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Simply put, the Cold Stone Creamery business model is broken. Regardless the amount of monthly revenue the variable expenses expand to reduce and eventually eliminates the possible profit margin. The following franchise forum posting illustrates the frustration between 2 high-volume Cold Stone owners:

" my store at one time was doing $670,000 per year. I had a franchisee about 24 miles from me that was doing $1.2 million a year. He always thought I was doing great and I always thought he was crushing it. Once we began to compare scorecards, we found out that neither of us was making a dime. But of course that's hard for you Kahala guys to believe, but your failure rate is proof. You are always trying to change the subject to Mr. Rolle. How about you guys addressing the facts for a change: kickbacks, churning, your out of control legal department, excessive couponing, market saturation, high build out costs, etc.?"

This section looks at the details of the business model. A closer look will show that the brain-trust at Cold Stone Corporate have not evaluated the amount of monthly expenses - particularly labor, product costs and utility costs have pinched the owners past the point of no return - past the point of profitability.

https://sites.Google.com/site/coldstonefacts/the-business-model-1

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∙ 15y ago
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