Raving, Coldstone Execs Now Selling Sandal Franchises

Former execs from Raving Brands and Coldstone Creamery are starting a new franchise. The "Flip Flop Shop" will sell sandals.

A review of the most current offering circular on the Cal-Easi Web site discloses that the franchisor has no franchise experience. President Brian Currin told the Houston Chronicle that the company owned 4 stores and was about to open its first 6 franchises.

The offering circular notes that the franchisor may require purchase of materials from companies which pay a "rebate" to the franchisor, but does not specify details. In the past, Raving Brands was accused by franchisees of obtaining vendor kickbacks, and Coldstone Creamery franchisees have complained of the franchisor charging fees for various required purchases.

The business acumen of the franchisor principals may concern prospective franchisees. Raving Brands was accused of financial malfeasance including the disappearance of funds raised by the franchisees for donation to charity. A review of Coldstone Creamery financial records shows that that franchisor is in tight financial straits and in previous years has balanced its books by taking money from customer gift-card purchases and declaring it to be "breakage" and therefore the property of the franchisor.

Narrowly focused retail operations can be risky for franchisees in any climate. In a time when the fashion industry is struggling it is a wise idea for a company to expand by using franchisee money rather than its own. Whether it is a wise idea for franchisees to invest in such a company remains to be seen.