Reagan, Kahala’s executive vice president and general counsel,
confirmed the company was late in filing the statements -- a delay it
blamed on its outside accountant -- but said the company was filing the
completed audit today.
“Six months is a long time without a financial disclosure statement,”
Reagan said. “There was an unfortunate delay and it had nothing to do
with our financial condition.”
The company provided The Post with
the just-completed 2010 financial statement showing the results for a
subsidiary, Kahala Franchising LLC, which doesn’t include results for
Cold Stone Creamery.
Kahala’s Cold Stone franchise, in
particular, has come under scrutiny in the past few years after store
owners complained of a flawed business model that saddled them with
shrinking profit margins and soaring costs. A number of franchisees
either sold their stores or filed for bankruptcy.
A source close to the situation said not having an audited disclosure statement “is extraordinarily odd for a going concern.”
Cold Stone, which operates 1,500 stores, has plans to open 16