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    Kahala Corp.

    9311 E Via De VenturaPhone: +1-480-362-4800
    ScottsdaleAZFax: -
    85258
    United StatesMap Map This Company
    http://www.kahalamgmt.comHoover's coverage by Michael McLellan

    History

    In the early 1980s, Kevin Blackwell moved from Spokane, Washington, to San Jose, California, to focus on his triathlon training and surfing. When the homemade smoothies he used in training caught on among his peers, he opened a few concessions in nearby health clubs, and in 1988 he named his smoothie brand Surf City Squeeze. Blackwell had not intended on developing the brand beyond that level, but the demand for Surf City franchising opportunities from prospects was too great -- Surf City began franchising in 1994.

    Blackwell took note and wanted to expand the business, yet rather than pursue an IPO he chose a different route to the stock market: a reverse merger. (A reverse merger permits a company to assume the identity of a company that has ceased operations but still legally exists.) Blackwell's company became SGI (after Sports Group International, which had sold Spalding-branded sports beverages) and began looking for new concepts to acquire.

    In 1999 SGI acquired Frulatti Café & Bakery, an 85-unit Dallas-based chain of smoothie stores. It also received an investment from Robert Peterson, who had built the Peterson Publishing empire of automobile and special interest magazines (later sold to UK publisher Emap). The following year Blackwell separated his company from SGI's existing management shell, taking the company name with him. Next, it opened Tahi Mana, a juice and vitamin bar concept in San Francisco health clubs -- but despite decent growth of the bar, Tahi Mana dissolved when the health club chain changed owners.

    In 2001 the company changed its name from SGI to Kahala in tribute to a stretch of Hawaiian coastline (named Kahala) where Blackwell used to surf. The company then prepared its Rollerz wrap-sandwich store concept (quietly purchased by Blackwell's wife some years before) for franchising, opening six units within a year. In 2001 Kahala bought then-bankrupt chicken restaurant Ranch*1, a deal that immediately extended the company's national operations all the way to New York.

    Kahala delisted and went private the following year, because private investors (rather than the rigors of the public market) were easier for the company to work with and utilize. The company proved its point in 2003, picking up the fast-casual 52-unit chain Samurai Sam's Teriyaki Grill. This acquisition provided Kahala with the market presence needed to purchase Taco Time, a 290-unit chain with stores in Canada, Puerto Rico, and the US.

    CEO Blackwell and Kahala continued the company's ambitious string of acquisitions by gobbling up Great Steak & Potato in 2004. That same year the company opened a food court development in a Utah mall featuring only restaurants from its portfolio of concepts; two similar food courts were opened in Chicago the next year. In 2006 Kahala acquired the Blimpie sandwich chain from Blimpie International. The deal nearly doubled the size of Kahala's holdings.

    In 2007 the company purchased leading premium ice cream chain Cold Stone Creamery. Robert Peterson died that same year.

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