Kahala-Cold Stone to Acquire Cereality Cereal

First Acquisition by Newly Formed Franchising Group

SCOTTSDALE, Ariz. (Blue MauMau) - Kahala-Cold Stone, today announced the acquisition of Cereality Cereal Bar & Café. Specific terms of the transaction were not disclosed.

Founded in 2003, Cereality is a new concept in the QSR space, specializing in creating a unique and entertaining experience around the American ritual of eating cereal. Customers choose a base from Cereality’s menu of more than 30 cereal varieties and signature cereal blends, and select from 40 toppings and mix-in combinations to create their ultimate bowl topped with their favorite assorted milk and hot and cold beverage. The offerings extend to parfaits, smoothies, cereal bars and other bakery items. The Cereality customer experience is enhanced by a home kitchen atmosphere and the preparation of orders by pajama-clad Cereologists.

Cereality has seven cafés in operation, with an eighth location scheduled to open at JFK International Airport later this month. Cereality currently holds franchise commitments for the opening of an additional 24 cafés over the next six years. Prior to 2007, Cereality had wholly owned and operated all of its cafés. 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.

Cereality co-founders David Roth and Rick Bacher commented, "Kahala-Cold Stone is a franchising powerhouse and we believe Cereality will realize its full potential by leveraging its operational and brand-building expertise. Shared between us is a sharp focus on creating a unique customer experience and we very much look forward to opportunities to come as we ramp up our visibility in the marketplace.

"As entrepreneurs ourselves, we fully appreciate the value Kahala-Cold Stone is delivering to fellow entrepreneurs."

Cereality marks the first acquisition by the recently formed Kahala-Cold Stone. As announced on May 10, 2007 Kahala-Cold Stone was formed through the combination of Kahala Corp., a franchisor, developer, and marketer of QSR and Cold Stone Creamery.

Cross Posted at: Let's Talk Franchising