Cold Stone Creamery Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$120,700 - $655,275
Franchise Fee
$8,000
Min Cash Required
$3,000
Total US Locations
994
Business Summary
Cold Stone Creamery operates restaurants specializing in super-premium, freshly made ice cream, cakes, pies, smoothies, shakes, specialty beverages, soft drinks, and other frozen dessert products. These items are prepared using proprietary recipes and include a variety of complementary toppings and mix-ins. Customers can purchase products for take-out or eat-in, and the brand also offers licensed products. Cold Stone Creamery operates in both traditional settings like standalone buildings, retail shops, and malls, and non-traditional locations such as airports, amusement parks, and college campuses. Non-traditional restaurants typically offer a more limited menu.
Corporate History
Cold Stone Creamery's brand operations began in April 1994, initially through an affiliate named CSC Restaurants, which operated corporate Cold Stone Creamery stores. Franchises for Cold Stone Creamery were first offered by Cold Stone Creamery, Inc. starting in April 1994, continuing until March 2008. From March 2008 until March 2010, its predecessor, Kahala Franchise Corp., offered the franchises. Since August 2010, Kahala Franchising, L.L.C., an Arizona limited liability company formed in December 2008, has been offering Cold Stone Creamery franchises. In July 2016, Kahala Brands, the parent company of Kahala Franchising, merged with MTY Food Group, Inc.
Financial Overview
Investment Range
$120,700 - $655,275
Franchise Fee (Low)
$8,000
Franchise Fee (High)
$27,000
Minimum Cash Required
$3,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$27,000
Equipment Costs (High)
$524,000
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
Yes
Financing Details
Cold Stone Creamery does not offer direct or indirect financing for new franchises or guarantee obligations, except potentially for the lease of a site or if a franchisee purchases an existing corporate-owned Cold Stone Creamery restaurant from one of its affiliates. In such cases, the affiliate may, in its sole discretion, finance up to 100% of the purchase price. The annual interest rate for this financing would range from 0% to 12%, depending on the franchisee's creditworthiness and down payment amount. Repayment terms are typically between 12 and 60 months in equal monthly installments. The affiliate would require a first lien position on all equipment as a security interest. The franchisee, and their spouse if married, would be required to personally guarantee the debt. Cold Stone Creamery does not intend to sell, assign, or discount any financing arrangements to a third party, nor does it receive payments from placing financing from other sources.
Performance Metrics
Total US Locations
994
Franchised Units
992
Corporate Units
2
Avg Square Footage
850
Franchising Since
1994
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
20
Litigation Summary
Cold Stone Creamery has a history of legal disputes involving various affiliated brands and predecessors, as well as some current lawsuits. In 2016, a predecessor, The Extreme Pita Franchising USA, Inc., settled a misrepresentation lawsuit for $20,000. Cold Stone Creamery itself was involved in a breach of contract and fraud case with a franchisee from 2015 to 2017, which settled with the franchisor repurchasing the territory and forgiving damages after being awarded attorney's fees. Another case from 2014, Texas Nrgize #1, Inc. v. Kahala Franchising, was settled in 2015 for $35,000 due to alleged business opportunities act violations. Among other predecessors, SweetFrog Enterprises settled a fraud arbitration in 2015 for $300,000 and resolved a breach of contract lawsuit in 2016. Fresh Enterprises settled a misrepresentation cross-complaint in 2015 for $585,000. Famous Dave's of America settled a Minnesota Franchise Act violation arbitration in 2016 and a trademark infringement lawsuit in 2018. Key executives of MTY Food Group, Cold Stone Creamery's parent, settled a fraudulent transfer and breach of fiduciary duty lawsuit for $150,000 each in 2019. Wetzel's Pretzels settled a misrepresentation arbitration with a franchisee in 2021 for $125,000. Papa Murphy's International resolved two large consolidated lawsuits from 2014 in 2020, involving alleged Washington Franchise Investment Protection Act violations and misrepresentations, with various outcomes including payments up to $4 million and store purchases. Public agency actions include SweetFrog Enterprises settling Maryland Franchise Law violations in 2012, and Maui Wowi Franchising settling similar Maryland violations in 2005 and 2007. In the most recent fiscal year (December 2023 - November 2024), Cold Stone Creamery filed a breach of contract suit against All About Food, Inc. and Cold Stone Creamery Leasing Company, Inc. filed a forcible entry and detainer suit against JRF, Inc.
Bankruptcy History
Cold Stone Creamery has no bankruptcy information to report.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Cold Stone Creamery franchisees must provide at least 120 days' notice before the current term expires. They must be in good standing, meaning they are not in default of their franchise agreement or any other agreements with Cold Stone Creamery or its affiliates, and have not received more than three default notices during the term, or more than two in the five years preceding the renewal date. Franchisees must also maintain possession of their current location or secure an approved substitute, sign a new franchise agreement (which may have different terms, including higher royalty and advertising fees), pay a renewal franchise fee, and complete any required remodeling or refurbishment to meet current brand standards. They must also be current on all financial obligations and sign a general release.
Training & Support Program
Franchisor Assistance
Cold Stone Creamery provides pre-opening assistance with site selection (approval, not responsibility), construction, and furnishing guidance, including design drawings and specifications, and lists of approved vendors. Franchisees receive a Confidential Manual and a mandatory 120-hour training program for up to two individuals, covering both classroom and in-store instruction. After opening, Cold Stone Creamery offers a representative for up to five days during the grand opening, maintains a continuing advisory relationship for marketing, merchandising, and general business operations, and provides information on operating standards. The franchisor conducts periodic inspections and quality service checks, offers software information for administrative and inventory control, and reviews substitute locations. Cold Stone Creamery also manages a national and regional advertising fund, directs all advertising and promotional programs, and requires the use of an approved POS system, mobile application, and online ordering services.
Initial Training Hours
120
Training Location
Online or at corporate offices in Scottsdale, AZ, with in-store training at affiliated restaurants in the metropolitan Phoenix, AZ area.
Ongoing Support
After opening, Cold Stone Creamery provides several ongoing support services. The franchisor offers continuing advisory relationships, including consultation on marketing, merchandising, and general business operations to help franchisees improve their restaurants. They provide ongoing information about operating standards, which may be modified over time. Cold Stone Creamery also conducts periodic inspections and quality service checks of franchised restaurants to maintain high and uniform standards. Franchisees are informed about available software from approved third-party vendors for administrative, bookkeeping, accounting, and inventory control. The franchisor reviews and approves substitute locations if a franchisee wishes to relocate. Cold Stone Creamery may also require franchisees to attend refresher or additional training programs, conferences, and seminars, for which franchisees may incur a registration fee and travel expenses. Franchisees also have the option for a one-time renewal of their Franchise Agreement.
Franchise Requirements
Ideal Candidate Profile
Cold Stone Creamery seeks franchisees who intend to actively participate in the direct operation and daily affairs of their restaurant, rather than seeking a passive investment. While personal participation is not strictly mandated by the franchise agreement, it is the franchisor's strong preference, as owner-operated restaurants typically perform better. Ideal candidates should be prepared to devote a substantial amount of time to their Cold Stone Creamery restaurant, demonstrating strong management skills, capabilities, and best efforts to enhance the business and the System. They must also possess the financial capacity to meet the investment requirements and, if applicable, be in compliance with any existing franchise agreements. The franchisee or their designated manager must have adequate English reading and writing skills to complete the training program and effectively communicate with employees, customers, and suppliers.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Staffing Notes
Cold Stone Creamery requires franchisees to employ at least one full-time, on-premises supervisor, referred to as the 'Manager,' for their restaurant. This Manager must meet the franchisor's criteria as a qualified restaurant operator and is expected to devote their entire time during normal business hours to the management, operation, and development of the franchised business. The Manager is not required to have an equity interest in the business. Furthermore, a Manager must be present on each shift and be able to read and understand Cold Stone Creamery's written materials, as well as communicate effectively in English with employees and customers. All personnel employed in the restaurant must adhere to the franchisor's standards for sanitation, cleanliness, and demeanor, and must wear approved uniforms or clothing. Employees whose duties involve customer service must also have sufficient literacy and fluency in English, or the primary language of the market, to adequately serve the public.