Sample Business Plan on Cold Stone Creamery Business Plan
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EXECUTIVE SUMMARY
The Business Concept
John Smith Enterprises, LLC (John Smith Enterprises or the Company) will become the Master Franchisee (Area Developer) for the Cold Stone Creamery territory in AnyCity. There are currently 57 Cold Stone stores in AnyCity, which are owned by an existing Franchisee. The Company will purchase the rights to the Franchise from the existing Franchisee owner.
Cold Stone Creamery (CSC) has about 1500 stores worldwide. Individuals/businesses can buy territories from Cold Stone. Cold Stone sells these territories to individuals who will than expand each of the territories for them. Larger states can have multiple territories (California has three). AnyCity has only one territory, which covers the entire state.
Cold Stone Creamery is the world’s best ice cream concept. It has the most attractive store design, the friendliest customer service, a unique and endearing customer-appreciation system (we holler for a dollar!), and the niche’s largest profit margins. The CSC package is winning over customers and investors at an astounding rate. In the Southeast, where there is no dominant player in the ice cream parlor market, CSC is in a prime position to prevail as the ice cream king.
The Company will purchase the existing AnyCity territory of 57 stores and work with the Franchisees to grow the territory from its existing ~$20 million revenue base. John Smith Enterprises will be responsible for assuring that each of the 57 stores are kept clean and that they are selling the products that the corporate office has authorized. If someone wants to open a new store, John Smith Enterprises will help them find the right location and lease agreement. The Company will also help them set up the store and help with the initial opening of the store. Other responsibilities also include helping Franchisees with operational problems.
The AnyCity territory is growing rapidly. AnyCity was the fastest growing state in 2006. AnyCity has been booming for decades and has grown from 499,000 people prior to World War II to nearly 6.2 million people today. The population of Maricopa Country (Phoenix and area) grew from about 400,000 to nearly 4 million in the same period.
Projections call for the state to continue growing in population. As more people move into areas, more shopping and entertainment areas will be built. These are prime locations for the major of the ice-cream shops. Ice-cream remains a favorite treat in the US and Americans consume the most ice cream in the world - about 15 quarts of ice cream per person per year.
John Smith Enterprises expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars and the competitive landscape.
Projections call for the Company to generate royalty revenues of $418,000 in 2009. John Smith Enterprises will achieve strong growth over the next several years. Territory sales will reach 25.4 million. This will yield $508,000 in royalty revenues and more than $127,000 of net income by the fifth year.
The Opportunity
History of Ice Cream
According to the International Dairy Food Association (IDFA), ice cream’s origins started in the second century B.C. History tells us ‘Alexander the Great’ favored honey and nectar over snow and ice; Nero Claudius Caesar (A.D. 54-86), during the Roman Empire, would routinely send runners to the mountains for snow. We also know that King Solomon during harvesting enjoyed iced drinks. But it wasn’t until a thousand years later that Marco Polo brought back to Italy, after visiting the Far East, a recipe that resembles today’s sherbet.
Most historians believe around the 16th century many people in England began to consume “creamed iced”. In 1660 France made frozen desserts available to the public in a recipe of blending milk, cream, butter and eggs at the first café in Paris called Café Procope.
In a letter written in 1744 by a guest of Maryland’s Governor William Bladen the first official account of ice cream in the United States was made. Later, the New York Gazette, on May 12, 1777 advertised ice cream on a daily basis from confectioner Philip Lenzi.
At President Madison’s second inaugural banquet at the White House in 1812 Dolley Madison served a “magnificent strawberry ice cream creation”. During World War II ice cream became a notable morale symbol. Currently, because of modern technology, the market has advanced to annual productions of more than 1.6 billion gallons of ice cream. Today we have ice cream specialty stores as well as restaurants that serve a variety of unique and popular frozen desserts. Furthermore, literally millions of ice cream cones are served daily; research shows over 150,000 cones are produced every 24 hours in the U.S. alone. 2
U. S. Ice Cream Market
According to 2007 Mindbranch Research, the U.S. market for ice cream and related frozen desserts includes:
§ Ice cream
§ Frozen yogurt
§ Sherbet
§ Sorbet
§ Water ice
§ Other frozen novelties, such as ice cream:
o Cakes
o Pies
o Rolls
Analysts from Packaged Facts research estimate 2007 United States retail and foodservice ice cream market topped $23.3 billion; up 4% from $22.4 billion in 2006 and up 12.8% from $20.7 billion in 2003. 3
The ice cream industry creates thousands of jobs in America; it also generates well-being in the nation’s dairy industry. In 2006 approximately 9% of all milk produced by U.S. dairy farmers was used to make ice cream. The IDFA released the following 2007 ice cream trends overview: 4
Market Overview
¨ Total U.S. production of ice cream and related frozen desserts in 2006 amounted to about 1.55 billion gallons, an increase of 0.7% over 2005. (Source: USDA)
¨ Based on ice cream consumption figures, the top five individual flavors in terms of share of segment in the United States are: (Source: The NPD Group’s National Eating Trends Services)
o Vanilla (30%)
o Chocolate (10%)
o Butter pecan (4%)
o Strawberry (3.7%)
o Chocolate chip mint (3.2%)
¨ In 2006*, total U.S. sales of ice cream and frozen desserts reached nearly $23 billion. Of that total (Source: 2007 Dairy Facts/International Ice Cream Association):