Cold Stone Creamery

Cold Stone charges a $27,000 franchise fee for a traditional location ($12,000 at renewal). The grand opening marketing fee adds another $10,000, bringing the initial outlay to $37,000 before you've signed a lease. Both are non-refundable.

The buildout is where the real investment lives. Leasehold improvements run $50,000 to $198,500, and equipment adds another $15,000 to $173,500 — a combined range of $65,000 to $372,000 before signage, inventory, or working capital. Total all-in investment is $336,000 to $655,000, with the midpoint around $495,000.

Cold Stone's ongoing fee structure is among the heaviest in the food franchise category relative to the average unit volumes involved. The royalty is 6% of gross sales, the national advertising fund takes 3%, and the local store marketing requirement adds 2% — totaling 11% of gross sales in fees and required marketing spend. For context, Subway is 8% royalty (though much higher volume potential), while Five Guys is 6% royalty with 2% creative fund. Cold Stone's 11% total burden on a median $587K store represents $64,600 per year in fees alone before you've paid any rent, labor, or food costs.

The $5,000 transfer fee and $5,000 renewal fee are typical for the category. The POS help desk support fee is variable but adds to your tech overhead.

Cold Stone discloses sales data for 939 of its 992 US franchised stores that operated for a full year through fiscal year 2024 (December 2023 through November 2024). The average was $621,052 and the median was $587,242. About 43% of stores met or exceeded the average.

The spread between performers is significant. The top 20% of stores averaged $992,237 in annual sales. The bottom 20% averaged just $342,089 — a location at the bottom tier is generating under $30,000 per month in revenue. After 11% in fees and required marketing alone ($37,600), plus food costs (typically 25–30% for ice cream), plus labor, plus rent, a $342K location is almost certainly losing money.

At the median $587K, running rough numbers: 11% fees = $64,600; food cost at 27% = $158,500; labor at 30% = $176,100; rent varies widely but $40K–$80K/year is common for inline retail. That leaves $108,000–$148,000 before debt service, utilities, and owner compensation. It's not impossible to run a profitable Cold Stone, but the median unit isn't a wealth-building business without favorable lease terms.

Cold Stone does not disclose net income or EBITDA, so the above is modeled, not reported.

Cold Stone's system grew from 912 units in 2022 to 994 in 2024 — a net gain of 82 units over three years, or about 28 per year. Openings have accelerated: 27 in 2022, 49 in 2023, 52 in 2024. Closures have been minimal: 5 in 2022, 5 in 2023, just 3 in 2024.

The closure rate is encouraging — at 3 closures against 52 openings in 2024, the ratio of new openings to closures is the healthiest it's been in years. Transfers (62 in 2024) represent about 6% of the system changing hands annually, which is moderate.

The system is not a high-growth brand — 994 units over 30+ years of franchising means this is a slow-build, community-anchored model. The stability is real, but the growth trajectory suggests this isn't an expanding footprint that creates scarcity value.

The 11% combined fee burden (6% royalty + 3% ad fund + 2% local marketing) is high relative to what Cold Stone locations typically generate. Franchisors often quote royalty rates in isolation; the total fee burden is the number that matters for your P&L.

The franchise fee is completely non-refundable under all circumstances — unusual compared to brands like Five Guys or Chick-fil-A that offer partial refund provisions.

Seasonal volatility in ice cream sales means your working capital needs to cover slow months (typically fall and winter in most markets). The $20,000 in three-month additional funds listed in Item 7 is likely understated for markets with real seasonality.

The parent company — Kahala Franchising — also operates multiple other brands including Blimpie and Cereality. Multi-brand franchisors can sometimes dilute focus and support quality. Assess regional support staffing before signing.