Cereality Franchise Closes in 3 Months; Breaks Previous Record
October 3, 2007 by Sean Kelly
Filed under CEREALITY, xBuyer Beware
(FranchisePick.Com) It’s been an banner year for trendy cereal cafe franchise concept Cereality.
In May, 2007, the Evanston, IL Cereality set the company’s speed-failure record by closing its flagship store in less than six months.
In July, Kahala-Cold Stone Creamery (aka Bad Ideas in a Bowl Corp.) acquired the Cereality concept, and immediately announced a growth initiative that included closing two stores which were already closed.
Just when it seemed unlikely anyone could break the 6-month failure record, the Charleston, S.C. 
franchise location pulled off the impossible by opening July 1, 2007 and closing by October 1, 2007.
To put this feat into context, the Cereality corporate website still has the Charleston, S.C. location listed as “NOW OPEN!!” [See right]
Charleston.Net reports
After a short but sweet stay on upper King Street, Cereality has closed.
The quirky casual dining spot — situated just north of the Francis Marion Hotel at 401-B King — offered more than 30 cereal brands and 40 toppings in a “home kitchen” atmosphere.
But local franchisee Tom Guidera said the place wasn’t drawing enough customers to stay afloat. While it attracted a decent breakfast crowd, business was slow the rest of the day, he said.
The idea “was a great concept on paper,” he said. “At that location, it just didn’t work out.”
Founded in 2003, the Cereality company recently was acquired by Scottsdale, Ariz.-based Kahala-Cold Stone, which owns a host of quick-service food franchises, including Cold Stone Creamery ice cream shops, Blimpie sub shops and Great Steak & Potato Co.
Shortly after the acquisition, Kahala closed two Cereality locations in Chicago and Evanston, Ill.
In a July interview with trade magazine Restaurants & Institutions, Kahala Chief Executive Doug Ducey said the company had faith in the brand and planned to add more stores in the future…
Ducey also stated that, in and R&I interview, “As you reach the 30 to 50 mark in terms of stores, you get a good handle on what works and what needs to be fixed,” and that their strategy was to have franchisees open those franchise - and assumedly bear the “trial and error” most people buy a franchise to avoid.
Ironically, CEO Doug Ducey also didn’t work out: Kahala-Cold Stone CEO leaving job after 12 years.
The question is: Will Kahala-Cold Stone Creamery continue to sell franchises for a concept that clearly isn’t working?
Cereality Blogliography
July 26, 2007 How ‘Bout a Stone Cold Bowl of Reality? (FranchisePick.Com)
July 23, 2007 Cereality Growth Begins By Shutting Two of Seven Stores (R&I)
July 17th, 2007 Can Kahala Cold Stone Put Some Reality in Cereality? (FranchisePick.Com)
July 13th, 2007 Reality, Surreality & Cereality (FranchisePick.Com)
July 12, 2007 The Cereality Acquisition: Big Ideas Live (R&I)
June 27th, 2007 Trendy Franchise Concept Gets Cereality Check, Closes Store(s) (FP)
Source articles:
May 23, 2007 Specialty Cereal Eatery Boxes Up Bowls, Spoons (Daily Northwestern)
March 28, 2006 New cereal-serving restaurant expects to bowl over Evanston (Daily Northwestern)
Company website: Cereality.Com
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Boy am I surprised! And to think that a Cereal-Only restaurant wouldn’t be thriving!
Franpro
The Franchise King Blog
{ Why don’t these Franchisors call folks like myself, Jim Coen, and Sean Kelley, BEFORE they put a conceptual idea into place and blow all that $$?}
The rats are jumping from the ship as hundreds of Cold Stone locations are now collapsing around the US. Why? Because the “concept” of mixing stuff into ice cream has always been a fad, and the fad is now over. The product isn’t that good, is grossly overpriced, and consumers are flocking back to properly formulated ice cream from other chains like Baskin Robbins and Ben & Jerry’s.
The Cold Stones have been largely sold to Yuppies with too much equity in their homes, who jumped into the stores to be “business owners”. But since the labor costs are double the competition, and stores are too big and too expensive to run, the number of unprofitable stores is skyrocketing with the results we have here.
Cold Stone is having massive problems. From what I’ve heard, the company HQ just had their third round of layoffs. Being a privately-held company, this stuff doesn’t get reported.
The Cereal Store stopped me in my tracks when I saw a build-out of one going on just outside of downtown Cleveland. I just stared and then I started to laugh and shake my head.
Even I thought it was a stupid idea…come to think of it, I don’t know if that place ever opened.
Please Kelly,
Don’t mention Cleveland and Cereallity in the same sentence. We have enough problems here.
Joel Libava
The Franchise King Blog
NEObizblog.com {also}
Kelly:
Did you notice that your favorite company owns Cereality?
I think we’ve found the ultimate franchise concept: The Cereal Assembly Kitchen franchise!
We can open the first one in Westlake, OH (I didn’t say Cleveland).
Joel can it as home base to sell our franchises. $30K franchise fee - split three ways… what do you say?
I’ll market them, Joel can sell them, and Kelly can come up with the weekly recipes!
Laila Fields bet her house that a Cereality cereal cafe franchise would be a hit in Santa Cruz. FranchisePick.com readers are invited to bet on how soon she’ll realize what a bad, bad bet she made.
Place your vote on how long you think the Santa Cruz Cereality franchise will survive.
The Cereality Franchise Dead Pool: VOTE NOW!
Thank you both for my chuckle for today!
K
Yes, I did notice that Stone Cold Creamery(not a typo) owned it as well!
K
Sean,
What a fantastic idea! You are a genius-level blogger. I will never call you and your blog the “Harold And His Purple Crayon Blog” ever again.
And Sean, call me sometime.
JL