Coldstone Creamery was suppose to be the Next Great Franchise. Instead its iced up and "100 of its stores closed last year."
Even as they rave about the quality of the ice cream, numerous franchisees say the numbers in Cold Stone's business model didn't add up. The cost of running one of the shops was so steep that making a profit was daunting, especially in an economy where a $4 scoop was a pricey indulgence, they argue. They also contend the company cut their margins even further by offering two-for-one coupons and making them buy costly ingredients from a single supplier. Some argue that the company's rapid expansion crowded stores too close together -- and brought in too many inexperienced franchisees.
This is news to me, as I always seemed see locations being rather popular and full with customers. However, as one former franchise owner points out, "The stores seemed busy all the time. You assume that 'busy' equates to profitability."
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