The announcement by Kahala-Cold Stone says that the combined brands already generate more than $1.1 billion in yearly system-wide sales in partnership with more than 3,000 franchisees and more than 4,600 retail locations in 15 countries worldwide. One of the advantages of the new arrangement, according to Kahala-Cold Stone, is that it will create the opportunity for existing franchisees to diversify their business without straying from a familiar franchise system.

Kevin Blackwell, Kahala Corp.'s founder and chief executive officer, will serve as chairman of the board and chief strategist of Kahala-Cold Stone, which will be headquartered in Scottsdale. Doug Ducey, Cold Stone Creamery's chairman and chief executive officer, has been named CEO of the newly combined firms. Besides expanding the reach of the existing brands, Blackwell says, the combined company will be well positioned to further develop its portfolio through acquisitions of other brands. In addition, combining the two businesses "opens up options for new sources of future funding, including a potential public offering," Blackwell adds.

Kahala has acquired a roster of brands since 1998, often in the early stages of their development. Also in 1988, Cold Stone Creamery opened its first store, in Tempe, AZ. The merged company's brands will include Blimpie, Cold Stone Creamery, Frulatti Café and Bakery, the Great Steak & Potato Company, Johnnie's NY Pizzeria, NRgize Lifestyle Cafe, Ranch 1, Rollerz, Samurai Sam's Teriyaki Grill, Surf City Squeeze, Taco Time, V's Barbershop and WafflÔ.