Tensions Rise at Cold Stone Creamery

PHOENIX - The National Independent Association of Cold Stone Creamery Franchisees recently sent out an email to all franchisees voicing its concern over price increases by the franchisor, pointing to a report by former franchisee Cecil Rolle, longtime advocate for owners struggling to make money on their stores.

The NIACCF stated, “I'm sure by now you have seen the recent email from Cecil Rolle. We are all very concerned about the pricing increases we are seeing from Kahala and the association is currently putting together a missive for Kahala to address these increases and the impact they are having on all franchisees,” the unsigned memo states.

In an effort to get more information, Blue MauMau tried to reach Rudy Puig, franchise owner in Florida who appeared on the re-make of CNBC’s television documentary Behind the Counter: The Untold Story of Franchising with Cold Stone’s CEO Dan Beem and its attorney Robert Zarco of Zarco Einhorn Salkowski & Brito earlier this year. Puig is believed to be a leader in the newly formed franchisee organization formed by Zarco and backed by Cold Stone. When Blue MauMau called his store, a woman told us Puig was no longer the owner, and did not give any further information.

The documentary sparked outrage from Cold Stone Creamery, prompting the company to send out an email to franchisees outlining its strategy “to defend and protect” its brand against “inaccuracies” of the CNBC documentary, which the network has repeatedly aired since December 15.” At that time they hired Robert Zarco to represent the new association’s members, to protect the company’s own interests in the matter.

The NIACCF told of other actions it was now taking. “We are actively working with Zarco to continue the fight to get satisfaction on such issues as FMP dollars [flexible marketing program], gift card breakage and licensing among other things.” They urged franchisees to ban together under the NIACCF umbrella, saying it is the only way to have any impact on Kahala.  “By building a strong association with hundreds of members, Kahala will have no choice but to recognize our demands and work with us to a satisfactory conclusion,” the memo states. In a cry for membership they stressed, “But we NEED FRANCHISEES to join the association. Strength is in the numbers, not in emails such as Cecil's.”

NIACCF said it recognizes that they haven't been able to show great inroads as yet but they were making progress and needed every member's support and patience as they move ahead in their “quest to get Kahala to become a real partner with franchisees.”  They asked owners to take time to complete a survey they were sending out later in the week. “We'll gather the results and share them with everyone as a starting point to unify our group and be better informed of the desires of membership as a whole,” the email states.

Robert Zarco did not wish to discuss the matter. He did, however, concede that there is significant tension between Cold Stone and its franchisees and area developers.

In view of the NIACCF trying to gain members, Rolle said he thinks franchisees are justified in their decision to reject membership in the NIACCF. He said in a statement:

Here you have an organization that stormed onto the scene under suspicious circumstances during Cold Stone's overreaction to CNBC's unflattering documentary portrayal of Kahala and Cold Stone Creamery and then essentially disappeared for eight months. Of greater concern, the NIACCF has yet to respond to more fundamental perplexities such as why their organization is being supported by Cold Stone Creamery? What’s in it for Kevin Blackwell, Dan Beem and the Kahala-Cold Stone Creamery Empire that would cause them to pay Robert Zarco, the association’s attorney? Why did Mr. Zarco appear on national television with Mr. Beem and defend the company he was hired to oppose while blaming franchisees for their own unprofitable circumstances? The NIACCF purportedly opposes Cold Stone’s kickbacks, unjustified price increases and other franchisee hindering activities, yet Cold Stone provided the association with the franchisees’ email addresses? Sounds to me like the NIACCF and Kahala-Cold Stone Creamery are on the same side. Our franchisees are much too sophisticated to fall for that.

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Related Articles:

• CNBC’s Behind the Counter Back on Air
• CNBC Shelves Cold Stone Story after Zarco Attacks
• New Cold Stone Group Explains Purpose, Zarco Role
• Cold Stone Franchisee Groups Urged Not to Respond to Media