Battle of the Brands: Cold Stone Creamery vs. Dairy Queen

This is one of those apples and oranges sort of things. DQ is nothing like Cold Stone. We no longer have a DQ here. They made it into a Starbuck's! DQ is the place to stop by for a cone. We go to Cold Stone for special occasions (or when someone gives me a gift certificate).

Really. Have you every comparison shopped. I can't get a blizzard for $4.75 and the same size at Cold Stone for around the same price.

A dilly bar is up to $2.75, that's the cheapest I have found.

Want change back. pick up a gallon of blue bunny and a box of comes.

I can't believe they are saying DQ is premium ice cream. It's not even close. DQ and some other whipped ice cream place like McDonalds, Carvel's need to be compared.

Price is moot. What I find funny is that DQ is copying everything Cold Stone does. They made blizzard cakes, waffle cones. Come on, who's trying to be something they aren't?

From a taste standpoint, I think Cold Stone wins. But in my opinion, from an investment standpoint, Cold Stone is a DISASTER!!!

They have very good ice cream, but that does not necessarily compute to a good return on investment. If I had a penny to invest in a franchise, Cold Stone would be very last on my list.

I am an Ex-Cold Stone Creamery franchisee. I am currently suing the company in federal court for among other things: (1) fraud in the inducement (i.e. for selling to potential franchisees based on statements such as "profit by making people happy" and "Cold Stone's franchise opportunities are about as solid as they come"); and (2) Cold Stone effectively charges more than the 9% enumerated in their franchise agreement because they negotiate and receive "kickbacks" from the very vendors that they require franchisees to use. Those "kickbacks" drive up food cost for its franchisees and makes many of them unprofitable. This is apparent by the large number of stores that are closing down throughout the nation.

Cold Stone has known for years that its franchisees have had serious profitability issues, yet they go out and negotiate deals that make their franchisees even more unprofitable. In my view, there is something inherently wrong with a company that negotiates deals with vendors that increase the cost to their franchisees. Those deals effectively pad the company's own profits at the expense of its franchisees who suffer life altering financial failures and many are filing bankruptcy at an alarming rate. In my opinion, that is completely contrary to their core value to supposedly "do the right thing". Cold Stone's lack of care and concern for their franchisee's well being is inexplicably disingenuous in my view.

On its website, Cold Stone Creamery boasts its average store generates $381,985 in annual sales. We had three stores and they were performing well above the national average. Two of our stores did $500,000 each in annual sales, which is more than $100,000 above the company's national average. We operated a store near a large college campus that was among the top Cold Stones in the entire nation. With $1.4 million in sales between the three stores--Cold Stone Creamery repeatedly recognized us as outstanding performers among stores throughout the nation and within our region. Even with such a large sales volume, we still could not earn a profit. This from a company that promised us 20% profits.

There are Cold Stone Creamery franchisees who are pumping several thousands into their stores each month just to cover their losses. One franchisee told me, after investing $300,000 to open his store, he is losing $4,000 to $7,000 per month. A franchisee in Florida recently told me that he lost nearly $132,000 in just one store during 2007. That's alarming.

We are also suing Cold Stone for scuttling a sale to a potential buyer. According to this comment (http://www.bluemaumau.org/recovering_cold_stone_creamery_franchisee) we are not alone in that complaint.

I haven't had a whole lot of history with Kahala because they only recently merged with Cold Stone. However, if Cold Stone is their flagship brand, in my opinion, you have to wonder about the genius of Kevin Blackwell (Chairman & CEO of Kahala Corp) and this merger. This I do know, Cold Stone has been an absolute nightmare of an investment for many of its franchisees--myself included.

Cecil Rolle
Tallahassee, FL
cecilrolle@aol.com