RICKY’S: Summit, NJ Store Equipment Auction

Another sad milestone for the dying Ricky’s Candy, Cones & Chaos franchise dream.  

Equipment for the defunct Ricky’s Candy, Cones & Chaos franchise in Summit, NJ will be auctioned by A.J. Willner’s Auctions on Monday, December 14, 2009 at 11:00 AM. 

 

Here is the information from A.J. Willner’s auction page:

ABSOLUTE AUCTION
Like New Gelato, Ice Cream & Candy Equipment 
re: Ricky’s Candy, Cones & Chaos of Summit
By Retention of Landlord. Everything Must Be Sold Regardless of Price!

Auction Date(s):     Monday, December 14, 2009  Time: 11:00 AM

Address:
333 Springfield Ave.    
Rt. 24 to Exit 9A    
Summit, NJ  07901

Inspection Date(s):
Monday, December 14, 2009
Time: 9:30 AM to 11:00 AM
Pickup Date(s): 
Monday, December 14, 2009  Time: 1:00 PM to 4:00 PM
Tuesday, December 15, 2009  Time: 9:00 AM to 1:00 PM

LIKE NEW ICE CREAM, GELATO, CANDY & RESTAURANT EQUIPMENT:
# "New" Prima 18 PLUSA 5 Ft. Glass Front Gelato Showcase (s/n L40002; Recently purchased for $25,000!)
# Master-Bilt Glass Ice Cream Showcase
# Scotsman Undercounter Ice Machine
# True Undercounter Rolling Refrigerator
# 47 Compartment Candy Dispening Unit
# 3 well S.S. Sink w/ Sprayer
# Single Head SaniServe Ice Cream Dispenser & (3) 5 Ft. S.S. Tables
# Bunn CWTF35 Coffeemaker & 6 Head Coke Soda Dispenser
# Beautiful Free Standing & Custom Built Store Fixtures Including Wonka Mobile, Cabinets, Menu Board w/ TV, Outside Lighted Sign, Wall Signage, Decorations, etc.
# 8 Sections of Metro Racks, Small Sentry Safe & Samsung SF 560 Fax
# Large Qty. of Paper Goods, Supplies, Accessories, Tables, Chairs, Hot Fudge Disp., Hand Sinks, etc.

Featured Items:

Prima 18 Self Contained Gelato Showcase
Master Bilt Self Contained Display Freezer Case
Scotsman Under Counter Ice Machine
SaniServ Frozen Beverage Machine
True Under Counter Single Door Refrigerator
Stainless Steel Prep Tables
Stainless Steel Triple Well Sink
Hot Topping Dispensers
6 Flavor Soda Fountain
Dial Face Safe & Fax Machine
Interior Signage
Exterior Signage
Bulk Candy Merchandising Unit
"Wonka" Store Fixture
Animated Store Fixtures
Tables & Chairs

For Complete Catalog please click on "download catalog" at the A.J. Willner’s auction page.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

photos:  A.J. Willner

BASKIN ROBBINS: Franchisees Lose $1.45 per Scoop on Promo

Discount promotions like Baskin Robbins 31 Cent Scoop Night might be great for ice cream lovers and great for the franchisor… but what about the Baskin Robbins franchise owner who foots the bill?  According to Smart Money, BR franchisees lose roughly $1.45 a scoop on 31 Cent Scoop Night

It’s one of the hottest topics in franchising.  Here’s why:  Franchisors make money off the gross sales of their franchisees, regardless of franchisee profitability.  Some franchisors make additional money marking up ingredients and food products to their franchisees.  Public franchisors benefit from higher sales – and stock prices – that are not tied to franchisee profitability.

SmartMoney.com surveyed franchisees from different franchise chains regarding the cost to them of some current and recent promotions. The Smart Money article points out that franchisees generally bear the brunt of a promotions’s cost, including the food, labor, rent and utilities, among other things.

Here’s the Smart Money finding for Baskin Robbins 31 Cent Scoop Night, which report a $1.45 loss per sandwich:

Baskin Robbins

Promotion: 31 Cent Scoop Night – This annual promotion occurred between the hours of 5pm and 10pm on April 29.

What they normally charge: $2.29 (one single scoop)

Promotion Price: 31 cents

Bottom line for restaurant: Loss of roughly $1.45 a scoop

Baskin-Robbins’ 31 Cent Scoop Night is done in the name of charity. Not only does the company donate $100,000 to NVFC National Junior Firefighter Program, but it’s also quite generous to ice cream lovers as well. One scoop (of any flavor you choose) for just 31 cents compared to the regular price of $2.29 at one location in Wisconsin is a pretty sweet deal. Franchisees don’t feel much of that goodwill, however: Beyond the approximate 60-cent cost of the ice cream, a spoon and a cup, store operators also pay another $1.15 per scoop for rent, utilities and labor, estimates one store owner in Wisconsin. Baskin-Robbins spokeswoman, Danielle Sullivan, says the company’s own calculation on per-item profitability differs from those provided to us by franchisees, but she declined to give specific figures. She also declined to comment further on costs and profits.

RELATED POSTS:

SUBWAY: What Do Franchisees Make on $5 Footlongs?

LITTLE CAESARS: What Franchisees Make on a $5 Pizza

McDONALD’S: What Franchisees Make on a $1 Burger

BASKIN ROBBINS: Franchisees Lose $1.45 per Scoop on Promo

QUIZNOS: Franchisees Lost $2.25 per Sub on Giveaway

BURGER KING Franchisees Sue Over $1 Cheeseburgers

WHAT DO YOU THINK OF BASKIN ROBBINS PROMOTIONS?  SHARE A COMMENT BELOW.

RICKY’S CANDY, CONES & CHAOS FRANCHISE

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RICKY’S CANDY: Why’d the Princeton Store Close?

Thanks to Krystal Knapp, writer for the Times of Trenton, for citing UnhappyFranchisee.com as a source for her recent article on the closing of the corporate-owned flagship Ricky’s Candy, Cones & Chaos store in Princeton, NJ (Princeton Borough sweetshop closes on a sour economic note).

Knapp’s article quotes comments left here and on the retired Franchise Pick  website in which Ricky’s new president Donald Cheng blamed the economy for the struggles of the Princeton store and the chain as a whole.  “The current economy has impacted the retail sector much more heavily than others. The Ricky’s model was heavily dependent on a robust economy where parents splurge on their children and friends,” wrote Cheng.  “However, as the economy worsened, more people became budget conscious and retailers have to react by providing better value and Ricky’s did not adjust fast enough."

Cheng had promised a repositioning of the Ricky’s concept to adapt to current economic climate, starting with the Princeton store.  After his short burst of comments here were questioned by current and former franchisees, Cheng was never seen nor heard here again.

The Times article includes some telling details of the financial woes of the failing chain, and its unsuccessful attempt at gaining bankruptcy protection:

In December 2008, the company filed for Chapter 11 bankruptcy. Among other creditors, court records show Ricky’s owed thousands of dollars in back rent to Nassau Tower Realty and $100,000 to the state in sales tax.

Ricky’s struggled to pay rent of $14,590 a month that increased to $15,673 a month in April, court records show. Ricky’s made a partial payment of $2,000 for September 2008, and the realtor tapped into a $75,000 deposit to pay for rent in the coming months. That money was exhausted and Ricky’s owed Nassau Tower $42,301 for March, April and most of February.

The bankruptcy was rejected by a judge and dismissed in May.

According to Knapp, “The Willy Wonka-esque franchise that sold candy, ice cream and other sweets went sour along with the economy, records show.”

Ricky’s demise may have occured “along with” the decline of the economy, but some argue not because of the tough economic times.  According to Guest, commenting on a related Ricky’s Candy post:

…The one flaw of the article is the idea that the economic conditions were a factor in the fall of Ricky’s. NO, IT WAS NOT…… Court documents from the Ch 11 attempt clearly showed that even when the economy was roaring and Toll Brothers couldn’t build a McMansion fast enough Ricky’s was not making any money and the only income supporting the shell was the franchise fees and royalties paid by people who thought they were buying into a successful business model. The house of cards began to crumble once the store owners began to communicate directly and the fact checking began.

Was the Princeton store simply a franchise sales tool from the start?

Ricky’s Candy, Cones & Chaos franchisees have alleged that the Ricky’s concept was not viable from the start and the company’s – and founder’s – main goal was to sell franchises.  Nearly all franchise stores have failed and closed, and angry franchisees are suing. 

The shockingly high rent of the Princeton store suggests that it perhaps was designed to be a brand showcase and franchise sales vehicle rather than a profitable candy store.  Could a candy store in Princeton, NJ, even in good economic times, realistically sell enough candy and cones to justify rent of more than $175,000 per year? 

Or did Ricky’s corporate assume the high rent and high overhead would be recouped not by selling candy, but by selling the dream of owning a successful Ricky’s franchise?

Related Posts on Ricky’s Candy, Cones, & Chaos:

RICKY’S CANDY: Message from Donald William Cheng

RICKY’S CANDY, CONES & CHAOS: Summit, NJ Store to Close

RICKY’S: Princeton, NJ Store Eviction Notice

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

RICKY’S: Princeton, NJ Store Eviction Notice

The sweet dream that was Ricky’s continues to sour.

Back in July of this year, Donald William Cheng expressed confidence that better times were to come for Ricky’s Candy, Cones & Chaos, commenting:

Rickys Candy Cones and Chaos is now run by Mr. Donald William Cheng as of May, 2009. The Princeton store is undergoing a restructuring and is out of bankruptcy. New changes are being effected to combat the changes in the business environment… New management and marketing have been brought in to ensure that future partners and franchisees will be able to sustain a dip in the economy by providing long term financing and stronger financial management and brand management

The same month, an article commemorated the 5th anniversary of the Princeton, NJ corporate store:

Opened by owner Rick Barber in 2004, Ricky’s has continued to grow and evolve, notes Mr. Cheng. “The original idea was to have ice cream and candy for a party. Then, plush toys were added. Now, we want to expand our focus and include more events and parties at the store. Not only birthday parties, but baby showers, graduation parties, bar/bat mitzvahs, even having favors and candies for wedding receptions. We really want to emphasize the service category….

“In addition,” he continues, “we are going forward with an international expansion of our candy line. We’ll have Godiva chocolate as well as candy from Japan and Korea. We will still have all our bulk candy, chocolate bars, and other candy, but we will become a specialty candy store. We plan to reconfigure the store and make it more international.

After his initial comments, Mr. Cheng ceased communicating.  This week, Former owner wrote that “Ricky’s Candy, Cones & Chaos Princeton Flagship Store (Corporate Office) has an eviction notice on their front door.” 

We received these photos from an anonymous Unhappy Franchisee reader.  This may be the end of the line for Ricky’s.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

RICKY’S CANDY, CONES & CHAOS: Summit, NJ Store to Close

We received the following sad message via email from Liliana Carvalho, the owner of the Ricky’s Candy, Cones & Chaos franchise location in Summit, NJ:

Ricky’s Candy,Cones and Chaos of Summit will be closing its doors forever after Nov 15th.

I am the current owner Liliana Carvalho and within the last 20 months have lost over $400k in this Franchise.

It is sadly coming to an end, since I cannot any longer afford to continue to pour money into a failed business concept, which was sold to me as a Sweet profitable Candy and Ice Cream Franchise, early 2008 by Rick Barber ( Franchise owner) and by Mike Kapp (former owner of the Ricky’s Summit location).

I would like to thank all my clients for their patronage during the last 20 months. Wishing them and their families the best and hopefully our  paths will cross again in the near future.

Thank you,

Liliana Carvalho

According to a May, 2004 press release posted on the Ricky’s website,

As a retail chain, Ricky’s Candy, Cones & Chaos is a new version of the “Old Time Candy and Ice Cream Store” with scheduled openings starting in May 2004. With three concurrent store openings starting with Summit NJ ; Princeton NJ ; and Rockefeller Center , NYC, Ricky’s Candy, Cones & Chaos is focusing its future growth on upscale suburban downtowns where retail activity is on the rise.

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COLD STONE CREAMERY: Bitter Franchisee Alleges Encroachment

According to the Brown Daily Herald, a Cold Stone Creamery franchisee blames the recent failure of her Providence, RI franchise on encroachment from another Cold Stone Creamery location.

Kristina Gedutis, who co-owned the Thayer Street franchise with her husband, Craig, for five years, said the store’s sales were down 30 percent from 2008.

Though the location’s rent remained the same, dwindling revenues made it difficult for the owners to make payments, she said…

“When we first opened, business was great — we definitely had our following,” she said.

“There wasn’t another Cold Stone in Providence, so we got most of the area’s business.” Gedutis said when the downtown Cold Stone opened, she saw revenue drop.

“I am bitter toward that,” she said. “It wasn’t really fair.”

The new competing location Gedutis blames for her store’s failure was the result of a new co-branding partnership between Cold Stone & Tim Horton’s, a Canadian-based restaurant chain. 

Gedutis claims that “the opening of a joint Tim Hortons-Cold Stone location on Dorrance Street downtown negatively affected her Thayer Street parlor’s business.”

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Photo:  A closed Cold Stone Creamery franchise location, Lancaster, PA (FranBest Photo library)

COLD STONE CREAMERY: Should Failing Franchisees Keep Quiet?

Frequently, commenters make the point that open discussions by unhappy franchisees on sites such as this just make matters worse and hurt those who are still struggling to survive.

The most recent of these commenters, posting as Alison, made this point about Kahala owned Cold Stone Creamery, making some points I agree with and others I don’t. Valid points can be made on both sides. What do you think? Share your opinion below.

Here are some of the points and my responses.

Alison said: For all those franchisees still hanging in there, this message board can do no good.
It allowed you to anonymously express your opinion to a number of other owners, prospective owners and even management. Isn’t that good?

Alison said:…the upsurge of negative talk and the lawsuits… it’s hurting those people who are hanging in there, trying to make it work.
In other words, shut up and die quietly? Don’t let the word out that you are really in business FOR yourself and BY yourself?

Alison said:To vent about blame is futile, it’s prohibiting franchisees who have profitable stores from selling.
Why would it prevent someone with solid financials to share from selling their store? Aren’t you really saying “It’s keeping us from passing these money pits on to some other unsuspecting sucker”?

Alison said:What we should be doing is telling customers that even though we are franchises and a % of the money goes to Kahala, it’s still a mom and pop ice cream shop…
I agree that locally that’s a good idea… raise the profile of the owner… get involved with community groups… stay in front of the media… use that local owner advantage over corporate-owned competitors… That’s a good idea to be doing all the time, not just troubled times.

However, Alison, your argument that everyone should just keep quiet and put on a happy face is troubling. I don’t think these complaints would be the same if franchisees perceived that Kahala and the Zees were “all in this together.” I’m sure that’s the message in their franchise marketing. If a franchisor knows that they are going to be discussed openly – including where future prospective franchisees are reading – they are going to be incentivised to respond to the franchisee’s need for assistance. If they are not committed to creating a win-win situation, people are going to know it. Franchisees should also be vocal about sharing things franchisors are doing right.

Alison, no one blames Kahala for the challenges of a tough economy, especially when lots of competitors are struggling as well. But this should be the time when franchisees are thinking “Man, I’m glad I paid a premium for this franchise, because I’ve got the brand, the buying power, the marketing expertise and the dedicated support behind me, just like they promised.”

If that’s not what franchisees are saying, I think it would be constructive for them to share what it is that Kahala could do to help them compete? What do you guys want?

WHAT DO YOU THINK? SHARE A COMMENT BELOW.

COLD STONE CREAMERY: Franchisee Alleges FR “Churning”

What follows is a comment left by ex-franchisee JB Montgomery who alleges he’s the victim of “Churning” at the hands of franchisor Cold Stone Creamery. In franchising, “Churning” is the practice of reselling the same location or territory over and over at a profit.
_______________________________________________________

I am a recovering Cold Stone Creamery Franchisee. It will be year next month that we closed the doors and regained our freedom.

In the past 12 months we were under contract to sell our Cold Stone Creamery to a second generation buyer. During that time I saw Cold Stone Creamery Corporate stoop to an all-time low – and have seen first hand the cruelty of “corporate churning” at the expense of those who were “supposed” business partners.

Our first buyer (yes, the first of three in a span of 6 months) put cash on the table in April and was ready to jet off to Chattanooga and Phoenix for 3 weeks of training. This buyer had small business experience in the Hotel franchise sector and had comparable communication skills as other local CS franchisees, one of which is 15 miles to the north and became an owner 12 months ago. This buyer was required to pass a “attitude profile” (FranchiZe Profile, by Dynamic Performance Systems) test before he could continue in the Cold Stone approval process. He failed the 132 question test filled with subjective, rambling and random questions. At first I was shocked! Until I realized that this was the typical Cold Stone MO – that is, what’s the latest new fangled gadget to spend money on. In reality this profile test is a slick way of discriminating against potential buyers from a cultural and racial point of view….and against franchisees eager to leave the system. And, in my opinion, a violation of Section 17, unreasonable denial clause.

Our second buyer, had cash on the table and was also ready to jet off to Cold Stone University for training. He had family Marble Slab ownership experience and had developed a close relationship with the regional Cold Stone training store in Chattanooga, who encouraged him to pursue our store. Again, he had better experience and better communication skills than existing CS franchisees … he also failed the “Attitude Profile”. We talked the area CS reps into giving him a second chance at the test. This time, with the help of my wife and our business broker, he passed by a single point. The CS Area Reps approved it and gave him the go ahead. He passed the in-store evaluation, language test, the food safety course. He was now ready for the 23-day training….we were THRILLED and thought that we would be out by the end of July. BUT…before he could registered for training he needed to have an over-the-phone interview with corporate and then receive corporate approval. In late June we were shocked to learn that he had been turned down by corporate. We appealed to the corporate Ombudsman for assistance on this situation. Her only comment was “that’s business…”. I was shocked.

Our third buyer was a local Cold Stone franchisee who owns a store 15 miles to the east of us. He did not have cash to put down and would need assistance from Corporate to get financing from one of the preferred lenders – and perhaps direct assistance from Corporate. Corporate told us that they were working with this franchisee and they should have things worked out by the end of August, which just happened to coincide with the last bit of credit to our name. In early August, a shot across the bow came from the Cold Stone director of transfers who said, “you are aware that just because he is an existing franchisee does not guarantee that he will be approved”. I knew right then and there that they would not approve him. In late August we received word that corporate would not assist the local franchisee and they would not approve him for purchasing our store. I did not understand the “about face” from their willingness to assist earlier in the month….until later.

****

We closed the doors on Monday, August 27th.

By Friday August 31st, the Cold Stone area reps had the locks changed, inventory completed and the floors clean.

The week of Sept 14th, they had a buyer of their own up and running. They netted a cool $42,000 off a “new” franchisee rather than “allowing” us to sell to one of the qualified buyers.

****

I have been keenly interested in the past year in the Quiznos and UPS law suits. One could easily substituted “Cold Stone Creamery” in either of those law suits in revealing the product costs, labor percentages, kickbacks, franchisor horrors and the non-viable business models. Yet, this “golden child” of the ice cream industry continues to go undetected in their ruthless business practices, their flawed business model and their total disregard for the profitability of the franchisee.

If you are thinking about buying a CS franchise – DON’T DO IT!!!

Cold Stone Creamery Gets Served by Franchisees

The Cold Stone Creamery franchise is getting served.  Richard Gibson’s stinging WSJ article The Inside Scoop has prompted some scathing comments from former Cold Stone Creamery franchise owners.  Here are a few:

"You will lose everything if you get involved with this company"

"…while Cold Stone is sending out emails to franchisees today telling them not to panic… I say panic! You will lose everything if you get involved with this company, and they will shrug their shoulders and say “That’s Business”!."  Comment by Former Franchisee – June 16, 2008

"A large number of Cold Stone’s stores are unprofitable and failing. Yet they continue to sell …"

"I owned three stores–two did $500,000 in sales and the other did $400,000. Therefore each of my stores were operating well above the average, yet we were unable to turn a profit… due to a faulty business model and I think Kahala-Cold Stone knows that.

A large number of Cold Stone’s stores are unprofitable and failing. Yet they continue to sell to prospective franchisees on their own website based on statements such as “profit by making people happy” (see: http://www.coldstonecreamery.com/franchises/steps_to_becoming_a_franchisee.html ) and “Cold Stone’s franchise opportunities are about as solid as they come” (see: http://www.coldstonecreamery.com/franchises/franchise_overview.html ). That strikes me as fraudulent… I think Kahala-Cold Stone is a poorly, poorly run company and it’s really starting to show to the public."  Comment by Cecil Rolle from Tallahassee, FL – June 16, 2008 at 8:27 pm

"I’ve lost more than 1 million dollars… I still have thoughts of SUICIDE…"

"I too, a former franchisee was financially ruined by Cold Stone Creamery. I’ve lost more than 1 million dollars and will be paying off debts for the next 10 years. I still have thoughts of SUICIDE and hope to God there is a class action suit that I may one day be a part of. Cold Stone Corporate likes to pass the blame along to the Franchisees when a store is not successful!! It is NOT the franchisee. The reality is that Cold Stone Corporate put too many stores close together….

"I feel sorry for the franchisees left with stores. I know many of them, and not ONE of them is making money in our state. But Cold Stone Corporate continues to make a percentage on every cent of gross revenue.

The company will blame the individual franchisees failure citing that they had “no experience,” or “didn’t work hard enough.” …the majority of those forced to close are decent hard working individuals that took a chance on “The American Dream,” A dream for me and my family that turned into a nightmare!

…I now get to retire in a trailer on a fixed social security income…I live with the stress everyday knowing I let down my family and myself by ever investing in a Cold Stone Creamery franchise and for believing their lies!…"  Comment by Former Franchisee – June 16, 2008 at 8:28 pm

"These guys are the Enron of franchising…"

"…Cold Stone turned out to be the ultimate scam. These guys are the Enron of franchising & some of these guys should be in jail for the lives that have been ruined because of their greed and arrogance!"  Comment by Former Franchisee – June 16, 2008 at 11:43 pm

ARE YOU FAMILIAR WITH KAHALA & THE COLD STONE CREAMERY FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.

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Tags: COLD STONE CREAMERY, franchisee, franchising, ice cream franchise, kahala corp