you want to open a traditional or non-traditional franchise store. There might be certain rules to follow for each type if you want to open one of them.
What is the franchise fee of a Cold Stone Creamery?
The franchise fee is between $8,000 and $27,000, depending on the type of store you will open.
Is Cold Stone Creamery a franchise?
Yes, Cold Stone Creamery is actively a franchise.
How Many Locations Does Cold Stone Creamery Has?
There are 986 Cold Stone Creamery locations across the United States.
Where Is Cold Stone Creamery Headquartered?
Cold Stone Creamery is an American international ice cream parlor whose headquarters is in Scottsdale, AZ.
Who Owns Cold Stone Creamery?
Cold Stone Creamery is owned by Kahala Brands. It is one of the fastest-growing franchise companies.
Who founded Cold Stone Creamery?
Cold Stone Creamery was co-founded by Donald and Susan Sutherland in the year 1988.
Sources