“Earlier in this decade, Cold Stone Creamery was one of the hottest franchises around. The super-premium ice-cream stores attracted scores of franchisees hungry for a piece of the "Ultimate Ice Cream Experience."
Now many franchisees are selling their stores, overwhelmed by soaring bills and shrinking profits. Some have lost their homes, broken their retirement nest eggs or filed for bankruptcy.
What happened?”
“A number of franchisees also contend the company misled them, giving them promises of profit potential that proved unrealistic or inaccurate revenue numbers from existing stores. And some say that they got little help from the company as their stores went under.”
Check this article out...
http://online.wsj.com/article/SB121321718319265569-search.html?KEYWORDS=cold+stone+creamery&COLLECTION=wsjie/6month
Disgusting
16 years ago
I thought this article was interesting because it explained some spcific problems that the franchisees encountered. I found some articles that hinted that Cold Stone Creamery wasn't doing very well based on ratings, etc., but hte infomratin did not give any specific details. I think researching articles like this might help potential franchisees make decsions about specific companies because obviously the company itself is going to give the good news and not the bad news.
ReplyDeleteOuch!! After being so excited about their ventures, many franchisees are now selling at a loss. I noticed two trends from other disgruntled franchisee stories: 1) sole-source supplier and 2) inflated market and sales projections. It sounds like potential franchisees need to do some independent work to discern the market potential, plus determining the fair-market pricing of supplies. Cold Stone used the argument of "consistent quality" for the sole-source supplier, but they could have been simply padding their own pockets with the local shops' money.
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