When potential investors begin scoping out Cold Stone Creamery® to determine the viability of owning a franchise, they’re often struck by the incredible rate of return a franchise can offer. Given that the brand only sells super premium ice cream, it’s only natural to wonder, “Just how much is Cold Stone® ice cream, anyway?”
The answer may surprise you. Given how much a franchisee can potentially earn with just one location and very low overhead, you may think the price exorbitant. But with most offerings coming in at less than $5, Cold Stone offers great bang for the buck for the investor and consumer alike.
So how does Cold Stone manage to stay so successful despite offering essentially a single, low-priced item? The secret lies in their ability to help franchisees offer an in-demand item to customers at a very low cost to themselves.
First, you need to understand that the profit margin is comparably high compared to other franchise opportunities, due to the low overhead franchisees encounter. The fact is, running a Cold Stone franchise isn’t that expensive compared to other franchises, and the savings are passed on to the consumer.
Think about what your average fast food burger joint needs. You have to have ingredients on hand to make the dozens of items on the menu, you need a lot of different (and expensive) machinery, and you have to have a small army of employees working at all times – and that’s not even factoring in the cost of the space to house all of this.
With a Cold Stone franchise, you’re paying for a lot less. You only have to make a few items, which immediately slashes your equipment costs. You only need 10-15 employees total (as opposed to per shift like at a burger restaurant). Your lease is also significantly lower, since you won’t need the same amount of space.
Now that we’ve established why the profit margin can be so high, we can direct our attention to the other side of the equation: sales volume.
When Cold Stone first came on the scene, many skeptics felt premium ice cream would be a short-lived fad. However, the market has proven to be evergreen, as demand doesn’t dip appreciably during the winter, as many predicted.
Instead, what you’re likely to see is consistent traffic at each Cold Stone® location. Customers are willing – or even eager – to pay a slightly higher price if the value and quality is there.
With the wide variety of mix-ins and custom Creations® each customer can enjoy, the Cold Stone experience is definitely worth paying for. Not only that, but it makes conventional ice cream pale in comparison, meaning your customers keep coming back again and again.
When you break down the numbers on the Cold Stone craze, it becomes easy to see why so many investors are trying to cash in with their own franchise. It’s rare to find a low-cost, premium product that customers will demand over other options, but Cold Stone offers just that.
So, the next time you hear someone say, “How much is Cold Stone® ice cream?” you can simply reply, “Just enough.”