Negative press surrounding Rocky Mountain Chocolate Factorys newest partner shouldnt affect the chocolatier or its investors, a company chief said this week.
I dont think theres a concern about it negatively affecting us, said Bryan Merryman, chief operating officer for the chocolate factory, Durangos only publicly traded company.
Since teaming up with Cold Stone Creamery in 2008, the chocolatier, in its quarterly reports to investors, has attributed countless successes to the partnership. Company revenues are up, investors are reaping quarterly dividends and the chocolatier has weathered the recession better than most retail systems, Merryman said.
But a few of the companys local stockholders brows raised when business channel CNBC aired a documentary in December on franchises and a segment in it portrayed Cold Stone Creamery in a negative light.
Merryman said the problem stemmed from a franchisee that Cold Stone was in litigation with at the time. Cold Stone Creamery won that legal battle.
After Behind the Counter: The Untold Story of Franchising hit the airwaves, an attorney representing the ice cream company and its franchisors took the news network to task, saying the segment contained inaccurate and defamatory information.
The show highlighted a franchisee who accused the ice cream company of charging hidden fees and royalty payments too high for investors to be profitable.
Some news reports said Cold Stone Creamerys decision to not comment for the show didnt help matters.
CNBC later pulled the segment about the ice cream company after a lawsuit was threatened.
Merryman said despite the negative news coverage that followed last month, good things are coming from the partnership for both parent companies and their franchisees.
It has had a significantly positive impact on the co-branded franchisees, Merryman said.
Under the agreement, Rocky Mountain Chocolate Factory has been bringing their products and image into Cold Stone Creamery stores. The franchisees get a new product to sell and the same business arrangement and fee structure as all other Rocky Mountain franchisees, Merryman said.
Its very clear from the onset what the deal is, and we do our best to help them be successful, Merryman said.
As is the case for any new business, there are risks involved and a small number of the chocolatiers franchisees do meet with failure, Merryman said.
But as it pertains to Cold Stone Creamery, the chocolatier is mostly moving into the ice cream companys top performing stores, Merryman said, so the co-branding effort has been largely successful.
I think were as good as any franchise organization, and we certainly spend a lot on our support system for our franchisees, Merryman said.