A Small-town Feeling

Tim Koons-McGee, left, and Roy Koons-McGee, founders of Comfy Cow.

Tim Koons-McGee, co-owner of The Comfy Cow, confirmed to us that his ice cream shop is indeed looking beyond their announced New Albany, Ind., expansion, to Indianapolis, Lexington, Columbus and Nashville – and, in fact, points beyond.

The sky’s the limit, apparently.

The Koons-McGees’ expansion model will be franchising, an imperfect model that relies for consistency and quality on remote business people who may have their own opinions of operating, marketing and keeping costs down.

Many have been very, very successful – Papa John’s, McDonald’s and Jimmy John’s, just to name a few. Others have been far less successful – Krispy Kreme, Atlanta Bread Co. and Cold Stone Creamery.

Actually, Cold Stone Creamery is a pretty pertinent case study for Comfy Cow. The ice cream company expanded too rapidly. And the high costs of operation combined with a slippery economy made franchisees skittish.

They began to feel their $4 scoop was overpriced and did too much couponing and special promotions to bring business in the door and then cut corners to keep their margins up.

These business models, good and bad, have not escaped the attention of Tim Koons-McGee, who has a degree in economics from Princeton University. So he’s being cautious, taking lessons from the good and the bad.

“Ours will be similar to the Papa John model,” Koons-McGee told me. “When you set up a Papa John’s franchise, you have to order everything from them and learn all their cooking techniques.”

Comfy Cow frankfortWhen you think about it, the key element for Comfy Cow is the ice cream itself, which is made right in the back of the Frankfort Avenue location in Clifton.

When you get past the smiling attendees and the funky blackboard, the cool flavors and concoctions, Koons-McGee believes that cream is Comfy Cow’s secret sauce.

And it will be the sauce for his franchisees, which means fresh-made product rather than ice cream that’s shipped in refrigerated containers and allowed to sit in freezers for several days.

So the key to the franchise expansion will be a network of commissaries the Koons-McGees will set up regionally to produce the ice cream for their franchisees that is up to Louisville standards – not unlike regional distribution networks the big chain retailers operate.

Workable when you’re dealing with franchisees in Kentucky, Tennessee, Ohio, Indiana and Illinois – the contiguous states.

But the thread becomes more slender and the headaches grow when you’re trying to maintain that network in New York, Florida, Oregon, Arizona, Minnesota. For that reason, Koons-McGee said Comfy Cow plans to be taking it organically slow, starting close to home – and evaluating his potential business partners very carefully.

Those partners will also be critical to the success of the expansion. “We’re not just looking for people with money,” he told me. “A lot of people have money.

“We’re looking for people who get it; who’ve run retail operations; who get the tricky business of pleasing the consumer.”

The financial requirements are fairly modest, below what is termed “Reg D” investors under U.S. Securities and Exchange Commission requirements to invest in startups.

Under Regulation D, the definition of an “accredited investor” includes having a minimum of $1 million in net worth, or having earned at least $200,000 annually for the past two years.

On the Comfy Cow website, their requirements are:

We are looking for individuals with a minimum liquid net worth of $125,000 and minimum total net worth of $350,000. (Note: We do not provide any financial advice or financing, so please consult your financial advisor before making any investment decisions).

(See the full franchising terms below.)

Koons-McGee said the selected franchisees will be brought to Louisville and immersed in the Comfy Cow culture to see how it works and why it works.

I have a Comfy Cow bible. It has all the articles that have been written about us, all the customer accolades and criticisms. I want them to understand the nature of our success and the nature of our brand, so they can replicate it in their locations. This isn’t some corporate concept, it’s just two guys with a vision and a dream and a lot of hard work.

And the basis for that vision?

“I was asked about that recently,” Koons-McGee said, “and I said ‘If Lynn’s Paradise Café and Heine Bros. had a love child, it would be Comfy Cow.’ ”

The full franchising terms:

What are the basic terms of The Comfy Cow Franchise Agreement?

  • Basic term of 10 years for a fee of $30,000
  • Renewal term of up to 10 years
  • Royalty of five percent (5.0%)
  • Local Store Marketing fund of three percent (3.0%) and one percent (1%) contribution to National Fund

What is the minimum number of stores development I am committed to develop as a franchisee?

  • To qualify as a new Comfy Cow franchisee, you are required to commit to a minimum of one (1) store. Ideally we prefer to sell small, three store territories to qualified franchisees.

What experience do I need to have to qualify?

  • Operational or P&L management experience would be beneficial and is preferred. However, we will provide training in basic store management to all of our franchisees.

How much money I would make?

  • We cannot answer this question, as this could be construed as an earnings claim. The potential of making money as a franchisee depends on a variety of factors, including but not limited to, location, visibility, your business ability, and your commitments, among other factors.

What is the size of a typical Comfy Cow store?

  • We think the minimum size of a Comfy Cow store is approx. 1,500 square feet for a typical setting. Additional layout options may be available for specialized applications and space configurations.

Does The Comfy Cow provide any development and real estate assistance?

  • Yes, we provide development assistance for you in selecting an architect, approving layouts, and approving real estate. We also provide construction guidance.

What type of training does The Comfy Cow provide?

  • We provide a minimum of five (5) days of training for you and up to two employees.

What support do you provide to your franchisees?

  • Assistance during development, site selection, negotiation of real-estate, and construction
  • The Comfy Cow operational training program
  • Support to plan and execute a grand opening and help you develop a local store marketing plan
  • Ongoing support from an experienced franchise business manager and operational support organization

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