Cooling business

   The business environment would seem to have grown chilly for Cold Stone Creamery, which has closed three of the five local stores in just over a year.

   The latest, at 2130 Southgate Road, was seized after owner Pittman Investments LLC, failed to pay $23,985 in state sales tax, according to a sign posted on the door. The assets of the store - including a industrial-size ice cream machine and three waffle cone makers - will be sold in a public auction Tuesday.

   The city also has a tax lien against Pittman Investments. Company owner Ralph S. Pittman Jr. could not be reached for comment.
   The other franchises that closed were at 218 N. Tejon St. and 765 N. Academy Blvd. Company spokeswoman Anne Christenson said Cold Stone hopes to reopen the Southgate location under new ownership in a few months, despite the failure of two franchisees.

   "We believe this location is a strong store with a lot of potential especially because of its proximity to the military base," Christenson wrote in an e-mail. "We believe that under the right ownership of a franchisee that is involved and dedicated to the business, the store will thrive."

   Cold Stone has nearly 1,400 franchises internationally and 228 for sale - approximately 16 percent of the franchises. The Ice Cream Reporter, a publication on the food and beverage industry, reported that Cold Stone franchisees are struggling because of the high cost of operating a franchise.

   But Christenson said numbers reflect "economically challenging times," especially for a seasonal business.

   Steve Kozeliski, owner of Cold Stone Creamery at 7230 N. Academy Blvd., agreed.

   "They're all privately owned, and he couldn't make it," Kozeliski said. "It has nothing to do with the corporate franchise."

   But Bruce Hodgkins, previous owner of the Southgate store, said location and corporate policy played into his decision to relinquish the franchise back to corporate in 2005, after three years of business.

   Hodgkins said Cold Stone allowed the Tejon location to open too close to his store and forced him to remodel shortly after opening. He also said Cold Stone didn't allow him to do his own advertising, but he was forced to honor $40,000 worth of corporate coupons in his last year of business.

   "You just don't make any money the way it's set up," he said.

   Christenson said corporate marketing and advertising is "aimed at making the franchisees more profitable," and that remodeling is "always assessed in terms of expense to the franchisee and overall value to the longevity of the business."

   Competition in the local ice cream market is growing. More than a dozen ice cream parlors are in the area, despite closures of Michelle Chocolatiers & Ice Cream in May 2007 and a Maggie Moo's Ice Cream and Treatery franchise in November 2006.

   "When we first looked into getting into this business there wasn't so much ice cream in this town," said Louise Becker, coowner of Maggie Moo's at The Promenade Shops at Briargate. "It's all about location and it's about management. I'm a hands-on manager and yes, we did close one of our stores (in 2006) because of location."

   But Carrie Burris, owner of Colorado City Creamery on 2602 W. Colorado Ave., said the problem is corporate-run franchised stores allow little control over the product.

   Colorado City Creamery "has always been owned by local people. Because it's not a franchise, we can control every aspect of this ice cream," she said. "We control every piece of candy, every nut, every everything that goes into this ice cream."

CONTACT THE WRITER: 636-0152 or melissa.cassutt@gazette.com

TO BE AUCTIONED 

- Carpigiani Coldelite ice cream machine 
- Three Gold Medal giant waffle cone makers 
- Server hot fudge heater and pump 
- Oscartielle and Master-Bilt glass-front freezers 
- Silver King freezer and refrigerator 
- Master-Bilt walk-in freezer and walk-in refrigerator 
- Moffat Turbofan oven
- Two Panasonic cash registers
- 12 chairs; four center-post tables
Note: For a complete list and photos go to www.success-auctions.com

DETAILS

Schur Success Auction Services is auctioning the on-site assets of Cold Stone Creamery

Where: 2130 Southgate Road

When: Tuesday. Preview and registration starts at 9 a.m.; auction begins at 10 a.m.

How it will work: The business will first be offered in bulk, then auctioned off in parts - whichever yields more money will prevail. The taxpayer may settle up any time before the auction begins.

More info: http://success-auctions.com