The acquisition is the first for Kahala-Cold Stone, a joint venture of Kahala Corp. and Cold Stone Creamery. As GSR reported recently, the venture was formed to franchise new locations of 13 different brands that were part of the original deal, with the combined entity acting as a holding company for the brands.
Kevin Blackwell, chairman and chief strategist of Kahala-Cold Stone, calls the Cereality acquisition the first of many to come. He notes that Cereality holds franchise commitments for the opening of an additional 24 cafes over the next six years.
Before 2007, Cereality had wholly owned and operated all of its cafes. There are now two franchise locations open and the company has received more than 7,000 inquiries to date from entrepreneurs interested in opening Cerealities across the country, according to the acquisition announcement by Kahala-Cold Stone.
Cereality, focused around brand-name cereals, offers customers the choice of more than 30 different cereals, 40 toppings, a variety of milks and choices of hot and cold drinks. With the acquisition of Cereality, Kahala-Cold Stone owns and franchises 14 restaurant and service brands that operate 4,600 locations worldwide and generate $1.1 billion in system-wide sales.
Kahala-Cold Stone's focus is on brands that hold the potential for significant growth. One of the advantages of the new arrangement, according to Kahala-Cold Stone, is that it will create the opportunity for existing franchisees to diversify their business without straying from a familiar franchise system.
Kahala has acquired a roster of brands since 1998, often in the early stages of their development. Also in 1988, Cold Stone Creamery opened its first store in Tempe, AZ. In addition to Cereality, Kahala-Cold Stone's brands include Blimpie, Cold Stone Creamery, Frulatti Café and Bakery, the Great Steak & Potato Company, Johnnie's NY Pizzeria, NRgize Lifestyle Cafe, Ranch 1, Rollerz, Samurai Sam's Teriyaki Grill, Surf City Squeeze, Taco Time, V's Barbershop and Waffl'.
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