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'Cool' Franchises Are Hot!
By Pamela Gold
As summer kicks into full-gear and the sun heats up, millions of people flock to their nearest warm-weather treatery for the best super-premium ice cream, frozen custard, and smoothies. In fact, in the streets of cities and towns across the U.S. today, people can be found enjoying their favorite frozen dessert: Recent trends show that consumers are once again eating delicious, full-fat foods, from steak to ice cream. Sales from low-fat ice cream are dropping and super-premium ice cream sales are sky-rocketing. Additionally, as the economy has been on the downfall, dining out is being replaced with affordable, gourmet treats. From coffee to ice cream, the market for gourmet snacks is booming at an incredible pace.
Not Just Old-Fashioned Ice Cream Anymore
Smoothies that include the newest supplements. Frozen custard, a richer, super-premium sibling of traditional ice cream, which includes the addition of eggs in its recipe. Super-fresh ice cream which is hand-mixed on a frozen stone with custom add-ons. The cool dessert industry is about being different and always about being delicious.
"The ice cream segment is booming. It's unbelievable to see all the new brands that are doing so well," stated Bob Ritter, Vice President of Franchising at Ritter's Frozen Custard.
Ritter continued, "This is a fun business to be in. 99% of the people that you deal with are in a good mood. They're treating themselves, so if they're not in a good mood when they come into the store, they probably will be when they leave!"
Even in economically hard times, people want to treat themselves. "History has shown us that even at times of depression, people don't go on big vacations but they'll still treat themselves on a smaller level, if possible. Today, instead of eating out, people might eat dinner at home and then treat themselves and their family to ice cream or frozen custard," explained Ritter. Indulging in small luxuries, American's are consuming lots of coffee and frozen dessert products and these industries are booming.
As frozen desserts gain popularity, competition can be great for business. As more shops are opened across the country, both the industry and the desire for frozen products only gets greater. Ritter commented, "Ten years ago, it was only Ritter's and Culver's in the frozen custard segment of the market. Today, frozen custard brands are popping up all over the country. I think it's wonderful because there is now an awareness of what frozen custard is and a growing popularity and desire for it. It's great for all of us involved in the industry."
Super-Fresh Has Meant Super-Success
One example of a company that has gained a great abundance of success in a competitive market is Cold Stone Creamery. Currently located in 39 states, including Alaska, Hawaii, and the Caribbean and with 300 new stores slated to open in 2003 and another 450 in 2004, Cold Stone Creamery is the fastest growing ice cream concept in the country. Their product is an ultra-fresh, super-premium ice cream that is made daily in each store and served smooth and creamy in a homemade waffle cone or bowl. Consumers choose additional ingredients and those ingredients are mixed into the ice cream on a frozen granite stone.
There has been a surge in entrepreneurs who understand the Cold Stone vision and desire to own their own store. This month alone, 38 new Cold Stone Creamery stores will open. In 2001, annual sales exceeded $45,000,000. In 2002, that number grew to over $88,000,000. This year, sales are expected to be at an all-time high of $180,000,000. Prospective franchisee applications are currently up 204 percent from last year.
"Our continued success can be attributed to the demand for not only our fresh made ice cream, but also the demand for the superior small business opportunity and franchise support system we've established," explained Kevin Donnellan, Communications Manager at Cold Stone Creamery.
Year-Round Sales In Any Climate
As you decide on what industry you'd like to buy a business in, you might be thinking ice cream is only profitable in the summer. Think again! Brenda Bigalke and her husband are Area Developers for Cold Stone Creamery in the most unlikely of places; Alaska. Most people think cold and ice cream don't mix, but Alaska has the #1 per capita consumption of ice cream in the United States. If you think ice cream won't sell in colder climates or in the winter in your region of the country, you're in for a big surprise!
"Cold Stone Creamery certainly had no plans to develop in Alaska back in 1996 when my dad gave us the idea of opening a store there. He lived in Arizona in the winter and Alaska in the summer, and introduced my husband and myself to the concept when we were visiting him in Arizona. He got the paperwork and as an incredible businessman himself, he was able to convince the company to give us a chance in Alaska," explained Bigalke.
Is it difficult introducing a brand to a new region of the country? It certainly helps to get some positive publicity: "We've been blessed with incredible publicity. We've had spots in Entrepreneur Magazine and on The Food Network. Newspapers have covered us almost from the start, and as soon as The Anchorage Daily News covered the opening of the store and people learned about us, we had lines to our first store wrapping through the mall we are located in! Most stores can do one run of ice cream a day, but almost from the beginning we were doing two runs in our Anchorage store," said Bigalke.
With the right selling strategies, even the coldest months can produce positive sales. Sometimes supplemental sales are necessary to keep profits on track throughout the year as Bigalke explained, "In a place like Fairbanks, where we have the highest temperature differentials in the world, it can be minus 60 degrees in winter and over 100 degrees in summer. This makes year-round sales a challenge. We do have the most lop-sided sales in the company, but our stores supplement winter sales with our cake and pie program. We have the #1 sales of cakes and pies in the whole country, and our stores are profitable all year round."
Many Cool Options
Cool indulgences are more popular than ever. Families, singles, the young, and the old all love ice cream, frozen custard, and smoothies. It makes us feel good and happy; "After 9/11, our sales spiked. Ice cream is a comfort food. It makes people feel better and happier, even during difficult times. We offer people a premium product that isn't expensive. It's not like buying a luxury car, so we have people that come in every day and enjoy a 10-minute vacation," commented Cold Stone Creamery Area Developer for Alaska, Brenda Bigalke.
Now is a great time to look into buying a cool franchise opportunity! With more brands and more products than ever before, you should start your search by deciding which opportunity is most appealing to your business goals and your taste buds.
