Cold Stone Creamery, a former Inc. 500 company with more than 1,400 ice-cream shops worldwide, has merged with Kahala, a franchiser and developer whose brands include Blimpie and Ranch1, the companies announced Friday.
The merger creates Kahala Cold Stone, a holding company for 13 fast-food brands -- including Cold Stone, Blimpie, The Great Steak & Potato Company, and Johnnie's NY Pizzeria, among others -- that generate more than $1.1 billion in system-wide sales, the companies said. The new partnership will comprise more than 3,000 franchisees and 4,600 retail locations in 15 countries worldwide. Both Cold Stone and Kahala are based in Scottsdale, Ariz.
In addition to the increased size and scale of the company, officials said the move positions Kahala Cold Stone for long-term growth, new channels of distribution, and additional acquisitions of leading brands. The merging of both companies, which have traditionally been franchise-centered brands, will also establish further entrepreneurial opportunities for business owners and franchisees, officials said.
"Kahala Cold Stone will carry on our mutual dedication to making franchisees successful by enhancing profitability, and will improve both organizations' business potential through increased purchasing power, real-estate relationships, marketing leverage, and training know-how, among other competencies," Doug Ducey, the chairman and CEO of Cold Stone, who has been named CEO of the newly formed company, said in a statement.
According to Jordan Levine, an area developer for Cold Stone in Massachusetts, the result of the merger will be especially lucrative for Cold Stone franchisees in well-developed areas such as California, where store expansion is virtually at its limit. "As Cold Stone becomes mature in other markets where there are not too many options to grow, franchisees have access to a whole other portfolio of brands to choose from if they want to grow their business," Levine said.
Cold Stone Creamery, a three-time Inc. 500 company and third-largest ice cream concept in the United States, is known for its unique ice cream experience that allows customers to create their own ice-cream flavor from a variety of ingredients that are mixed together on a cold granite stone. Kahala has acquired brands for 19 years and currently owns 11 quick-service restaurant brands that are commonly found in food courts and strip malls.
Kahala Cold Stone, which will be headquartered in Scottsdale, Ariz., will also include: TacoTime; Surf City Squeeze; NRgize Lifestyle Café; WaffLO; Frullati Café and Bakery; Ranch 1; Rollerz; Samurai Sam's Terriyaki Grill; V's Barbershop; and Cold Stone Creamery.
"Through this merger, two great franchising powerhouses have joined forces to leverage the best each has to offer to the benefit of our brands, franchisees, and consumers," Kevin Blackwell, founder and CEO of Kahala, who will now serve as chairman and chief strategist for Kahala Cold Stone, said in a statement.