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The Cold Stone Facts
 Dedicated to documenting and maintaining the history of the broken business
model of Cold Stone Creamery.


A Monthly Breakdown of this
Broken Business Model

 
What is the break even point for the Cold Stone Business model? 

Let's take a look at the breakdown of each of the primary proforma business elements.

The number of Cold Stone creations ($4.99 average) required to sell to break even on each of the proforma items is shown to the right. 



Monthly Expenses                          Number of Creations

Cold Stone Fees  (9%) ..... ($2250)         ------                 450 Creations
Lease  (%12)  ......  ($2950)                     ------                 590 Creations
Debt Service  (13%) ..... ($3100)             ------                 620 Creations
Labor Costs (20%) ....... ($5000)              ------                1000 Creations
Product  (20%)  .......... ($5000)               ------                 1000 Creations
Utilities  (9%)  ...........  ($2075)               ------                 415 Creations
Misc Expenses (4%) .  ($974)                  ------                195 Creations
Taxes (14%) .........  ($3591)                    ------                 718 Creations

Minimum Monthly Total     -   $24640     ------                4988 Creations

So, based on a month of solid sales of $25000, congratulations, you have just broken even for the month.  The only items that will be adjusted based on a slow down or increase in customer traffic is Labor and amount of products used.


All of these figures are based on 20% labor and 20% product costs. 


Ask any Franchisee and you will find that operating a Cold Stone Creamery at 20% labor and 20% product costs is difficult to achieve if not impossible.  It is for this reason that  Cold Stone Creamery concept is a "broken" business model and deeply flawed concept and incapable of turning a profit - short term or long term, low, medium, high volume, self-managed or absentee owned. 


Reality Check.  The actual average is more around 30% labor and 30% product costs.  Cold Stone Area Developers and profitability teams try and tell you that properly operating stores should be at 20% labor and 20% products, that level of management burns out the crew and customer service deteriorates.

So, how many creations do I need to sell to have a $25000 month just to break even?  The average creation (or smoothie or shake) sells for $4.99:

 

4988 Creations per month

166 Creations per day


Average day is 11am to 10pm - 11 hours.


15 creations per hour of each day of each week of each month - in order to make just $25000 per month.  And remember $25000 is your break even target - that's 15 creations per hour just to break even - you haven't brought home any profit yet!


Now, of course you can sell ice cream in Buckets (48oz for $8.99) or Quarts (32 oz for $5.49) or Pints (16 oz for $4.99) or even better you can sell Cakes (large $22.95 or Small $16.95), but be ready to cover the costs of the plastic-ware, the cake training/decorating and additional product costs going  into larger creations.

 

The Cold Stone franchise is a giant revenue hog trough with weekly sales being poured in at one end and at the other end the franchisee desperately waits for a financial draw.  In between all of the hogs lining up at the trough - the largest HOG of all is Cold Stone Corporate and it's many vendors sizing you up and then snorting up as much of your weekly revenue it can possibly get.  THINK BEFORE YOU BUY!!


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