Cold Stone Creamery Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Cold Stone Creamery is an ice-cream franchise where staff hand-mix premium ice cream with toppings on a frozen granite stone in front of customers. Franchisees run shops managing made-to-order service, staffing, and mall or street-front foot traffic.
FranchiseVerdict summary · 2026
A Cold Stone Creamery franchise requires a total initial investment of $391K – $681K, including a $12K – $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]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $391K – $681K
- 64th pct Service Resta…
- Avg gross sales
- $604K
- 5th pct Service Resta…
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 1,054
- 93rd pct Service Resta…
- SBA charge-off
- 31.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $391K – $681K including a $27K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $604K/year (median $574K).
- RISKVerdict C (Average), verdict score 40/100 (higher is better). 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, 2010–2025).
- TERMSNo protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Kahala Franchising, L.L.C.
- Parent company
- Kahala Brands, Inc.
- Ultimate parent
- MTY Food Group, Inc.
- Predecessor
- Cold Stone Creamery, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Eric Lefebvre
- Incorporated in
- AZ
- HQ
- 9311 E. Via De Ventura, Scottsdale, Arizona 85258
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $604.2M
- vs $597.5M prior year
Overview
About
- CEO
- Eric Lefebvre
- Headquarters
- AZ
- Founded
- 1994
- FDD year
- 2026
- States available
- 50
Can you afford it, and what does the money buy?
Entry cost runs 19% below the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $391K – $681K
- Middle of category vs category
- Liquid capital req'd
- $20K – $20K
- Top 40% of category vs category
- Franchise fee
- $12K – $27K
- Top 40% of category vs category
- Royalty
- 6.0%
- percentage · 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 |
| Technology fee | $75 |
| Transfer fee | $18K |
| Renewal fee | $0 |
| Inventory (initial) | $8K – $8K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 50% below the quick-service restaurants norm.
Source: FDD 2026 · Item 19
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
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Cold Stone Creamery unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
14%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
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
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Avg gross sales
- $604K
- Per unit, per year
- Median gross sales
- $574K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 978
- vs category median 20 · large
- Range (low → high)
- $333K→$965K
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 782 Quick-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $604K/year in gross sales. Revenue-to-investment ratio: 1.1x.
Fee burden
Total ongoing fee load of 9.0% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 10.5% CAGR over 3 years across 1,054 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Cold Stone Creamery Compares
Is the system healthy?
Source: FDD 2026 · Item 20
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 (3-yr)
- +10.5%
- Net unit change over 3 years
- 3-yr CAGR
- +10.5%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 63
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 2
- Transfers (3yr)
- 79
- Reacquired (3yr)
- 0
- Franchisor bought back
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
- Typical loan rate
- 7.5%
- avg rate to borrowers
- Franchised industry avg
- 31.2%
- brand beats franchise avg ↓
- Jobs supported
- 20,466
- 7.2 per loan
- Lender concentration
- 15%
- top lender's share
Borrower mix: 57% went to startups / new businesses, 43% to established operators
Franchise vs independent — in snack and nonalcoholic beverage bars, franchised businesses charge off at 31.2% vs 27.4% for independents — franchising is associated with 14% higher SBA default risk in this category.
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.
Top lenders financing Cold Stone Creamery franchisees
Showing 3 of 218 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
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.
What could kill this investment?
SBA loans charge off at 31.0% — 94% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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)
3 active suits filed by Kahala Franchising against franchisees during FY2025: breach of contract (2 cases) and trademark infringement/unfair competition/breach of contract (1 case). Multiple concluded cases involving affiliates and predecessors disclosed.
Largest disclosed settlement: $125,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
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 40 / 100 verdict
- 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
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| 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 |
| Transfer requires consent | Yes |
| Termination notice | 90 days |
| Mandatory arbitration | Yes |
| Arbitration location | County and state where Franchised Business is located |
| Jury trial waiver | Yes |
| Governing law | State where Franchised Business is located |
| Litigation count | 3 |
View Item 3 litigation summary
3 active suits filed by Kahala Franchising against franchisees during FY2025: breach of contract (2 cases) and trademark infringement/unfair competition/breach of contract (1 case). Multiple concluded cases involving affiliates and predecessors disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 80 hrs
- Training location
- Online, KTEC (Kahala Training & Education Center) in Scottsdale, AZ; In-Store training at Arizona training store
- Ongoing training
- Optional
- Time to open
- 8 mo
- From signing to launch
- Site selection
- Franchisee selects; Franchisor must approve
- Franchisor financing
- Offered
- Item 10
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 Item 19 in the Cold Stone Creamery FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Cold Stone Creamery FDD and qualifies whose outlets they describe.
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 verdict score of 40 out of 100 (higher is better), 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
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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.