Log In / Register | Feb 7, 2012

Due Diligence: Cold Stone Creamery - Utilities

 The Monthly utilities in this small ice cream franchise are extremely high and at times can account for as much as 10% of your monthly revenues.  When you look at the equipment list you will begin to see why.  Let's take a look at each one and what each utility will cost you.

Electricity (monthly)  -  ($900-$1300)

Due Diligence: Cold Stone Creamery Fees

Let's begin with the fees being paid by you to Cold Stone Corporate (CSCorp).

I have often pictured the franchise concept as a long revenue trough with weekly sales being poured in at one end and at the other end the franchisee desperately waits for a financial draw.  In between, I see, all of the money-starved hogs lining up at the trough each month - the largest of those hogs is Cold Stone Corporate snorting and sloshing up as much of your weekly revenue it can possibly get.

A Recovering Cold Stone Creamery Franchisee

My real job frequently sends me to Shanghai and I have long (jet-lag) Shanghai nights to peruse the Blue Mau Mau site and scratch my head and wonder "how the hell did I get sucked into the Cold Stone Creamery spiral of death".

I am now a recovering Cold Stone Creamery Franchisee.

Truth in Franchising Act of 2007

Truth in Franchising.  Where is it?  Someone please tell me.

The US Government introduced the "Truth in Lending Act" in 1968 as a way to inform the consumer of certain conditions pertaining to the funds be borrowed.  It did not dictate the conditions or the rates of the loan, it only "disclosed" the actual terms and costs of the loan to the consumer.

Where is the "Truth in Franchising Act"?  An act that does not regulate the Franchise agreements or dictate the terms by which it is constituted, but rather, an act that simply discloses the full context in which the franchise agreement is executed.

The Piranha Pond

Piranha

Ever feel like fresh meat in a Piranha Pond?

Nip, Nip …

          Franchise Fees

          SBA Loan

The Road Most Traveled ...

I went to Borders on Thursday to purchase the "Franchise Fraud", as I selected the book from the shelf a wave smoke filled the air.  I turned to see a tall cigarette-smoking-man dressed in gray with a cigarette gripped between the thumb and index finger.  Wrinkles creased his face - wrinkles from years of intimidation, selective terminations and territorial encroachments.

He spoke with a whisper …. "put the book back, don't go there, leave it alone, it must and will remain hidden."  My eyes glazed over, I returned the book to it's spot and went to the gardening section.

Seeds of Change...

While it would be great to have TRUTH in FRANCHISING and Fair Franchising protection by the Feds, it appears that this fight will need to begin at the state and local levels, first.  

It appears that this fight has already started without me and most other franchisees.

I am encouraged by the STATE franchise protection acts that have been passed (or pending) by some states. Statutes from these Acts can be found in most UFOCs as amendments.  Here are some of the protections I found from these state franchise acts:

The Franchise Rose Line

I have found the Franchise "Rose Line"...

I have followed it through the "buy this, by that franchise" sites, through the "kiss our feet" forums, through the "best 50 Franchises" sites and finally, at it's end, I have found the truth hidden deep in the sites of the TFSA, the Solomon Articles, the Purvis Papers and the AAFD.  I look back for others following and, rather, I am haunted by the monk in a hasty pursuit with section 17 firmly in his grasp and I know that my time draws near. I scold myself for not finding this trail years ago… but that is a different blog. 

Proven Systems?

Why does the everyone keep saying that franchises are "proven systems". 

Using the word "proven" is gratuitous and self serving.  I have not seen one UFOC that provides enough data to the use the word "proven" in any description.  Perhaps, you can point to some grand fathers of the franchising industry that can justify the use of "proven" only because historical data and shareholder approval, but most franchises get a lot of mileage out of throwing the term "proven" around with no means of backing up the word. 

I will go even further and submit that some concepts are the opposite of "proven" and that they are non-viable from the first day the doors are open.  And even worse, over an extended period time - after adding increasing product costs, increasing wages, added competition (in and out of the system) - that the viability falls even further.