Owning a franchise means running a schedule the franchisor wrote: weekly sales reports and fee debits, monthly statements, yearly filings, open audit rights and a renewal notice window, all printed in Items 6, 15 and 17 of the FDD.
Key takeaways
- Cold Stone Creamery requires a sales report every Wednesday for the week ended Tuesday and debits royalty and advertising fees every Monday from an account that must hold $3,000 (Cold Stone Creamery FDD, March 27, 2026, Item 6 and franchise agreement section 5.6).
- Monthly statements are due by the 15th at Hand and Stone, within 14 days of month end at Pet Supplies Plus when it asks, and by the 30th at Cold Stone Creamery (Hand and Stone FDD, amended October 6, 2026, agreement section 12.3).
- The understatement that moves audit costs onto the owner is 5% at Cold Stone Creamery, 3% at Hand and Stone and 2% at Pet Supplies Plus (Pet Supplies Plus FDD, April 20, 2026, Item 6).
- Renewal notice is due at least 210 days before expiry at Cold Stone Creamery, 12 to 9 months before at Hand and Stone and 9 to 3 months before at Pet Supplies Plus, which also wants remodeling finished 90 days before expiry (Item 17 of each FDD).
- At stated rates, royalty plus advertising equals 9% of gross sales at Cold Stone Creamery and 11% at Hand and Stone; Pet Supplies Plus charges 3% royalty after month 12 plus advertising of up to 3.5%, capped at $8,333 a month (Item 6).
- The FTC warns that under a franchise agreement “you may have to pay the franchisor even if you’re losing money” (FTC consumer alert, April 28, 2023).
What does owning a franchise commit you to once the doors open?
After opening day, an owner’s duties come from four parts of the disclosure document: Item 6 (fees and due dates), Item 8 (required suppliers), Item 15 (who must supervise) and Item 17 (renewal, termination and transfer). The franchise agreement attached to the FDD adds the reporting calendar. Item content is fixed by 16 CFR 436.5, and the three FDDs compared here were filed in Minnesota in 2026.
The three systems sit in different sectors and bill on different rhythms: Cold Stone Creamery (ice cream shops run by Kahala Franchising, LLC) debits fees weekly, Hand and Stone Massage and Facial Spa takes a weekly payment with a weekly report, and Pet Supplies Plus (pet food, supplies and grooming) collects by EFT on the 10th of each month.
| Item | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus | Source |
|---|---|---|---|---|
| FDD issuance date | March 27, 2026 | April 6, 2026, amended July 9 and October 6, 2026 | April 20, 2026 | FDD cover pages |
| Initial term | 10 years from opening | 10 years | 10 years | Item 17(a) |
| Royalty | 6% of Gross Sales, weekly | 6% of Gross Sales, weekly | 2% for the first 12 months, then 3%, monthly | Item 6 |
| Required advertising | 3% of weekly Gross Sales | 1% fund plus 4% local (minimum $400 a week) | $4,350 a month in year 1, then the lesser of 3.5% or $8,333 a month | Item 6 |
| Sales reporting rhythm | Weekly, every Wednesday | Weekly, every Tuesday | Monthly statements; royalty on the 10th | Franchise agreements |
| Item 19 content | No financial performance representation | Historical sales data | Historical sales data | Item 19 |
The 8 steps that lead up to signing are laid out in our walkthrough of how buying a franchise works, step by step. The split of legal duties between the two parties, item by item, is mapped in franchisee vs franchisor duties by FDD Item.
What is due daily, weekly, monthly and yearly?
Across the three FDDs the reporting calendar runs tighter than the fee table suggests. Cold Stone Creamery wants a sales report every Wednesday, Hand and Stone every Tuesday, and Pet Supplies Plus collects royalty on the 10th of each month. Monthly financial statements fall due between the 14th and the 30th (at Pet Supplies Plus, on request), annual statements within 90 to 120 days of year end, and records must be kept for 3 to 5 years.
Daily: the register feeds the franchisor
Cold Stone Creamery’s agreement (section 11.1) requires every sale on an approved register and lists “daily cash reports” and “weekly inventories” among the records to keep. Hand and Stone gets “full access to all of Franchisee’s computer and point-of-sale data” without notification (section 12.5), and Pet Supplies Plus has “full access at any time” to the owner’s data and systems (section 5.1).
| When | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus |
|---|---|---|---|
| Daily | All sales on the approved POS; daily cash reports kept | POS data open to the franchisor without notification | Data and systems open to the franchisor at any time |
| Weekly | Wednesday: sales report for the week ended Tuesday; Monday: royalty and advertising debited | Tuesday: Gross Sales Report plus 6% royalty, 1% fund and 4% local advertising for the week ended Saturday | No weekly report set in Item 6 or Article V of the agreement |
| Monthly | By the 30th: profit and loss statement; last Thursday: POS help desk fee up to $60; data fee up to $75 | By the 15th: balance sheet and income statement; $726 software fee plus $35 cyber insurance | 10th: royalty, technology fee and ad fund by EFT; within 14 days of month end, on request: balance sheet and profit and loss |
| Yearly | Within 90 days of year end: profit and loss and balance sheet; annual meeting fee up to $1,000 | Within 120 days of fiscal year end: annual statements, CPA review if required; training up to 2 times a year, 7 days total | Within 120 days, on request: CPA-prepared annual statements; annual local marketing plan; conference up to $2,000 per person |
| End of term | Notice at least 210 days before expiry; renewal fee 50% of the then-current initial fee | Notice 12 to 9 months before expiry; renewal fee 25% of the then-current initial fee | Notice 9 to 3 months before expiry; remodel done 90 days before; renewal fee $2,500 |
| Records kept | Current fiscal year plus the 3 preceding years | The full term plus 5 years | At least 5 fiscal years |
Missing a weekly report has a built-in consequence at Cold Stone Creamery: if no report arrives on a Wednesday, the franchisor “may estimate the Royalty Fee and Advertising Fee based upon prior reports” and withdraw up to the entire $3,000 held in the depository account, crediting any overage within 30 days (agreement section 5.6).
How much of each sales dollar is owed back, and on what day?
At stated rates, Cold Stone Creamery takes 9% of gross sales (6% royalty and 3% advertising), Hand and Stone takes 11% (6% royalty, 1% marketing fund and 4% local advertising) and Pet Supplies Plus takes a 3% royalty after the first 12 months plus advertising of up to 3.5%. Fixed monthly charges for software, data and point-of-sale equipment sit on top of those percentages.
| Recurring charge | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus | Source |
|---|---|---|---|---|
| Royalty | 6% of Gross Sales, debited Monday | 6% of Gross Sales, paid Tuesday | 2% in months 1 to 12, then 3%, paid on the 10th | Item 6 |
| Brand or national fund | 2% National Fund (within the 3%) | 1%, may rise to 2% | 1/3 of the advertising amount | Item 6 |
| Local or regional advertising | 1% Regional Fund (within the 3%) | 4%, minimum $400 a week; fund plus local capped at 5% | 2/3 of the advertising amount; $100,000 annual cap | Item 6 |
| Software and data | Data fee up to $75 a month; POS help desk up to $60 a month | $726 a month plus $35 cyber insurance; may rise up to 10% a year | Technology fee up to $1,500 a month; may rise up to 10% a year | Item 6 |
| Equipment | Depository balance of $3,000 at all times | Hardware and software upgrades, about $1,000 a year | POS lease $295 to $431 a month | Item 6 |
Royalty plus required advertising equals 9% of gross sales at Cold Stone Creamery, 11% at Hand and Stone and up to 6.5% at Pet Supplies Plus after month 12. Source: Item 6 of each 2026 FDD.
The fixed lines add up without any sales assumption. Hand and Stone’s software and cyber charges come to $761 a month, or $9,132 a year, and its $400 weekly local advertising floor is $20,800 a year. Pet Supplies Plus’s year-one advertising of $3,350 local plus $1,000 national is $4,350 a month, or $52,200 over 12 months. Rates across a wider set of filings are compared in our franchise royalty rate index and our franchise advertising fund study.
The fees run whether or not the unit is profitable. The FTC consumer alert of April 28, 2023 says that “you may have to pay the franchisor even if you’re losing money,” and each of the 3 fee tables above is charged on gross sales, not profit. This summary is not legal, financial or investment advice.
What happens when a report is late or sales come in short?
Each FDD prices lateness and under-reporting separately. Cold Stone Creamery charges $100 per week for any late report and 5% or $100 on late payments; Hand and Stone charges 18% a year on overdue amounts; Pet Supplies Plus charges up to 1.5% a month. The audit bill shifts to the owner once reported sales or fees prove short by 5%, 3% or 2%, depending on the system.
| Event | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus | Source |
|---|---|---|---|---|
| Late report | $100 per week or partial week | Two missed reports or payments within 12 months is a non-curable default | 25% surcharge on the royalty owed on unreported revenue | Item 6; Item 17(h); agreement 5.4 |
| Late payment | 5% of the unpaid amount or $100, whichever is greater, after 10 days | 18% per year or the legal maximum, if less | Lesser of 1.5% per month or the legal maximum, 10 days after due | Item 6 |
| Audit notice | Any time in business hours, with or without notice | During normal business hours | No notice needed, during business hours | Agreements 11.2, 12.6, 5.3 |
| Owner pays audit cost when | Understatement of 5% or more, or reports not furnished | Understatement of at least 3% | Understatement of 2% or more | Item 6 |
| Cure period for unpaid fees | 7 days | 5 days after notice | 15 days | Item 17(g) |
The audit bill moves to the owner at a 5% understatement at Cold Stone Creamery, 3% at Hand and Stone and 2% at Pet Supplies Plus. Source: Item 6 of each 2026 FDD.
Two clauses raise the stakes. Note 13 to Cold Stone Creamery’s Item 6 lets royalties rise “up to eighteen percent (18%) of Gross Sales” during a breach, charged for a minimum 14-day period. Hand and Stone’s Item 17(h) lists reports “understating any amounts due by more than 3%” on 2 or more separate occasions as a default with no chance to cure.
Can a manager run the unit, or must the owner be on site?
None of the three FDDs makes the owner work every shift, but each requires a trained, full-time person in charge. Cold Stone Creamery requires a full-time on-premises Manager and states it is not licensing owners “merely seeking a passive investment”; Hand and Stone requires full-time supervision by the owner or a Designated Manager; Pet Supplies Plus allows a Key Manager who completes initial training.
| Item 15 rule | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus |
|---|---|---|---|
| Who supervises daily | At least one full-time on-premises Manager; owner time strongly recommended | Owner or Designated Manager, full time | Owner full time, or a Key Manager |
| Training before managing | Manager must complete the Training Program | Designated Manager completes initial training before opening | Key Manager completes initial training; store always staffed by 1 trained person |
| Replacing the manager | Replacement must meet the qualified-operator criteria | Owner must keep the franchisor informed of the current Designated Manager | New Key Manager trained within 30 days of hire |
| Who else signs | Principals and spouses sign the Guaranty of Franchise Agreement | Owners, family members and managers may be required to sign nondisclosure and non-competition agreements | Owners and spouses sign a Personal Guaranty |
The FTC’s 2023 alert puts the time point bluntly: even owners who hire day-to-day managers will likely find the business “involves a major commitment of time, effort, and resources.” Item 15 rules across 259 filings are indexed in our semi-absentee franchise rules by FDD.
Which purchases, meetings and upgrades are not optional?
Item 8 shows how much ongoing spending is locked to approved suppliers or specifications: over 80% of Cold Stone Creamery’s raw materials and supplies, 70% to 80% of Hand and Stone’s ongoing purchases and at least 60% of Pet Supplies Plus’s operating costs. Item 11 opens with the rule’s required sentence that the franchisor need not provide any help “except as listed below,” so post-opening support is limited to what is written there.
| Obligation | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus | Source |
|---|---|---|---|---|
| Share of ongoing purchases tied to approved sources or specs | Over 80% of raw materials, products and supplies | 70% to 80% | At least 60% of ongoing costs | Item 8 |
| Supplier rebates disclosed | Vendor allowances usually 1% to 5% | Rebates of 1% to 20% of sales to the system | About 99% of scanback and promotional savings returned to franchisees | Item 8 |
| Annual meeting or conference | Up to $1,000, charged even if absent | Ongoing training up to 2 times a year, 7 days total | Up to $2,000 per person; minimum charge up to $2,000 if absent | Item 6 |
| Extra training on request | $300 per person per day | $350 per day; refresher about $150 per day | $300 per day | Item 6 |
| Required programs | $100 per day for refusing a required promotion or test | Gift card, rewards, referral and membership programs | Customer survey costs if results fall below standard | Item 6 |
| Remodel or system change | On 30 days’ notice, at owner’s cost (agreement 2.3(e)) | All costs of system modifications | Updates due 90 days before renewal | Item 6; Item 17 |
When must you act to renew, and what will renewal cost?
Renewal is not automatic in any of the three agreements. Each requires written notice inside a set window, a clean default record, a general release and signing the then-current agreement, whose fees may differ. Cold Stone Creamery allows one 5-year renewal, Hand and Stone one 10-year renewal (20 years total), and Pet Supplies Plus two 5-year renewals followed by a further 5-year term that “shall not be unreasonably withheld.”
| Renewal input | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus |
|---|---|---|---|
| Notice window | At least 210 days before expiry | Not less than 9 nor more than 12 months before | Not fewer than 3 nor more than 9 months before |
| Renewal fee formula (Item 6) | 50% of the then-current initial fee | 25% of the then-current initial fee | Flat $2,500 |
| Initial fee in the current Item 5 | $27,000 (first traditional restaurant) | $49,500 (new franchisee) | Not a percentage formula |
| Renewal fee if Item 5 fee is unchanged | 50% x $27,000 = $13,500 | 25% x $49,500 = $12,375 | $2,500 |
| Default record allowed | No more than 3 default notices in the term, 2 in the last 5 years | Not in default more than twice in the initial term | Not in breach; substantial compliance |
| Renewal term | 5 years, no further right to renew | 10 years; total capped at 20 years | 2 successive 5-year terms |
The renewal fee rows are arithmetic on the current Item 5 fees; the real fee uses the initial fee in force at renewal. Remodeling is a separate cost: Cold Stone Creamery requires a remodel “if necessary” at renewal, and Pet Supplies Plus wants all updates finished 90 days before expiry. How term and renewal clauses compare across a wider sample is tabulated in our franchise agreement terms report.
What does selling or handing off a franchise involve?
Selling the unit triggers a transfer fee, franchisor approval of the buyer and a right of first refusal in all three FDDs. Transfer fees are $17,500 at a traditional Cold Stone Creamery, 50% of the initial fee at Hand and Stone ($24,750 at the current $49,500 fee, plus $2,300 for onsite training paid by the buyer), and $5,000 at Pet Supplies Plus.
| Exit step | Cold Stone Creamery | Hand and Stone | Pet Supplies Plus | Source |
|---|---|---|---|---|
| Transfer fee | $17,500 traditional; $5,000 non-traditional | 50% of the initial fee at transfer | $5,000 | Item 6 |
| Right of first refusal | “We can match any offer” | May match an offer or assign the right | Answer within 30 days of receiving the offer | Item 17(n) |
| Purchase option at end of term | Can match any offer | Assets at book value within 30 days after termination or expiry | Option to purchase at book value | Item 17(o) |
| Death or disability | Transfer to an approved buyer within 90 days | Representative must transfer within 180 days or the franchisor may terminate | Heirs may take over within 45 days if they assume the agreement and complete training | Item 17(p) |
| Early exit by the owner | 90 days’ notice plus early termination damages | No contractual right to terminate | No contractual right to terminate | Item 6; Item 17(d) |
Exit costs depend on the formula in Item 6, so the same buyer can face a $5,000 or a $24,750 fee for comparable units. Transfer and renewal fees across 245 filings are compared in our franchise transfer fee fact sheet.
Is owning a franchise a fit for the way you want to work?
Decide on the obligations, not the logo. If you cannot commit a trained person to on-site supervision and a bookkeeper to weekly or monthly reporting, the three systems here do not fit. The table maps 6 common situations to the clause to read first and the threshold these FDDs set.
| If this describes you | Read this first | Threshold in these 3 FDDs |
|---|---|---|
| You want a manager to run daily operations | Item 15 | Cold Stone Creamery requires a full-time Manager and rejects passive investors; Pet Supplies Plus allows a Key Manager trained within 30 days |
| Your cash comes in unevenly | Item 6 due dates | Weekly debits with a $3,000 floor at Cold Stone Creamery; monthly EFT on the 10th at Pet Supplies Plus |
| You may sell within 5 years | Item 6 transfer fee and Item 17(m) to (n) | $5,000 to $24,750 plus buyer approval and a right of first refusal |
| You want a 20-year horizon | Item 17(a) to (c) | Hand and Stone 10 plus 10 years; Pet Supplies Plus 10 plus 5 plus 5; Cold Stone Creamery 10 plus 5, then a discretionary successor term |
| Your books are outsourced | Agreement reporting sections | Monthly statements by the 14th, 15th or 30th; annual within 90 or 120 days |
| You have received default notices before | Item 17(c) renewal conditions | Cold Stone Creamery: no more than 3 notices; Hand and Stone: no more than 2 defaults |
What an owner keeps depends on the Item 6 fees above, the Item 7 opening costs and the sales data, if any, in Item 19. Hand and Stone and Pet Supplies Plus include historical sales data in Item 19, while Cold Stone Creamery’s Item 19 makes no financial performance representation. How to read that item is set out in our guide to franchise Item 19 disclosures, and the full 23-item structure is in our franchise disclosure document explainer.
How we compiled this
We read 3 Franchise Disclosure Documents filed with the Minnesota Department of Commerce in 2026, including the franchise agreements attached to each, plus the text of 16 CFR 436.5 and one FTC consumer alert, all accessed in November 2026. The brands were picked to cover 3 sectors and 3 billing rhythms; the selection is not a ranking or an endorsement. We excluded every Item 19 figure and used no sales assumptions.
Frequently asked questions
Is owning a franchise passive income?
Not in these filings. Cold Stone Creamery’s Item 15 says it is not licensing owners merely seeking a passive investment and requires a full-time on-premises Manager. Hand and Stone requires full-time supervision by the owner or a Designated Manager. The FTC’s April 2023 alert adds that even owners who hire managers face a major commitment of time, effort and resources.
How much does a franchise owner make?
Owner income is not printed here because it depends on figures each brand discloses only in Item 19, if at all. What drives it is visible in the FDD: the Item 6 fees, such as royalties of 6% of gross sales at two of the three systems compared, the Item 7 opening costs, and the Item 19 sales data. Read all three for any brand you consider.
Can a franchisor audit my books without notice?
Yes, in these agreements. Cold Stone Creamery may audit at any time during business hours, with or without prior notice (section 11.2). Pet Supplies Plus need not give notice but must audit during normal business hours (section 5.3). Hand and Stone audits during normal business hours, and the owner pays the cost if underpayments reach 3% or more (section 12.6).
What happens if I miss a royalty payment?
Late charges start first, then default. Cold Stone Creamery adds 5% of the unpaid amount or $100, whichever is greater, after 10 days and gives 7 days to cure. Hand and Stone charges 18% a year and gives 5 days after notice. Pet Supplies Plus charges up to 1.5% a month and allows a 15-day cure period before termination.
Does a franchise renew automatically?
No. Each of the three agreements requires timely written notice: at least 210 days before expiry at Cold Stone Creamery, 9 to 12 months before at Hand and Stone and 3 to 9 months before at Pet Supplies Plus. Owners must also be free of defaults, sign a general release and accept the franchisor’s then-current agreement, which may carry different fees.
How long do you own a franchise for?
You hold a license for a fixed term, not the brand. All three FDDs set a 10-year initial term. Hand and Stone caps the total at 20 years, Pet Supplies Plus allows two 5-year renewals and then a further 5-year term, and Cold Stone Creamery allows one 5-year renewal followed by a successor term granted at its discretion.
Sources
- Cold Stone Creamery Franchise Disclosure Document, issued March 27, 2026 (Kahala Franchising, LLC), Items 5, 6, 8, 11, 15, 17, 19 and Exhibit E. Accessed November 2, 2026.
- Hand and Stone Massage and Facial Spa Franchise Disclosure Document, issued April 6, 2026, as amended July 9, 2026 and October 6, 2026 (Hand and Stone Franchise, LLC), Items 5, 6, 8, 15, 17, 19 and Franchise Agreement. Accessed November 2, 2026.
- Pet Supplies Plus Franchise Disclosure Document, issued April 20, 2026 (PSP Franchise Operations SPV, LLC), Items 6, 8, 11, 15, 17, 19 and Franchise Agreement. Accessed November 2, 2026.
- 16 CFR 436.5, Disclosure items, Electronic Code of Federal Regulations. Accessed November 2, 2026.
- Franchise Fundamentals: Debunking five myths about buying a franchise, Federal Trade Commission, April 28, 2023. Accessed November 2, 2026.