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Cold Stone Association Admits Frustration

Rudy Puig, Cold Stone franchise owner and outgoing president of the National Independent Association of Cold Stone Creamery Franchisees, sent out a memo to owners late last November, reflecting on the new group's accomplishments.

"In such a short amount of time, we hired an attorney to form our association, created our bylaws, elected a board of directors, developed our strategic plan, recruited several hundred members, had our first face-to-face meeting with Kahala to discuss our concerns and issues and have been trying to establish a dialogue with Kahala since then," Puig states.

The association formed by franchisee attorney Robert Zarco in October 2010 got caught up in controversy following the December 15, 2010 CNBC documentary Behind the Counter: The Untold Story of Franchising. Zarco was engaged by Cold Stone Creamery two weeks later "to defend and protect its brand against inaccuracies" of televised documentary, and to represent the franchisee association.  After receiving a threatening letter from attorney Zarco, CNBC interviewed Cold Stone executives and a number of dissatisfied franchisees that were included in a re-edited show.

Although the Miami-based attorney had explained his position in representing both franchisees and the franchisor in protecting the brand, he made it clear that Kahala/Cold Stone would have to sign a waiver of conflict of interest that they will never assert that his representation would constitute a conflict for him to represent franchisees and area developers in the future. He stated, "They agreed."

"To date, our letters and requests to Kahala have pretty much fallen on deaf ears..."

But in his recent memo to franchise owners, Puig admits that during the past seven months the association has pushed hard for Kahala to be more transparent. "To date, our letters and requests to Kahala have pretty much fallen on deaf ears, but that is not going to deter us from our mission.  Kahala would love to see the NIACCF die on the vine, but we will prevail and our ranks will grow. We will press forward in 2012 with our strategic goals and we will bring value to our members," Puig explains. He also encourages franchisees to bring in new members, saying that as their membership grows, so does their influencing powers with Kahala.

As the current board members now step down from their positions, Puig asks franchise owners to consider going on NIACCF's board of directors. "It is my goal during the transition . . . to send regular communications to our members.  Please keep an eye out for these going forward," Puig said.

Blue MauMau has not been able to confirm that Rudy Puig is a current franchisee of Cold Stone. Telephone calls to his former shops indicate he no longer owns those franchises.

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About Janet Sparks

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Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at or at 303-799-7398.