Cold Stone Creamery
Bottom line
- Total investment $391K – $681K including a $27K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $604K/year (median $574K).
- Rated STRONG with a risk score of 51/100. SBA loan default rate of 0.0% across 1405 loans (below the industry average).
- 18 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Cold Stone Creamery unit return on the cash you put in?
Unlevered ROIC · per unit
14%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Cold Stone Creamery units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$725K
on $3.6M purchase
Total debt
$2.9M
SBA $1.8M + senior + seller note
Overview
About
Cold Stone Creamery franchisees operate ice cream retail shops where customers watch employees hand-mix premium ice cream with mix-ins on a frozen granite stone. Day-to-day operations involve inventory management, employee scheduling and training, point-of-sale transactions, food safety compliance, and marketing to drive foot traffic in a market increasingly dominated by delivery apps and alternative dessert concepts.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 31 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Cold Stone presents caution-level risk due to unprotected territory, historical litigation involving fraud allegations, lack of profitability disclosure, and weak unit growth suggesting a maturing system under financial pressure.
Score breakdown · what drove the 51 / 100 rating
- 01MEDNo Item 19 (average unit volume) disclosed - unable to verify if $604k avg revenue translates to profitability
- 02MINORUnprotected territory creates direct competition risk from other Cold Stone locations and cannibalization
- 03HIGHLitigation history shows pattern of franchisor-franchisee disputes including fraud/misrepresentation claims and territory buybacks
- 04MINORSlow unit growth (6.0% YoY) on declining base of 1,054 units suggests mature/saturated market with franchisee struggles
- 05MINORHigh initial investment ($390k-$681k) combined with 6% royalty + $10/week surcharge creates thin margin vulnerability
- 06HIGHGoing concern status is False, indicating potential financial stability concerns at franchisor level
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Cold Stone Creamery · FDD (2026) PDF