THERE IS A SUBSTANTIAL RISK OF FAILURE ASSOCIATED WITH MTY FRANCHISES. MTY AVERAGED AN 11% CLOSURE RATE IN FIVE YEARS WHILE CHARGING FRANCHISEES $239 MILLION IN KICKBACKS ON TOP OF REGULAR FEES. THEY CLOSED 2,594 LOCATIONS FROM 2016 THROUGH Q2, 2021. KICKBACKS CAUSE FRANCHISES TO COLLAPSE!
MTY’S BOARD MADE FALSE STATEMENTS TO INVESTORS WHILE ENGAGING IN A COVER-UP TO CONCEAL FALSE DATA REPORTING THAT THAT OBSCURED THAT MTY’S FRANCHISE NETWORK IS COLLAPSING. ITS CHAIRMAN, STANLEY MA, SOLD $43 MILLION OF OVERPRICED STOCK WHILE INVESTORS WERE IN THE DARK—POTENTIALLY COMMITTING INSIDER TRADING. THIS WAS A PART OF AN ELABORATE SCHEME THAT INCREASED MA’S WEALTH BY $214M DURING THE PANDEMIC ALONE. MTY THEN INCREASED KICKBACKS BY $5.3M ON FRANCHISEES AND AUTHORIZED $3M IN ANNUAL DIVIDENDS TO STANLEY MA.
MTY/Cold Stone Franchise 500 Ranking
Updated February 27, 2022
Entrepreneur.com is widely regarded as the premiere resource for potential franchise investors. The website also publishes the Franchise 500—a ranking of franchises based on various data inputs provided by the franchise company. The ranking is influential in many potential franchise investors’ decision-making; therefore, franchisors covet the honor of being listed.
According to an overview of the Franchise 500 methodology, size and growth are top priorities in selecting and ranking the companies. In its 2020 reporting to Entrepreneur.com, MTY/Cold Stone overstated the size of its global franchise network by at least 253 locations. It also overstated the growth of its global franchise network by 56 locations.
According to rankingthebrand.com, MTY/Cold Stone hadn’t been ranked in the Franchise 500 since 2016. In 2020 alone, in addition to declining 12 locations, MTY/Cold Stone had 104 franchisees leave the system (at least 10.4% its network; PDF pgs. 100-105), admitted it has fewer than 1,000 global locations and has therefore been overstating its total stores by as much as more than 500 locations for years (see Item 4).
This is particularly noteworthy when one considers that the company ranked at 390—one spot ahead of MTY/Cold Stone—gained one location during 2020 after gaining 42 locations in the preceding eight years. The company ranked just behind MTY/Cold Stone at 392 lost five locations during 2020 after gaining 48 stores in the preceding two years. In stark contrast, however, based on the information published to Entrepreneur.com and its federal disclosures, MTY/Cold Stone lost 56 locations during 2020 after losing 208 locations in the preceding eight years.
MTY/Cold Stone was not worthy of a 2020 Franchise 500 ranking—let alone a top 400 ranking.
As if MTY/Cold Stone’s cheating weren’t enough, the company then published an article to its franchisee recruitment website to boast, “Entrepreneur Magazine Names Cold Stone Creamery® to ‘Franchise 500’ For 2021; Iconic ice cream franchise is named to the most prestigious list in franchising after a banner year in business”. The company also bragged that its ranking proved the company can “measure up”. The article further takes the Franchise 500 ranking out of context referring to it as a “list of the top investment opportunities for 2021”. This is entirely inconsistent with the methodology overview which states the list is not intended to “endorse, advertise, or recommend any particular franchise.”
After emphatically claiming that MTY/Cold Stone is growing, MTY’s own CEO now admits MTY/Cold Stone did not grow in 2021! Due to MTY/Cold Stone’s cheating, an opportunity was stolen from each franchise that placed below MTY/Cold Stone and that especially goes for the 501st franchise that was denied to opportunity to make the prestigious list. In addition, potential franchisees who are considering an investment in an MTY/Cold Stone franchise will be misled by this fake achievement. This is all due to MTY/Cold Stone’s continued pattern of false statements, which is a part of an elaborate scheme that increased the already substantial wealth of MTY chairman Stanley Ma by $214M during the pandemic alone.
Notably, the 2022 version of the Franchise 500 has now been published and MTY/Cold has again taken its rightful position of being left off the list, which proves it cannot “measure up” based on the truth.
Shamelessly, the company was looking to lure more franchise investors by reporting false data to Entrepreneur.com.