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The role of franchising in a contemporary world of business is of great significance due to an urge of people to move their business more intensively. In this respect the example of Cold Stone Creamery is grave enough. It is concerned with the idea of using outsourcing methods rather than in-home production. Outsourcing is popular today in the world. It is based on the points on making goods by means of a franchisee powers. Suchlike initiative is appropriate for its convenience. The parent company does not make great efforts, so that to promote its product line. On the other hand, the need for effective and productive cooperation becomes leading within a company’s subsidiaries.
Cold Stone Creamery begins its history in the year 1988 when Susan and Donald Sutherland founded a small company for ice-cream production (Cold Stone Creamery, 2008). Since that time the company expanded the field of its influence throughout the USA and in some little number of countries. It became known as the union with Kahala Group (Cold Stone Creamery, 2008).
For an applicant for Cold Stone franchising there should be several fundamental approaches. Most of them are concerned with the financial stability of a franchisee and his/her financial potential, on the whole. Outsourcing is a versatile framework of what and how should be done. In this respect an applicant should be aware of the corporate secrecy about the technological approach when producing Cold Stone ice-cream and other products relating to the brand. Thus, the preparation of an applicant starts with his/her personal concern as of the company’s activity and its strategic outlook on the further development of powers and impacts throughout current and potential areas of business relations.
Ehrlenspiel et al (2007) admits the idea of how outsourcing became so usable and popular within companies: “An essential basis for outsourcing was always to use the advantages of having a specialized supplier, with regard to costs, technology, and schedules” (187). Suchlike tendency is significant due to costs’ decrease in a perspective of further sharing of the company’s product line with franchisees. Here the vertical trend of relationships development is considered to be the main. The parent company influences on its subsidiaries, so that to have an idea about the process of production. Rabin (2005) outlines the following statement making more glimpses at the above mentioned model of production process, namely:
Organizing production through vertical integration means that firms are organized into a business unit. The implication from this is that measuring the performance of individual firms requires that a “transfer price” be established for goods and services exchanged (9).
The procedure of documents and all appropriate phases preparation and acceptance is not so long when an applicant is concerned about his/her business plan taking into account the internal policy of the corporation and its approach toward payrolls, taxation, banking procedures and ethical policies according to the practice of financing promoted in Cold Stone Corporation. One more touch should be presupposed, as Bulcke et al (2003) admit, with a two-factor dimension of interests as for ‘local versus offshore sourcing’, namely: location-specific factors LCFs and firm-specific factors FCFs. Thereupon, the Cold Stone Company seeks for better peculiarities of a franchisee’s location and its current positions for competition with the closest rivals of the company (Bulcke et al, 2003).
It is useful to know that Cold Stone Creamery was ranked in 2006 Number 11 in Entrepreneur Magazine’s Fastest Growing Franchises with the initial Franchise Fee being $42,000 with a total investment between $294,250 and $438, 850 (Cold Stone, 2008). For owning one’s own Cold Stone Creamery® franchise several requirements should be fulfilled. The bellow table (Cold Stone, 2008) provides a franchisee with the information according to the costs varied between the low and the high readings:
Apart from primordial data of fees described above there is also another ongoing board of fees regarding to the possible additional expenses and regulations with the various controlling organizations. Thus, a definite franchisee should take into account the seriousness of features concerned with the Cold Stone collaboration. Before becoming a franchisee one should point out a list of mandatory requirements to better understand the purpose of being Cold Stone’s franchisee. The above mentioned table should be helpful in outlining the advantages and limitations of a would-be project of a store and everything which can be supported with it. Moreover, the role of initial payments presupposes that after paying for every point in the agreement a franchisee should have an additional extra limit of financial sources. In this respect dealing with Cold Stone Creamery is an optimal decision while providing strategic evaluation about a future franchise.
Franchise Direct (2009) proves the idea of better conditions provided by Cold Stone Creamery in contrast with rivals in this sphere of business. Moreover, such initiative gives a varied field of rewards given by a franchisor. Thus, the company fairly suggests the policy of rewarding and restrictions for its franchisees. In other words, the violation of such principal points as, for example, Hours Violation, Non-participation, Relocation, Late Charge and others, is considered to have a negative development of relationships between the franchisor and a franchisee. The fair attitude of both sides is outlined with rewards which can be due to positive gains of a franchisee and for the performance above target. In this case an applicant should be aimed from the very beginning at a right direction in the business affairs evaluating, at the same time, probable and desired outcomes. In practice most of the franchisees are concerned about having suchlike relationships and try to make every possible attempt to improve the aspects related to product delivery from the head office, preparation by virtues of a special technology and catering of the customers, as a result. The more previously mentioned initiatives are supported, the more efficiency can be predicted in the long and in the short runs.
To conclude, the Cold Stone Creamery Corporation is one of the well-known franchisors in the United States providing people with tasty ice-cream in a great assortment along with smoothies, pies and other related products. Being a franchisor since the year 1994 Cold Stone Creamery gained a wide popularity both among customers and partners, franchisees. In this respect an applicant for franchise field of relationships with the Corporation should be aware of the list of fees and preferences which the company gives. Moreover, a franchisee should take into account ongoing fees and the principles of taxation with regard to the peculiar location. All in all, Cold Stone Creamery is a great opportunity to start one’s own franchise business and to become successful in it.
Bulcke, D. van den, Zhang, H., and Esteves, M. do C. (2003). European Union direct investment in China: characteristics, challenges and perspectives. London: Routledge.
Cold Stone Creamery. (2008).
Ehrlenspiel, K., Kiewert, A., Lindemann, U., and Hundal, M. S. (2007). Cost-efficient design. Berlin: Springer.
Franchise Direct. (2009).
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Rabin, J. (2005). Encyclopedia of public administration and public policy. Boca Raton, FL: CRC Press.