Cold Stone CreameryFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Cold Stone Creamery franchise requires a total initial investment of $391K – $681K, including a $27K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $604K[2]. SBA 7(a) loans show a 31.0% charge-off rate across 1,224 loans[1]. Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $391K – $681K
- 71st pct Service Resta…
- Avg gross sales
- $604K
- 14th pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 1,054
- 93rd pct Service Resta…
- SBA default
- 31.0%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
31.0% of SBA loans charged off across 1,224 loans, above the 16% franchise average.
Franchised units fell from 1052 to 952 over 3 years. Investigate why operators are leaving.
18 legal cases disclosed in the FDD. Read Item 3 before signing.
Large franchise systems benefit from brand recognition, supply chain leverage, and proven operations.
Bottom line
- Total investment $391K – $681K including a $27K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $604K/year (median $574K).
- Verdict C (Average) with a risk score of 68/100. SBA loan charge-off rate of 31.0% across 1224 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 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
- Legal entity
- Kahala Franchising, L.L.C.
- Parent company
- Kahala Brands, Inc.
- Incorporated in
- AZ
- HQ
- 9311 E. Via De Ventura, Scottsdale, Arizona 85258
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $597.5M
- vs $604.2M prior year
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.
- CEO
- Eric Lefebvre
- Headquarters
- AZ
- Founded
- 2008
- FDD year
- 2026
- States available
- 50
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $27K | $27K |
| Working capital (3–6 mo) | $20K | $20K |
| Equipment, build-out, other | $344K | $634K |
| Total initial investment | $391K | $681K |
Source: Cold Stone Creamery 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$79K
13.0% margin
Unlevered ROIC
14%
EBITDA / total invested capital
Payback
7.1 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $391K – $681K
- Below avg, review vs category
- Liquid capital req'd
- $20K – $20K
- Near category avg vs category
- Franchise fee
- $8K – $27K
- Better than avg vs category
- Royalty
- 6.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $18K |
| Renewal fee | $50 |
| Total fee load | 9.0% of rev |
Financial Performance
- Avg gross sales
- $604K
- Per unit, per year
- Median gross sales
- $574K
- Item 19 type
- gross_sales
- Sample size
- 978 units
- vs category median 28 · large
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Cold Stone Creamery Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,054
- Opened
- 63
- Last reporting year
- Closed
- 3
- Turnover rate
- 0.3%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +6.0%
- Net unit change last year
- 3-yr CAGR
- +10.5%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 79
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 32 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 1,224
- Loan volume
- $313.0M
- Median loan
- $250K
- 50th percentile
- Charge-off rate
- 31.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 69.0%
- 5-yr charge-off
- 3.1%
- Loans approved 2021+
- Active lenders
- 218
- Defaults
- 286
Vintage analysis
Cold Stone Creamery charge-off rate by loan vintage
Shaded area: recent vintages with few resolved loans; rates may change as loans mature.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Cold Stone Creamery's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 30-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 31.0% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
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.
Litigation (Item 3)
Two concluded litigation matters: (1) Purav Enterprises, L.L.C. et al. v. The Extreme Pita Franchising USA, Inc. et al. (Washington Superior Court, Case No. 15-2-15120-7) - settled March 11, 2016 for $20,000, dismissed March 16, 2016. Allegations included FIPA violations, misrepresentation of financial performance, and unregistered broker claims. (2) KOHO, Inc. v. Kahala Franchising, L.L.C. (California Superior Court, Case No. BC572565) - filed February 17, 2015. Kahala cross-complained. Court granted Kahala judgment on June 16, 2016, awarded Kahala $205,000 in attorneys' fees. Parties settled June 19, 2017 whereby Kahala repurchased Koho's Area Developer territory for $75,000 and forgave $130,000 in remaining damages.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 68 / 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
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Termination notice | 90 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Arizona |
| Litigation count | 18 |
View Item 3 litigation summary
Two concluded litigation matters: (1) Purav Enterprises, L.L.C. et al. v. The Extreme Pita Franchising USA, Inc. et al. (Washington Superior Court, Case No. 15-2-15120-7) - settled March 11, 2016 for $20,000, dismissed March 16, 2016. Allegations included FIPA violations, misrepresentation of financial performance, and unregistered broker claims. (2) KOHO, Inc. v. Kahala Franchising, L.L.C. (California Superior Court, Case No. BC572565) - filed February 17, 2015. Kahala cross-complained. Court granted Kahala judgment on June 16, 2016, awarded Kahala $205,000 in attorneys' fees. Parties settled June 19, 2017 whereby Kahala repurchased Koho's Area Developer territory for $75,000 and forgave $130,000 in remaining damages.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 80 hrs
- Training location
- On-site at Restaurant
- Time to open
- 9 mo
- From signing to launch
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
104 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Cold Stone Creamery · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Cold Stone Creamery franchise?
The total investment to open a Cold Stone Creamery franchise ranges from $391K – $681K, with an initial franchise fee of $27K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Cold Stone Creamery franchise owners earn?
According to Item 19 of the Cold Stone Creamery FDD, the average gross sales per unit is $604K. The median is $574K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Cold Stone Creamery's franchise failure rate?
Based on SBA 7(a) loan data, Cold Stone Creamery has a charge-off rate of 31.0% across 1,224 loans, meaning 31.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Cold Stone Creamery franchise locations are there?
As of their most recent FDD filing, Cold Stone Creamery has 1,054 total units in the United States, including 1,052 franchised units and 2 company-owned units. 63 new units were opened in the latest reporting year.
Is Cold Stone Creamery a good franchise to buy?
FranchiseVerdict rates Cold Stone Creamery as a C-grade franchise with a risk score of 68 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Cold Stone Creamery, you can request corrections or provide updated information.
Claim this brandOther Quick-Service Restaurants franchises
Compare similar franchise opportunities in the Quick-Service Restaurants category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.