An independent franchisee association has filed a lawsuit against the Cold Stone Creamery franchise for not being transparent enough, according to a report.
In a bizarre twist, Cold Stone Creamery actually helped launch the independent franchise association. A Florida district court ruled that a lawsuit brought against Cold Stone should be put on hold until the disputes were individually arbitrated, according to Bluemaumau.
The ice-cream franchise had argued that the franchisees represented by the National Independent Association of Cold Stone Creamery Franchisees had all signed franchise contracts agreeing that any and all disputes must be resolved through individual arbitration in Arizona, not Florida. The court also agreed in its May 21 ruling that the NIACCF did not have "association" standing in the Florida lawsuit.
First on Cold Stone's list of franchisees to arbitrate were three leaders of the independent group, Rudy Puig, president, Ed Reesman, chair of purchasing committee, and Frank Caperino, treasurer.
Prior to NIACCF filing its complaint, association directors had been vocal in the press about their frustrations with Cold Stone and holding company Kahala, in trying to establish a dialogue to improve franchisee profitability. They pushed hard to get the franchisor to be more transparent. Association leaders asked why their main product, sweet cream, was so expensive, how their advertising dollars were being spent, and how much money Cold Stone was collecting on unredeemed gift cards.
