Cold Stone Creamery Co-Brands With Soup Nazi
(FranchisePick.Com) Is the Cold Stone Creamery’s franchise bowl half-empty or half-full? Amidst rumors of internal problems and a third round of layoffs at franchise amalgam Kahala Cold Stone, here’s the latest attempt at making their concepts work: sticking a couple of them together. Who knows? They can always add a Cereality franchise to the mix.
The First Co-Branded Store Makes NYC Debut on Astor Place
‘Soup and Ice Cream for Life’ Raffle Drawing During Ceremony
NEW YORK, Oct. 8 /PRNewswire/ — Soup Kitchen International, the creators of the Zagat-rated soups of Al Yeganeh, the legendary soup man who inspired the “Soup Episode” on Seinfeld, and Cold Stone Creamery, the fastest-growing ice cream concept in the United States, today announced the grand opening of the first The Original SoupMan/Cold Stone Creamery at 2 Astor Place in New York, NY in early November. Recent Penn State graduate Daniel Petryszyn is opening the first hybrid, co-branded franchise that will feature both The Original SoupMan’s world-renowned soups and Cold Stone Creamery’s super-premium ice cream. Petryszyn’s Original SoupMan/Cold Stone Creamery, in addition to ice cream, will showcase Yeganeh’s 50 varieties of soup as the “centerpiece of the meal.” Each meal will be presented with a piece of fresh, crusty baguette, fresh fruit and a piece of imported chocolate — just like Al Yeganeh served it at his original shop. As Yeganeh explains it, this is simply “the way to eat.” Alongside Yeganeh’s 50 varieties of soup there will also be an extensive line of gourmet salads and sandwiches.
“Customers demand choice and innovation,” said Dan Beem, Cold Stone Creamery President. “We’re pleased and excited to explore these opportunities with the Original SoupMan to introduce both the highest quality, most creative ice cream experience alongside premium, gourmet soups, all under one roof.”
During Petryszyn’s grand opening ceremony, one customer will win a free cup of soup every day for the rest of his life while another customer will win a free cup of ice cream as part of the “Soup/Ice Cream for Life” drawing. In addition, the first 100 customers will receive a gift bag stuffed with free merchandise.
The Original SoupMan will also donate $1,500 on behalf of Yeganeh’s charity, “Al’s Feed the Hungry Foundation,” to “City Harvest,” the world’s first and New York City’s only food rescue program. Feed the Hungry Foundation donates funds to local hunger charities every time a new Original SoupMan location opens. The charity is headed up by Baseball Hall
of Fame legend, Reggie Jackson.
About The Original SoupMan
Founded in 1984, legendary soup man, Al Yeganeh, set the standard for
delicious, world-renowned soups at his New York City location, Soup Kitchen
International. Now, with the international growth of his franchise, The Original Soup Man, Al and his team will give the whole world the opportunity to experience soup as it was meant to be. The company also sells the Original SoupMan soups in Grab-n-Go packages in grocery stores nationwide. To learn more, visit http://www.ORIGINALSOUPMAN.com.
About Cold Stone Creamery
Cold Stone Creamery delivers the Ultimate Ice Cream Experience(R)
through a community of franchisees who are passionate about ice cream. The secret recipe for smooth and creamy ice cream is handcrafted fresh daily in each store, and then customized by combining a variety of mix-ins on a frozen granite stone. Headquartered in Scottsdale, Ariz., Cold Stone Creamery is part of the Kahala-Cold Stone holding company, a leading brand-building franchisor with a portfolio of 14 diversified brands. Cold
Stone Creamery alone operates more than 1,400 locations in the U.S., Puerto Rico, Guam, Japan, Korea, China, Taiwan and United Arab Emirates. For more information about Cold Stone Creamery, visit the company’s Web site at http://www.coldstonecreamery.com.
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10 opinions for Cold Stone Creamery Co-Brands With Soup Nazi
Cold Stone Creamery Co-Brands With Soup Nazi at PIGASYS
Oct 9, 2007 at 12:52 pm
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Joel Libava
Oct 9, 2007 at 6:45 pm
Friggin desperation at it’s best.
Joel Libava
The Franchise King Blog
Got Swindled and Lost Big
Oct 10, 2007 at 4:58 pm
Joel:
Well said. Soupman has caused many Operators to lose Hundreds of Thousands of $$ because of their deceptive tactics and misrepresentations.
I hope the Franchisor gets what they deserve!
michael webster
Oct 18, 2007 at 1:56 pm
Jeez, I want to see the UFOC on this “marriage”. Talk about dubious!
Got Swindled and Lost Big
Oct 19, 2007 at 5:07 am
Can’t say I am familiar with the UFOC from Kahala, but Soupman’s UFOC states an inaccurate Initial Investment….lowballed by a few hundred thousand $$, doesn’t identify all the locations that have closed due to Significant $$$ losses, doesn’t identify all the territories purchased but never opened because Franchisees won’t take the risk of losing big $$. All in all, it is a Swindle scheme…was from the start and the guys running the show have a similar story with another Chicken Franchise who was run to the ground and guess who bought it? Kahala!! Think there may be a connection?
sean
Oct 19, 2007 at 5:48 am
Got Swindled: Thanks for your comments. However, the more factual specifics, the less effectively these contentions can be disputed or spun… and better the situation can be understood.
What are the expense items that are understated in the UFOC that makes up the hundreds of thousands. Buildout? Working capital?
Also, if you (or anyone else) can provide a list of the locations that closed (preferably with the internal “store numbers”), we’ll post them to our “franchise graveyard” list. Approximate dates closed would be helpful, as would the store locations never opened. UFOCs often have an incomplete, dated, and/or a somehow obscured list of closures. Also, any details of resales sold at a loss. New openings, like the one in this post, are widely publicized; closures are rarely posted anywhere. The significant Cereality failures were only reported here and the Northwestern college newspaper. The failure of the much-hyped Cuts Fitness franchise program has only been posted here.
What was the chicken chain you referenced? Ranch *1? Wasn’t that bankrupt before Kahala bought it?
Kahala seems to buy up much-hyped but shaky concepts, perhaps with the idea of cobranding two or more to create a single viable unit. Interesting, if true. Is that the case? Is the departure of Doug Ducey a positive sign?
Insider’s insights appreciated.
Got Swindled and Lost Big
Oct 19, 2007 at 7:30 am
The # of territories purchased and never opened is huge. As an example, one Franchisee who closed down in Myrtle Beach purchased 17 territories in NC, SC and GA in total. Many others bought multiple territories and after failing big with the 1st, never opened the rest. Here is a list…perhaps there maybe more unopened, but these are for sure: Newark Airport, Holmdel, BWI Airport, Annapolis, Bethesda, Baltimore Harbor, Georgetown, Battery Park, Rockaway Town Center, Bridgewater Commons Mall, LaGuardia Airport, Willow Brook Mall, Garden State Plaza, 16 Locations in SC, NC and GA; Jersey City, NJ; Newport Center Mall, NJ; Boca Raton, Fl; Ft. Lauderdale, Fl; Stamford, Ct; Mayfair Mall, WI; Bay Shore Mall, WI; Fox River Mall, WI; 4 in Boston, MA; Union Station Wash DC; National Harbor, MD; University Town Center, MD; Pentagon City Mall (?); Englewood, NJ (?); Huntington, NY; 2 in Michigan; Downtown Pittsburgh; Westfield, NJ; 2 locations in Downtown Philadelphia; All of Canada. By the way, the Franchisor never reimbursed the Franchisees for the undeveloped territories even though per the Franchise Agreement, they are required to minus $5K. As for closings, can give locations but am unsure of the dates…keep in mind the stores were not open for more than 15 mos at the longest: Myrtle Beach; Camp Hill,Pa; Scranton, Pa;Lenox Ave, NY; Ottawa, Canada; 78th and Third Ave, NY; 45th and Third Ave, NY; 112th St, NY; Stratton, VT; 989 Third Ave, NY;44/45 St, NY; Flat Iron Mall, CO; Colorado Springs, CO. Another one is closing its doors this week. Can’t identify the location now as it would be unfair to Operator. There may be more closings, but the one’s listed are certain. All stores that were lucky enough to find a buyer, were sold at huge losses..as in 10 -20 cents to the $1. And, every store that has already closed was for sale but the concept is such a dog, no one with any brains would buy them. Ultimately the Operators could not carry them any longer and they had to close. Also, one of the largest investors of Soupman who also sits on the Bd of Directors, opened a store Downtown, NY in 1/2007 and immediately put it up for sale…still on the Market at a huge loss. That should tell you something. One of the Florida locations is a friend of the President of Soupman and they are selling also due to poor sales. There are several for Sale right now — more than 6. The UFOC disclosed the wrong initial investment costs (franchise fee plus build out including F,F & E) by Hundreds of Thousands $$, Franchisor Under reported COGS at 35% when they are approx. 49%. Never updated the document so that any prospective buyer would get a true picture of the network. Below is a paragraph that has appeared on a # of Blogs. Was certainly written by someone who has inside information at the Franchisor as they seem to know alot of internal information:
1. The issues with the franchisor are much deeper than it appears.
1. The company is undercapitalized. An investment bank retained to raise capital for the franchisor had discontinued its efforts after having received commitments for approximately 25% of the targeted capital. This was a result of the poor operating results of the company and its underlying franchisees.
2. The company has been seeking an acquiror of its operations. Throughout this effort the issues and challenges brought to the attention of the company by its franchisees have been quietly addressed but none of the problems have been resolved.
3. The misrepresentations made by the franchisor to induce franchisees to acquire territories and open up an Original Soupman outlet are many: (a) understatement of food costs; (b) co-branding with Cremalita ice cream to balance overall sales in warm months was abandoned soon after first 12 stores opened for business; (c) mandated use of cups and bowls that are 25% larger than purported serving portions, resulting in giving away 25% more product than consumer was paying for and at the same time causing an increase in purchases of product from the company to replenish inventory.
sean
Oct 19, 2007 at 12:31 pm
Got Swindled: Now that’s some detail… thanks!
sean
Dec 24, 2007 at 2:53 pm
This forwarded from Pigasys.com:
Janet, I read your comments and the Tallahassee Democrat article. (Thank you very much for bringing this to our attention. Prior to reading this, we were considering buying a Cold Stone franchise.)
If you have a Cold Stone franchisee claiming to have 2 of 3 stores that are earning more than $100,000 over the average unit volume for Cold Stone, yet he cannot turn a profit, that is extremely concerning. On its website, Cold Stone says that their average unit volume is $381,985. If that’s true, this guy was doing close to $500,000 in annual sales. That’s a lot of sales for an ice cream shop. Yet he was unable to make a profit. Are you kidding me? What does that say for all of the Cold Stones that are doing average sales?
Then there are the claims of the guy in Panama City. He says that his store has been profitable only 5 months in the 24 that he has been open. He cites progress in losing only $6,000 last month as opposed to $9,500 during the prior month. If my math is correct that’s $15,500 in two…count ‘em—two months. Obviously he has been open for two full summers—not to mention that both franchisees are operating stores in the warm weather climate of Florida, yet neither is able to eek out a profit. I feel badly for these franchisees because there is little doubt that the failure of these Cold Stone franchises is having a significant negative impact on their personal lives and their finances in particular.
This explains why there are so many Cold Stones on the market and many are selling at a deep discount (as low as $50,000 on bizbuysell.com) compared to the capital requirements that it takes to build a new store (about $400,000). It also explains why there are so many Cold Stones closing down across the country.
Cold Stone has serious problems because apparently this is going on with their franchisees across the country. In reading the Tallahassee Democrat article, it appears that Cold Stone is content to simply recycle these bad—unprofitable stores to the next unsuspecting investor. Not me!
Cold Stone Creamery Franchise Owners Caught Between a Cold Stone and a Hard Place
Apr 21, 2008 at 2:48 am
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