Cold Stone Creamery
Volume 12, Number 30
Issue 578
Normally, I am against franchising because time and time again I have had clients who have bought franchises for the wrong reasons rather than starting their own businesses or not starting one at all. Remember, about four out of five businesses fail and the worst reason to buy a franchise is to think that buying a franchise automatically increases your chances to succeed substantially—it usually doesn’t.
Simply looking at and observing franchises does provide valuable lessons to people who are thinking about starting businesses because new ones that come to town often bring a level of professionalism that hasn’t been seen yet.
Since I think that EVERY business should have a retail mentality (including service, manufacturing and wholesale), we can all learn things from going into the hot new retail franchise in town and looking around at how they have trained their people, furnished their store and what their mission statement and goals might be.
One new retail franchise has recently caught my eye (and taste buds): Cold Stone Creamery. This one’s a winner. I urge everyone to go into a Cold Stone Creamery soon and be impressed. Buy the ice cream, linger with the manager and look at how happy the employees are. Then, look at the line of customers that is out the door.
Now, I am biased because I love ice cream. But, I’m also critical of the vast majority of ice cream stores because they present their flavors in the same way that other ice cream stores historically do, hire people who look like they hate working there and could take lessons from me about how to clean-up. Generally, ice cream stores miss the obvious: It doesn’t matter how great your ice cream tastes if the people scooping it aren’t happy and if the store is dirty and messy.
Cold Stone Creamery does it right—very right. They have set a new industry standard on what ice cream stores should be like. Just “Google” (www.google.com) “Cold Stone Creamery” and you will find out that this is a franchise that appears to be different. A different philosophy that is well-thought-out and that is at the right place and time and that sells the right product.
A privately owned company started in 1988, Cold Stone Creamery has about 1,500 stores nationwide and hundreds more coming. Though the franchise appears to cost $50,000 to $75,000 before equipment and leasehold considerations (and that is a lot of ice cream—or is it?), we can all admire some things about them—at least I did from the two franchises that are in Chesterfield County, Virginia.
The first thing that I noticed is that the place was packed with customers each of the several times that I have been there at different times of the day. This tells me that they have the right product at the right place and at the right time. The next was that the people who were working there looked genuinely excited and happy to be there. Take it from someone who used to work at an ice cream store a long time ago, it’s not easy to stay happy for very long.
The presence of happy workers always tells me that an entrepreneurial spirit has permeated the establishment. At Cold Stone Creamery I noticed reasonable prices and simplicity of service—both scored outstanding. Lastly, I noticed management--er, rather, management noticed me. Management was present, not absent, and even though my $3.12 purchase was miniscule, the fact was that I was greeted by management—each time—is important.
When I did my homework later at the company’s website, (www.coldstonecreamery.com), I found that they have charitable associations that they promote with their business, monthly events and that they have a sense of humor. I liked the idea of stating that there was a franchise in Anchorage Alaska that sells ice cream when it is 8 degrees in January and another in Lake Havasu City, Arizona where the July temperature is 113 degrees.
I especially liked the company’s “Pyramid of Success” that is present at their website that essentially describes how to successfully operate one of their franchises. Actually, just plug in your own business into their formula and you will see that all successful businesses have common principles whether they are ice cream stores or plumbers or auto mechanics. Loser businesses don’t have Pyramids of Success because they aren’t successful.
Cold Stone Creamery--at least the franchisor and the two Chesterfield franchisees-- “gets it.” Do I think that they have been reading TaxFax(tm)? No. But I want to use them to illustrate the points that I’ve been trying to talk about in most of my writings.
So, with full credit given to the founders of Cold Stone Creamery, Donald and Susan Sutherland, and my personal admiration, here is their Pyramid of Success:
Our Vision: The world will know us as The Ultimate Ice Cream Experience by having 1,000 profitable stores operating by December 31, 2004. [Attention Mr. And Mrs. Sutherland: You have met this goal—congratulations. –David]
Our Mission: We will make people happy by selling the world’s highest quality, most creative ice cream experience to the American customer and worldwide. We will achieve this through a community of franchisees whom we will serve as our partners and customers. The success of the franchisees and the ultimate happiness of the consumer will go hand in hand as our number one priority.
Daily Purpose: Make every day a great day for ice cream by selling more ice cream to more people, more often, in more locations, so the franchisees can make more money.
Key Success Factors: Achieve breakthrough brand status; have profitable units, creating strong franchisee relations and creamery culture, achieve operational excellence, secure premier locations for our units, lead all competitors in unit development, achieve low cost supplies and reliable distribution
Key Benefits: Higher sales, lower costs, more profitable units, more marketing dollars, higher asset values
Core Values: Do the right thing, be the best, be #1, bring out the best in our people, profit by making people happy, win as a team
So I urge everybody to make their way into a Cold Stone Creamery as soon as possible. When you get there, linger and look around. But before you go, spend a little time thinking about how you would run your own ice cream store using your own business as a frame of reference. Then, when you arrive at Cold Stone, look at how they run theirs and see how wrong you might have been—its inspirational to those of us who can only wish we owned our own ice cream store.
David B. Robinson, CPA
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