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The Inside Scoop

What's it really like to buy a franchise? One entrepreneur dishes up all the details of her journey to open a Cold Stone Creamery.
January 1, 2005
URL: http://www.entrepreneur.com/article/74996

So you want to buy a franchise. Coming to that decision takes more than moxie-it takes a plan and a list of questions you ask yourself to see if you're ready. What industry would you like to be in? What franchise should you buy? Which franchisor best fits your needs? What can you afford? Will consumers in your community buy the product? How do you train a crew?

There are serious issues to consider on the road to opening the doors to your franchise. Gina Frerich, a former fashion buyer, embarked on her franchising journey knowing only that she wanted to be in business for herself and that a franchise was a good way to do that. From choosing the right concept to opening the doors, here's her story. Watch, listen and learn-and if you're of a mind to, have a scoop of ice cream.

Spring and Summer 2002: Choosing Franchising

As a buyer in the fashion industry, Frerich, now 32, was a perfectionist. "I was putting in a lot of extra hours and weekends," she says. "[I realized] if I was going to work that hard, [I wanted] to benefit my own bottom line." The only hitch was that she wasn't sure how to start her own business from scratch. Frerich knew she'd have to bring a lot of experience to the table of any business she started-and since she didn't especially want to do something in the fashion industry, she sought another avenue.

Franchising entered her mind as a great way to be an entrepreneur and to have some helpful guidelines at the same time. "They already have the proven product, they do marketing, and, in some franchise situations, they provide a lot of training and support."

Frerich took about a year to research franchising concepts in her New Jersey area. "My husband and I always tossed around ideas when we walked into a particular concept we thought was interesting." Through both online and offline research, she narrowed it down to ice cream. Cold Stone Creamery stuck out to her, but since there were no Cold Stone franchises in her area, it wasn't until a trip to San Diego to visit family that she was able to see an actual store and taste the ice cream she'd read about. "Once I had the product, it kind of made the decision for us," says Frerich. "I called my husband and said, 'You know that Cold Stone [concept] we were looking at? I just had it, and it's amazing super-premium ice cream.' It was so good."

Signing the Franchise Agreement

August 2003: Signing the Franchise Agreement

Besides loving the Cold Stone product, Frerich found the people at the corporate office (which Frerich generally refers to as "The Creamery") to be helpful and enthusiastic about the product and the franchise opportu-nity as a whole. According to Frerich, when she was in the thick of her due diligence that summer, she found out Cold Stone was opening a flagship store in New York City's Times Square. Believing this development would greatly raise awareness of the concept in the Northeast, thereby increasing the chance of success if she jumped onboard at that time, she made her decision. Frerich recalls what a positive experience it was working with the franchisor during her research as well as after signing on. "The Creamery is very selective in whom they award franchises to, so there was a bit of a process there even once we decided on Cold Stone," she says. "They had to make sure it was the right fit."

Once Frerich had her stamp of approval from the franchisor, she signed her franchise agreement and was off to choose a location, sort out leasing agreements, and hire a contractor to build out her shop. The franchisor was key in finding her Westfield, New Jersey, location, assisting Frerich in the whole process. Working with contractors was another new experience that she had to master in the busy nine months between signing the franchise agreement and opening the doors. "Every day was a learning experience," she says. "The nice thing about it was [that] there was always someone at The Creamery to support me and help me through it."

January 2004: Attending Ice Cream University

It was one thing to taste the ice cream in San Diego, but Frerich was in a whole new world when she attended the one-two punch of the Cold Stone annual franchisee convention in Las Vegas, followed by two weeks at Ice Cream University in Scottsdale, Arizona. "It was one of the greatest experiences throughout this new adventure with Cold Stone," Frerich says.

After a week spent soaking up the wisdom of veteran franchisees in Las Vegas, Frerich immersed herself completely in the Cold Stone way of life for the two-week course. "It was great talking to people in Las Vegas, jotting down ideas and sharing my challenges with my fellow franchisees-[in-training]." Her days were filled with hands-on training, serving customers in a real store, and classroom instruction-while she spent her evenings studying for the final exam at the end of the course. After finishing with the highest exam score and being named the Scoopa Cum Laude, Frerich left the place bubbling with enthusiasm and with the camaraderie of her fellow franchisees-in-training. "I was fired up," recalls Frerich. "I wanted to jump right in."

Spring 2004: The Final Stretch

It was crunch time for Frerich-the spring saw her building out her store, setting up equipment, hiring a staff, and trying to do it all while not pulling her hair out. "I was coming down to the store to see what progress was being made, bringing coffee and doughnuts to stay on the good side of the contractors," she says. "But there was a point where [I thought] 'I'm this 5-foot 2-inch female coming to a construction site where I have to let them know they're working for me, and that I have expectations and have to challenge [the contractors] if they aren't being met."

Not only was she learning how to manage contractors, Frerich was also getting her building and business permits in order, another element she was learning as she went. "I was hiring a crew [then, too], so not only did I have a building, but I also had personalities and energy to fill that building." Hiring and training her staff was one of the biggest challenges prior to the grand opening, she says. Fortunately, having had hands-on training at Cold Stone's Ice Cream University, Frerich had experience to draw on when training her crew during the roughly five days she had with them before the grand opening. "I was very proud of my crew because it is a lot to learn-and they did a great job. As soon as the customers started to come in, they knew what had to be done," she says. And if they didn't, Frerich was right there beside them to work it out together. "That was the biggest thing. They knew I wasn't asking them to do anything I, myself, wouldn't be willing to do."

ONE STEP AT A TIME

Michael H. Seid offers aspiring entrepreneurs advice for each stage of the franchising process:

  • CHOOSING FRANCHISING: Your entire life will change. Make sure that you like the business and would be proud to own that type of business-and that your family supports you. Finally, says Seid, "Be certain your economic expectations are realistic."
  • SIGNING THE FRANCHISE AGREEMENT: Get a lawyer who specializes in franchising as your advisor. Read the franchise agreement from front to back-note the boilerplate, which will be important in the event of a dispute. Says Seid, "Be prepared to walk away from the franchise if the agreement does not meet your needs or reflect the salesperson's promises."
  • TRAINING AND DEVELOPMENT: "Don't be passive during training. Ask questions," says Seid. "You are paying for information that enables you to open, manage and operate the franchise. If you don't fully understand anything, ask the franchisor if you can extend your training."
  • THE FINAL STRETCH: Find time to relax a bit, as it will probably be a long while until your next free day. "While it may seem like an inopportune time, [a break] will release some of the built-up stress, allow you to focus on the future, and feel good about yourself and what you will be accomplishing," says Seid.
  • GRAND OPENING: Disasters always happen, so during development, make friends within your local franchise community. "The joy of a great franchise system is that the other franchisees are not just neighbors, they're family, and they will usually do whatever it takes for you to succeed. That includes loaning you replacements for the three staff that did not show up. Rely on the franchise system, not just the franchisor."
  • THE NEXT STEP: Get all the information you can from the franchisor, your lender and other multiunit franchisees before you make your decision to grow. "Running two locations is no harder than running one location. Running three locations is harder than running 50. Ask anyone who has been through the growth cycle about the pain of growing from two to three," says Seid. Get a business advisor, franchise consultant or franchise lawyer, and make sure you have a management team in place that can help you grow.

Michael H. Seid is managing director of Michael H. Seid & Associates, a West Hartford, Connecticut-based management consulting firm specializing in the franchise industry.

 

Grand Opening and Beyond

May 14, 2004: The Grand Opening

In her drive to have a truly profitable grand opening, Frerich had done a lot of local marketing beforehand to get the word out about her new premium ice cream store that was going to sweeten the neighborhood. As a result, customers were lined up waiting for their first taste of Cold Stone Creamery. "To see the smiles on their faces as they experienced the ice cream I had experienced in San Diego over a year [earlier], and to see them have the same reaction that I did-it reminded me of why I did it all," says Frerich. "It made it all worthwhile."

Even with the air of excitement on opening day, the event wasn't without its problems. At the last minute, the walk-in freezer stopped working-it went into defrost mode and didn't come back out. With lots of ice cream already prepared, Frerich did not want to lose all that product-and profit-on her grand-opening weekend. Thankfully, she was able to call her area development team for advice on what to do. "So we worked through it, and as crazy as it made me, looking back, we had a great grand opening-it almost exceeded my expectations," she says. "You don't know what's going to happen-and things are definitely going to go wrong-but it's how you choose to react to them that can be the difference between a great day and one you don't care to reflect on."

Early 2005 and Beyond: Back For Another Scoop

Her first store has been so successful that Frerich has plans to open two more Cold Stone franchises in 2005. She hopes the Madison and Summit, New Jersey, stores emulate the success of her first store, which has already exceeded Cold Stone's average unit volume of $375,000 annually. Clearly not at the end of her Cold Stone journey, Frerich is embarking on an even bigger adventure in adding new stores to the mix. "Whatever happened that challenged and stressed me out in store number one can only help me [in preparing] to open my second and third stores," she says.

Profitable, yes. Fun, yes. Stressful, absolutely, but from Gina Frerich's perspective, franchising was the right way to go. She reveled in the training, got serious about the building, inspired her crew to greatness, and turned what could have been an opening-day disaster into a rousing success. Her advice to other potential franchisees of any concept? "You have to get in there and dig in. Be passionate about it, learning everything you can every step of the way," she says. "Don't settle for anything other than being the best, because it's that drive and determination that keeps you going when you're looking at yourself in the mirror wondering why you even got into this in the first place."