May 11, 2007 / 5:07 PM / 11 years ago

Blimpie, Cold Stone, others form franchise company

CHICAGO (Reuters) - Leave room for ice cream after your Blimpie sub sandwich.

Kahala Corp. and Cold Stone Creamery said on Friday they are merging to form a franchise company with 13 brands ranging from Blimpie to Cold Stone’s popular ice cream shops.

Kahala Corp. founder and Chief Executive Kevin Blackwell, whose company was named after a beach in Hawaii, will serve as chairman and chief strategist of Kahala-Cold Stone.

The new company, Kahala-Cold Stone, may look at buying other brands or going public, its chairman said.

Terms of the deal between the privately-held companies were not disclosed.

Cold Stone Chairman and CEO Doug Ducey will be CEO.

The combination “opens up options for new sources of future funding including a potential public offering,” Blackwell said in a statement.

Kahala-Cold Stone has more than 3,000 franchisees and more than 4,600 locations in 15 countries, with more than $1.1 billion in system-wide sales, the companies said.

It is much smaller than many other restaurant companies, such as Subway, the largest sub sandwich chain with more than 27,600 franchised restaurants in 85 countries. Subway posted $9.05 billion in system-wide sales in 2005.

Kahala-Cold Stone will be based in Scottsdale, Arizona. Its other brands include The Great Steak & Potato Company, Ranch 1 and Surf City Squeeze.

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