Ice Cream Park

History

The company was co-founded in 1988 by Susan and Donald Sutherland (unrelated to actor Donald Sutherland), who sought ice cream that was neither hard-packed nor soft-serve. Publicity materials describe it as "smooth and creamy super-premium ice cream." Cold Stone Creamery opened its first store that year in Tempe, Arizona. While the company was originally headquartered in Tempe, in 2005 headquarters were relocated to Scottsdale, Arizona. The original Cold Stone Creamery, location #0001 is still in operation today at 3330 S McClintock Drive in Tempe, Arizona.

The company's business model is the same as the created by Steve's Ice Cream's founder Steve Herrell. The company uses in-store made ice cream that is combined with mix-ins, candy or other items that is folded into the ice cream to make a new flavor. Cold Stone's name comes from the frozen granite stone, used to mix "mix-ins": candy, nuts, or other edibles into various flavors of ice creams. However, the granite stone technique used to mix "mix-ins" was created by Maggie Moo's Ice Cream, and its sister chain Marble Slab.

In 1995, Cold Stone Creamery opened its first franchise store in Tucson, soon followed by a store in Camarillo, California, its first out of state. Almost 1,400 franchises are in operation, although over 300 are currently available for sale. Cold Stone Creamery is now the sixth-best-selling brand of ice cream in the U.S. and now operates stores in Japan, Taiwan, South Korea, Puerto Rico, Indonesia, Guam, China, Mexico, Bahrain, Kuwait and Qatar . Cold Stone opened their first franchise in Europe in 2008 in Copenhagen, Denmark. Three more shops were later opened in other parts of the country. The company was also named the 11th fastest-growing franchise by Entrepreneur Magazine in January 2006. In June 2009 the company opened up its first location in Canada in the city of Mississauga, Ontario.

In May 2007, Cold Stone Creamery merged with Kahala Corp to form the company Kahala-Cold Stone, which collectively owns 13 brands. Doug Ducey, former president and CEO of Cold Stone Creamery, was named CEO of the new company. Kevin Blackwell, the former CEO of Kahala, became chairman of the board and chief strategist. In September 2007, Ducey announced he was leaving the company. Blackwell was named CEO.

In June 2008, a Wall Street Journal article, by Richard Gibson, examined the unusually high number of Cold Stone Creamery franchises closed or put up for sale by their owners, many of whom had suffered significant financial losses due to their investment. The article included claims by franchisees that the company had misrepresented the average revenues of Cold Stone stores and acted in ways that reduced stores' profit margins. A company spokeswoman said that the high number of stores for sale was "at par with industry expectations" in light of "the economically challenging times.

Partnership with Tim Hortons

The parent company of Cold Stone Creamery, Kahala Group, announced in February 2009 that it had reached an agreement with Canadian iconic coffee house Tim Hortons to open up to 100 co-branded stores in the United States after successfully testing two locations in Rhode Island . The strategic alliance will allow Tim Hortons to operate in more U.S locations, while allowing Cold Stone Creamery to expand into Canada. The most notable co-branded store will open in August 2009 when Tim Hortons will move into three Cold Stone Creamery locations in New York City, including its flagship Times Square location.

In June 2009, Cold Stone Creamery started testing the Canadian market by opening six co-branded locations with Tim Hortons located in Toronto, Oakville, Mississauga, Hamilton and Pickering.

Corporate culture
Cold Stone Creamery in Springboro, Ohio.

In the spirit of joviality, and to encourage customers to give tips, Cold Stone instructs employees to sing a Cold Stone song, usually to the tune of recognizable melodies such as "Take Me Out to the Ball Game", "The Star Spangled Banner", or "Bingo", when a customer places money in the tip jar. Lyrics include short, catchy phrases, such as, "This is our Cold Stone song, it is not very long".

Recently various Cold Stone franchisees of New York have partnered with The Original Soup Man to sell soup in their respective stores.

Products

All ice cream creations are offered in three sizes: "Like It" (5 oz), "Love It" (8 oz), and "Gotta Have It" (12 oz). There is also a kids' size (3 oz). All of its flavors are made in house using natural ingredients and bakes its waffle cones and bowls daily. The company also has a line of ice cream cakes and pies that are made off site.

Because ice cream is made from milk and cream, it has some naturally occurring trans-fats. The company does not add any extra trans-fats.

Controversy

Cold Stone has been criticized for its business model. The cost of running a shop is so steep that making a profit is often daunting for franchisees. Several factors account for this including: the average customer pays $4 for home-made super- premium ice cream, the company offering national two-for-one coupons, franchisees having to buy costly ingredients from a single supplier, and some franchisees have argued that the company's rapid expansion crowded stores too close together and brought in too many inexperienced franchisees.