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Coldstone Creamery, 101 Sparkleberry Crossing Suite 5 (Clemson Road at Sparkleberry Lane): 2007(?)   10 comments

Posted at 4:32 pm in historic,restaurants

I believe I stopped at this Coldstone twice, having ice cream once, and a milkshake once. Both times, it seemed to me that they were doing a good business. I noticed the other day, however, when I was taking pictures of the nearby former Za's location that they are now closed. I've put down 2007 for the closing date since they aren't listed in the 2008 Bellsouth phonebook, but it could have been 2006 I suppose.

When both Bruster's and Coldstone closed in Forest Acres, my thinking was that Bruster's had a bad location and business model, but I was puzzled by Coldstone, which seemingly had a good spot by Starbucks in a high foot-traffic area of Trenholm Plaza. Seeing the Clemson Road Coldstone closed got me thinking there might be something up with the chain itself, and lo-and-behold, I ran across an interesting Wall Street Journal article to exactly that effect last night. It seems that Coldstone franchisees must pay back to corporate on gross sales, and that they have to use suppliers with very high markups:

Even as they rave about the quality of the ice cream, numerous franchisees say the numbers in Cold Stone's business model didn't add up. The cost of running one of the shops was so steep that making a profit was daunting, especially in an economy where a $4 scoop was a pricey indulgence, they argue. They also contend the company cut their margins even further by offering two-for-one coupons and making them buy costly ingredients from a single supplier. Some argue that the company's rapid expansion crowded stores too close together -- and brought in too many inexperienced franchisees.

To quote from an even more interesting followup comment by a disgruntled Coldstone franchisee:

Another issue is Cold Stone’s agreements to receive kickbacks from the companies that it requires franchisees to use. This is over and above the 9% that they charge franchisees based on gross sales. These agreements drive up food costs for franchisees and forces them out of business. As an example, I recently purchased 24-24oz. Pepsi bottles from Sam’s Club for $14.21. Yet as a franchisee, I was required to buy 20oz. bottles directly from the distributor. I believe I was paying $21.65 for 20-20oz bottles of the very same product. Therefore I was paying more than $7 more for product from the distributor and receiving 96 less ounces. Shouldn’t a franchisor negotiating on behalf of nearly 1,400 franchisees be able to negotiate a better price than I can get walking into my local wholesaler?

There are some very sad stories at the second link. I do get snarky on this blog, but every failed store was someone's dream.

UPDATE 21 April 2010: Added full street address to post title.

UPDATE 28 April 2010 -- It's now a Subway:

Written by ted on June 19th, 2008

Tagged with , , , ,

10 Responses to 'Coldstone Creamery, 101 Sparkleberry Crossing Suite 5 (Clemson Road at Sparkleberry Lane): 2007(?)'

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  1. Here in Chicago we've seen more than one Coldstone close in our area, but others-notably the ones in the tourist areas and downtown-seem to have good traffic.

    Dont care for it much-overpriced and if you get an indifferent waitperson, you arent going to get a well mixed product.

    I do like Togo's: Baskin Robbins/Dunkin Donuts/sandwich shop combo-have seen it here and the Bay Area in California. They do an blockbuster business near me-too bad they also run out of such basics as icecream cones (really!) from time to time. Needs a little management tweaking there.

    At Sandhills, I love the 5 Guys hamburger place. Terrific!

    Anna

    24 Jun 08 at 1:58 am

  2. Whatever happened to Hops up on Two Notch Road? It opened and closed before I had a chance to check it out on one of my visits to Columbia. It was a favorite of mine in Denver but it started going downhill a few years ago, inspite of HUGE popularity. Not sure it's still there.
    How can a restaurant be jammed night after night and fail?

    Anna

    24 Jun 08 at 2:01 am

  3. Five Guys is quite good. Better here than in their home turf (DC) as a matter of fact. There's also one on Senate Street, one in Lexington, and one will be where the Forest Lake Exxon was.

    The whole chain of "Hops" went under. A bad chain can drag down even its most successful locations. A new company bught it (and Don Pablo's) and is still running restaurants in some areas, but the Columbia locations were all downsized.

    ted

    24 Jun 08 at 2:29 am

  4. I am professor at Baruch College in New York and am writing a book about people over 50 who buy businesses. I would like to speak with someone who bought a franchise when they were over 50 and it didn't work out to their expectations. Please contact me at edward.rogoff@baruch.cuny.edu

    Ed Rogoff

    20 Dec 08 at 4:52 pm

  5. FWIW, the Coldstone in Summerville at Azalea Square recently closed.

    Lou B

    15 Oct 09 at 7:23 pm

  6. Ted, one of the problems with all of those businesses in that Sparkleberry Sliver is the exorbitant rents they are having to pay. It has contributed in some way to all of the closed establishments there (I was told this by someone who works commercial real estate in the NE.) The same is also going on out at Sandhills.

    doc

    30 Oct 09 at 7:28 pm

  7. Ted, you've got a spam entry here dating from May 2010. Might want to delete it.

    Bobby P.

    17 Sep 11 at 3:53 pm

  8. Gone.. there's no end to the things!

    ted

    17 Sep 11 at 4:44 pm

  9. thank you for share!

  10. nice articles

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