Gathered in a conference room freshly painted lime green, the three entrepreneurs behind The Cereal Bowl eye a wall map of the United States studded with yellow, blue and white thumbtacks.
The blue cluster around Washington, D.C., represents 16 new Cereal Bowl stores that are already under contract. Others, scattered south and as far west as Texas, are franchise deals in the making.
When The Cereal Bowl opened its doors on 1560 S. Dixie Highway 16 months ago, the trio behind the venture (twin brothers Josh and Kenneth Rader, 25, and their childhood friend Michael Glassman, 26) were hoping to prove that customers would be willing to fork over $3 for the opportunity to mix and match 40 different kinds of breakfast cereal and dozens of toppings -- from healthy fresh fruit to decadent cookie dough.
Set amid plush couches and abuzz with strong coffee, yogurt parfaits and other treats, the Bowl quickly became a haunt for cramming college kids, early morning commuters and grass-stained Little Leaguers.
Now the South Florida start-up is hoping to prove its simple concept is popular enough to capture a national audience and take on the industry front-runner, Chicago-based Cereality.
The Miami Herald first started following The Cereal Bowl in October 2005 when the newly minted grads were struggling to turn their business plan into reality. The paper followed them for a year, documenting them as they scored successes and wrangled with permitting and construction woes, health insurance and marketing hassles.
When the series ended, the trio's office was little more than a cramped storage closet at the back of the café, crammed with boxes of Froot Loops and Captain Crunch. They were just starting to turn a profit and dreaming of spinning The Cereal Bowl into a national brand.
MAKING IT HAPPEN
As their new leased office and the tack-laden map suggest -- those dreams are starting to materialize. The Cereal Bowl recently signed its first franchise agreement with Maryland-based real estate developer Mel Silicki and his business partner. They have committed to opening 16 stores in the Washington, D.C. metropolitan area over the next eight years and hope to have the first store up and running by winter, said Silicki.
"It's just a very new and young concept and we think it has a lot of potential, " he said.
Silicki and his partner first approached Cereality, but found The Bowl trio were more responsive and hands-on. The fact that Josh, Kenneth and Michael were closer to his age (Silicki is 34 and his partner is in his 20s) also helped seal the deal, he said. "It feels kind of like an even playing field, " he said. "There is chemistry there."
The Cereal Bowl is counting on the chemistry. While it has achieved a degree of success at its first store, it will be up to franchisees to prove that success can be cloned.
Setting up a Bowl isn't cheap. The one-time franchise fee for a single location is $25,000. Owners are also required to pay a 5 percent royalty on gross revenue and a 1 percent marketing fee.
In exchange, The Cereal Bowl offers its branded, laid-back feel, its proprietary recipes, its distribution network and more than two years of know-how that the trio poured into a 300-plus page operating manual.
Because they are actively franchising, the trio can't discuss hard numbers, but Josh said sales were up about 65 percent from last year.
Some competitors have not fared as well. A handful of mom-and-pop cereal cafés nationwide have closed.
GROWING COMPETITION
Rival Cereality has six locations and is opening a seventh this week in Charleston, S.C. The company has 26 franchise contracts signed, with more under negotiation, said Stan Synkoski, chief operating officer of Cereality Franchising Corp.
Synkoski said Cereality isn't worried about the competition. "We were the first, obviously. The awareness of the Cereality brand far exceeds any brand out there, " he said. "We're the Starbucks of the cereal café."
The Bowl partners are proceeding with caution on the franchising front. While many of their friends and colleagues were encouraging them to seize last year's barrage of publicity (they were featured in Time Magazine), they are determined to be strategic about their growth.
While they are still tweaking their flagship store -- they recently began deliveries and are working on a retail wall that will feature pre-mixed boxes of cereal and other items -- Glassman said The Cereal Bowl essentially runs itself. Still, he often finds himself at the shop, studying the workings of the enterprise he helped create.
"The store really doesn't need me, " he admits. "But I still need the store."
Miami Herald reporter Angela Tablac contributed to this story.
