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 THAT IT WAS REPORTING FALSE DATA TO HIDE THAT ITS FRANCHISE NETWORK IS COLLAPSING. ITS CHAIRMAN, STANLEY MA, SOLD $43 MILLION OF STOCK WITHOUT CORRECTING THE FALSE STATEMENTS TO INVESTORS—POTENTIALLY COMMITTING INSIDER TRADING. MTY THEN INCREASED KICKBACKS BY $5.3 MILLION ON FRANCHISEES AND AUTHORIZED $3 MILLION IN ANNUAL DIVIDENDS TO STANLEY MA.

U.S. Location Growth

Updated on September 18, 2021

In the early 2000’s, Cold Stone grew its U.S. locations rapidly to as many 1,387 by 2007. After 2007, the company began closing stores. According to the company’s 2020 FDD and data published by Entrepreneur Magazine, Cold Stone hasn’t had a single year of positive growth of its U.S. locations since 2007 and the company has closed 500+ stores during the same period.

Despite this, in recent years, Cold Stone has repeatedly and falsely claimed the company is growing its U.S. locations. We reported these false statements and other potential FTC violations to Cold Stone and its parent company, MTY Food Group. A month later, the company falsely disclosed that these allegations were reported by an employee. Supposedly after investigating the claims, MTY’s CEO, Eric Lefebvre and Audit Chairman, Gary O’Connor, separately stated the accusations were reported by an “active employee”, were “baseless”, previously “evaluated” and had been “dealt with in the past” (PDF pg. 2 and PDF pgs. 2 & 6).  . The following month, Forbes published an article questioning the accuracy of the company’s claims.

In an apparent attempt to cover-up the merits of the allegations, during an earnings call, Lefebvre also made false statements regarding Cold Stone’s growth to a group of securities investors who had expressed concerns about Cold Stone’s store closures: “[O]bviously, there’s always going to be more store openings than more store closures for Cold Stone just because it’s such a big brand…. [T]hings are going to go well.” (PDF pg. 8.) However, as indicated above, the company’s own federal disclosures reflected that the company had negative growth over the past 13 years. In addition, Lefebvre and O’Connor publicly acknowledged they had reviewed the allegations that the company was falsely representing its growth—which were provided to them just one month earlier. Therefore, not only were their statements false, but it also appears they knew the statements were false.

Based on the information above, Cold Stone continually promoted its franchise using false growth data. Despite that Cold Stone had been growing negatively since 2007 and closed more than 500+ stores during that period, the company promoted its franchise opportunity by falsely not only telling potential investors that it was growing, but embellished its illusory growth by claiming it was “rapidly growing”, among the “fastest growing” and describing its fictitious growth as “incredible”.

Finally, below are statements that, based on the information above, some potential investors may find false or misleading about Cold Stone’s true U.S. franchise network growth.

__________________

  • We’re currently focused on expanding Cold Stone Creamery in the U.S., and we expect the brand’s system wide performance will continue its upward trajectory as we continue to grow.
  • Currently, there is rapid growth in Texas and Southeast markets
  • Love ice cream and making people happy? What a coincidence, so do we! As one of the fastest growing franchises in the country, with the most loyal fanbase in the world, we’re always looking for ways to expand and streamline our operations.
  • Cold Stone Creamery® continues their 30th Anniversary celebration with continued growth of the brand.
  • “With our vertical in-house structure we are able to achieve this and at the same time steadily grow the overall brand each year.”
  • When Kahala BrandsTM, one of the world’s most esteemed franchisors, with a portfolio of nearly 20 international brands, including Blimpie®, took the reins of Cold Stone Creamery in 2007, the ice cream franchise became a giant.
  • After 30 years in business, Cold Stone Creamery is still rapidly growing, with over 1,000 locations in the United States and hundreds more in over 30 international markets.
  • COLD STONE CREAMERY IS AN ICONIC, RAPIDLY GROWING BRAND
  • Cold Stone Creamery has grown to over 1,000 locations in the United States, with hundreds more in nearly 30 international markets. This growth has brought together one of the most passionate networks of entrepreneurs in the franchise industry.
  • One of the nation’s most beloved creamery franchises is rapidly expanding!
  • Cold Stone Creamery has grown to over 1,000 locations in the United States, with hundreds more in nearly 30 international markets. This growth has brought together one of the most passionate networks of entrepreneurs in the franchise industry.
  • After 30+ years in business, Cold Stone Creamery® continues to thrive by offering the Ultimate Ice Cream Experience®: a super-premium, artisanal ice cream that is made fresh in our stores, an endless array of mix-in combinations that allows customers to dream up their own Creations™, and exceptional customer service that is full of cheer, song and smiles.
  • COLD STONE CREAMERY IS AN ICONIC, RAPIDLY GROWING BRAND
  • We’ve been growing for years, and we’re not slowing down anytime soon.
  • In 2018, after 30 years in business, Cold Stone Creamery continues to thrive by offering the Ultimate Ice Cream Experience®: a super-premium, artisanal ice cream that is made fresh in our stores, an endless array of mix-in combinations that allows customers to dream up their own Creations™, and exceptional customer service that is full of cheer, song and smiles.
  • COLD STONE CREAMERY IS AN ICONIC, RAPIDLY GROWING BRAND
  • Cold Stone Creamery is a brand that will continue to do incredibly well.
  • “We’ve been growing for years, and we’re not slowing down anytime soon.”
  • Although we have more than 1,000 stores open in the United States and are in nearly 30 international markets, we have no plans for slowing growth and development.
  • You may have already heard about how Cold Stone Creamery offers one of the fastest-growing franchise opportunities on the market today.
  • Franchises are popping up in high-traffic areas everywhere, and the growth shows no sign of stopping.
  • Given the growth and healthy profits the franchise is experiencing, finding a Cold Stone® for sale is a bit like finding a winning lottery ticket.
  • If you would like to invest in a growing company that puts its franchisees first, check out Cold Stone Creamery today.
  • COLD STONE CREAMERY IS FAST BECOMING THE TOP AMERICAN ICE CREAM FRANCHISE
  • Cold Stone Creamery is a thriving franchise system with more than 1,000 locations across the country and a presence in nearly 30 markets internationally.
  • Both 2016 and 2017 saw an increase in the number of franchise owners joining the system, and 2018 is shaping up for even larger growth.
  • The popularity of the brand has been surging and shows no signs of letting up any time soon.
  • Many other fast food franchises, have reached the limit of their feasible growth – and in many cases, they’re contracting. Cold Stone has barely scratched the surface of profitable locations, meaning there’s still big money that can be made for new investors.
  • Cold Stone® Is Growing.
  • Once you see the lines of customers around a Cold Stone Creamery franchise, you’ll quickly realize why the chain is growing so quickly.
  • If you want to get in on the incredible growth this ice cream retailer is experiencing, you should act quickly.
  • Once you see the lines of customers around a Cold Stone Creamery franchise, you’ll quickly realize why the chain is growing so quickly.
  • “Our brand’s marketing support is one of the many reasons why Cold Stone Creamery is such a terrific franchise opportunity, and why we continue to grow after nearly 30 years in business.”
  • It’s no wonder, then, that Cold Stone has become one of the most in-demand franchise opportunities on the market today.
  • As you’ve probably noticed, Cold Stone Creamery franchises are springing up all over the place.
  • As Cold Stone continues to grow and expand, it’s only natural to expect more of these people to try to get their slice of the pie (or better yet, their scoop of the ice cream?).
  • Today, Cold Stone franchises are springing up all over the place – and for good reason.
  • There’s a reason why it’s one of the fastest growing franchise opportunities on the market today.
  • In 1988, Cold Stone Creamery opened its first location in Tempe, Arizona, and will be rolling out 30 new stores domestically and internationally this year.
  • All franchisor services – development, real estate, design and construction, training, operations, purchasing and supply chain, research and development, marketing and public relations – are offered to each franchisee, which helps result in faster and continued growth.
  • Now there are over a thousand Cold Stones® locations in the U.S. – pretty incredible growth for a 25 year period. That’s not even counting the 400+ worldwide, either – and the international market promises to be fertile for continued growth in the years to come, as well.
  • Growth continues in communities of all sizes

MTY Food Group Executives & Other Photos