Litgation Update: November 11, 2011

posted Nov 12, 2011, 1:16 PM by Cold Stone Facts

November 11, 2011

Table of Contents: 

I.          Introduction.

II.        Media.

III.       Litigation Update.

IV.       Recent Successes in Countersuing Cold Stone Creamery.

V.        There’s Only One Way to Stop the Misery.

VI.       Conclusion. 

Dear Cold Stone Creamery Franchisees,

The following statements constitute my opinion:

I.          Introduction. 

My email address has changed.  My new email address is cdrolle@cox.net.

My old email account has been disconnected.  I have spent hours on the telephone with the old service provider and their engineers attempting to correct the problem, but thus far we have had no success.  Emails sent to my old address are currently being rejected.

II.        Media.

There has been a flurry of news media that franchisees should pay particular attention to.  One of the leading franchisee attorneys in the nation, Paul Steinberg, has published an excellent analytical article entitled Snell & Wilmer Outfoxes Zarco Einhorn on bluemaumau.org in response to a purported PR article authored by Snell & Wilmer—longtime attorneys for Kahala-Cold Stone Creamery.  There is also this narrative published on the International Association of Franchisees and Dealers website regarding the same Snell & Wilmer article.

It is very important that you take the time to read each of these articles and most importantly that you post your opinion to the comments section provided.  Though the IAFD site may be a little more difficult for posting because it requires registration, there is no such requirement for the bluemaumau.org website.  You should feel free to post anonymously these websites however the important thing is that you make your voice heard early and often.  Nothing has proven a more effective tool against Kahala-Cold Stone Creamery than your voice.  As we enter this phase of our impending litigation, we must get our message out to the public in order to gain support and improve our chances of success.

This is only the leading edge of what I have reason to believe will be a lengthy stretch of media coverage.

 III.       Litigation Update.

 I have accumulated quite a large amount of evidence from franchisees, particularly most recently, that may have been lost as a result of the issues I am having with my old email account.  A large amount of this evidence was provided to me within the past six months in response to special litigation requests on behalf of other franchisees who are in litigation with Kahala-Cold Stone Creamery and in response to the group litigation effort.  As a result, I am requesting the following.

  1. Please resend any email communications of importance that were sent to me within the past six months at the old email address.  Emails requesting to be added to or removed from the Litigation Database.  In order to allow franchisees the opportunity to resubmit requests to be added to the Litigation Database, I am extending the registration deadline to November 30, 2011 for all franchisees.  If you sent such a request to me and you did not receive a confirmation email that your request was fulfilled, please communicate your request to me once again. 
  1. Franchisees who so graciously came to the aid of their fellow franchisees by responding to either of my special litigation requests by providing valuable evidence for franchisees who are engaged in litigation with Kahala-Cold Stone Creamery or who are planning to sue the company, please refrain from resending this information.  I will ask these attorneys to provide me with an email address so this evidence can be distributed directly to the franchisee’s legal counsel.

IV.       Recent Successes in Countersuing Cold Stone Creamery.

As you may know, much of Kahala-Cold Stone Creamery’s franchisor/franchisee litigation is initiated by Kahala-Cold Stone Creamery.  However, once many franchisees have been sued by the company, the franchisee turns around and countersues Kahala-Cold Stone Creamery.  Franchisees are beginning to experience extraordinary success with these countersuits.

As an example, recent litigation in the form of these counterclaims have resulted in franchisees being awarded nearly $400,000.  Each of the franchise agreements that I have seen include an attorneys fee clause, which according to my attorneys, may result in a prevailing franchisee receiving full reimbursement of his/her attorneys fees in addition to the damages award.  I attribute this success in part to the centralized repository of information and evidence that we have amassed over the years by pooling franchisee resources.

What is important to remember is: (1) franchisees should view a lawsuit waged by Kahala-Cold Stone Creamery against them as an opportunity to WIN; and (2) franchisees should contact me when they are sued or intend to sue Kahala-Cold Stone Creamery.  I will assist that franchisees’ attorney in garnering evidence and constructing an effective legal strategy.  I am also happy to testify on the franchisee’s behalf as to Kahala-Cold Stone Creamery’s actions as I have in past cases yielding success.  Working together will put that franchisee in the best position to win.  My services are provided to the franchisee at no cost.

I recognize that most franchisees do not wish to be sued; however, if Kahala-Cold Stone Creamery initiates legal action against you, you should view this as an opportunity for success.

V.        There’s Only One Way to Stop the Misery.

On any given day, numerous franchisees contact me to tell me of the tremendous challenges they are forced to endure due to their failing store(s).  They speak of the unbearable financial toll, the damage to relationships and the unbearable stress and sleepless nights.  Many of them are behind on their mortgage and other obligations because they continue to put the store’s rent, payroll, supplies, utilities and other expenses before their own family needs.  They call me because they want to know how to end the pain.

My answer in the overwhelming majority of the cases is the same: Close your store and only then, can you begin to rebuild your life.  Put yourself and your family first for a change as opposed to Cold Stone.

The practice of franchisees pouring more and more of their hard earned savings or borrowing from family and friends to sustain their stores until they can finally sell the business is nothing but a mirage.  It is comparable in my view to a person being physically restrained and required to pour all the cash that he or she can amass into Cold Stone’s coffers.  There is no benefit for the franchisee—only delayed and magnified pain and misery to the franchisee and those who are closest to him or her.

Cold Stone is not in the ice cream business, they are in the business of siphoning cash from their franchisees in my view.  They have been particularly creative in these ways.  Their methods are familiar to you: Online Cake Ordering, gift cards, LSM, MyLSM Fishbowl, Make-A-Wish, fundraisers, etc.—all vehicles to make franchisees believe they can somehow make their stores profitable while constantly digging into their savings and borrowing from friends and family in order to continue to feed the monster that Cold Stone has become.

Last week, I heard from a franchisee who closed his store not quite a year ago.  He recounted that he still often thinks back to the painful financial conditions that he experienced as a Cold Stone operator.  He went on to say that, since his childhood, he had always had a particular fondness for the fall holidays.  As a Cold Stone operator, he said he had come to loath the holidays because of the particularly challenging financial experiences associated with his stores during this time.  He said he and his now ex-wife had run through their savings in their first several years of operating the store and for the last two fall/winter periods, they borrowed heavily from family, friends or anyone who would loan to them just to make it through the cold weather months.  He said his need for cash had become so acute, that he began to assess everyone he met on the basis of their ability and willingness to loan him money, though he knew he was not credit worthy because his stores were destined to fail.  As the weather began to turn cool this year, he could not help but to think back to how absolutely miserable and depressed he would become around this time in years past.  On the contrary, he is looking forward to the fall holidays this year as he relishes the fact that he no longer has stores to pull him down.

Franchisees must stop buying into Cold Stone’s ill advised remedies to profits.  They must also stop believing that Kahala-Cold Stone is attempting to do anything in earnest to make their stores profitable.  Cold Stone has jacked the price of sweet cream sky high and they are looking to sell that sweet cream to franchisees in large numbers, even if franchisees are giving that sweet cream away via Make-A-Wish, LSM, couponing, fundraisers, kiddie tours, etc., franchisees are forced to pay the sky high price and kickbacks that are attached to these products.

Franchisees in underperforming stores should choose to do the right thing.  Choose to relieve yourself, your family and friends from the tyranny of Kahala-Cold Stone Creamery and all that comes with it.  Free yourself and your spouse from the stress, worry and sleepless nights.

VI.       Conclusion.

Again, thank you for your impassioned communications.  Please do not hesitate to contact me if I can be of any assistance to you.  If you telephone me and I do not answer, be sure to leave your name and a telephone number and I will return your call.  In any case, I’ll be in touch with you shortly.

Cecil Rolle

cdrolle@cox.net
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