HOT SCOOP

$156 million a year selling custom-blended ice cream cones and cakes.

CASHING IN

Cold Stone Creamery is the nation’s fastest growing super-premium ice cream franchise, with stores in 44 states from coast to coast, including Hawaii, Alaska and the Caribbean. Cold Stone Creamery handcrafts its secret recipe for super-premium ice cream, and then customizes each order by combining a variety of mix-ins on a frozen granite stone. The resulting ice cream delivers an unbeatable first bite sensation, says Cold Stone Creamery. For more information about the company and the franchise opportunity, visit the company’s website at: www.coldstonecreamery.com. The site is full of fascinating facts—such as: the first ice cream parlor in America opened in New York City in 1776 and it was Ronald Reagan who, in 1984, designated July as National Ice Cream Month and the third Sunday of the month as National Ice Cream Day.

Cold Stone Creamery, the fastest growing super-premium ice cream franchise in the United States has opened 228 new stores across the country in 2003 and has another 450 on the clipboard ready to roll. The Creamery attributes its explosive growth directly to one of the company’s key success factors: “Secure premier locations for our franchisees.”

The Cold Stone Creamery Real Estate Team executed 341 leases in 2003 and has recently delivered 500 new leases. New lease provisions that secure payment to landlords directly from the home office have fueled lease negotiations. This new initiative will give Cold Stone Creamery the ability to negotiate better lease terms, allowing franchisees to open their stores faster. The franchisor averaged about two leases per day in 2004.

“We’re looking for a solid development plan with clear objectives and a systematic process for our brokers,” said director of real estate, Brett Sheets. “The key ingredients that make a premier location desirable for Cold Stone include site features, demographics and the physical characteristics of the trade area.”

The company’s proven real estate formula is a key contributor to Cold Stone Creamery’s bite out of the $20.7 billion-dollar ice cream industry. Boasting a $380,000 annualized average unit volume, the highest of any super-premium ice cream concept, 2003 system-wide revenues exceeded $156 million, up from $88 million in 2002 and $45 million in 2001. The biz is booming.

Cold Stone Creamery also continues to set new growth records and maintain its position as the nation’s fastest growing ice cream concept. Fans of Cold Stone’s menu are devoted to the custom blends offered with each order of the high quality ice cream. For example, a consumer may order brownie chunks or Reese’s peanut butter cups mixed in with their favorite ice cream flavor.

The company was founded by Donald and Susan Sutherland. They searched everywhere for ice cream that was “smooth and creamy,” rather than the traditional hard-packed or soft-serve varieties. In 1988, after coming up empty in their search, they opened the first Cold Stone Creamery in Tempe, Arizona.

Every ice cream creation the Sutherlands offered could be customized by each client who entered the store. The blending of the mix-ins was completed on a frozen granite stone and served in a fresh-baked waffle cone. Word soon spread far and wide among ice cream lovers that Cold Stone Creamery had something new to offer and the revolution began. In 1995, the first franchise store opened in Tucson, Arizona, followed by the first out-of-state store in Camarillo, California. The rest is history.

The “mission” of Cold Stone Creamery is: “We will make people happy by selling the world’s highest quality, most creative ice cream experience to the American consumer and worldwide.”

Cold Stone Creamery is certainly on a winning track. The trend in ice cream is toward “indulgence.” Premium and super-premium quality ice creams continue to outsell regular ice cream as well as the light, reduced fat versions, according to supermarketguru.com.

Franchisees’ success stories are fascinating. Dan Farr, a well-known auto supply parts businessman, and his daughter, Brenda, both of Anchorage, Alaska, experienced the “Ultimate Ice Cream Experience” at a Cold Stone Creamery in Arizona in the 1990s. After returning home, Dan and Brenda got to thinking how they could take this unique ice cream concept to Alaska. In 1997, Dan returned to Arizona to discuss franchise opportunities at the company’s headquarters. At the time, Cold Stone had just begun franchising and had no plans to expand to Alaska. The majority of the stores were in warmer climates. Through persistence Dan was finally awarded the first Cold Stone Creamery franchise license in Alaska. Dan Farr has since passed away, but his daughter and son-in-law have carried out his dream by owning their own Cold Stone Creamery and serve as area developers for Alaska. There are now five stores in the state and they continue to be among Cold Stone Creamery’s top performers.

Glenn McCarroll turned his running shoes in to serve up ice cream. The former actor and Ironman World Championship contender chose to pursue other interests last year after participating in at least 100 triathlons and races over the past six years. After meeting up with a friend, Roger Lord, at a gym to work out, Glenn found that his friend was also interested in owning a Cold Stone Creamery franchise. The two are now partners with their own franchises in El Paso and Las Cruces, Texas.

Brian Curin had a dream. He’s the former director of marketing at Cold Stone Creamery but wanted to make a change and move to the Caribbean. He and his wife, Felicity, opened a Cold Stone Creamery in the Virgin Islands and now own the development rights to the Caribbean. They opened a store in Puerto Rico in December 2002.