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SMALL BUSINESS

Cereal Bowl guys pour it on

Trio of young entrepreneurs is adding a restaurant in Coral Gables and franchising nationally.

dgelles@MiamiHerald.com

In a storefront on Miracle Mile, Kenneth Rader recently flipped through architectural plans that will turn a former jewelry boutique into a colorful café, where pajama-clad servers will dish out bowls of Corn Flakes and Lucky Charms. It will be the second Miami location for The Cereal Bowl.

''Construction is the easy part,'' said Rader, surveying the dusty space. ``The hard part has been permitting, fabrication, compliance.''

The Miami Herald followed Rader; his twin brother, Josh; and their longtime friend and business partner Michael Glassman for a year in 2005-06, chronicling the young entrepreneurs as they took the Cereal Bowl from business plan to a fledgling start-up serving dozens of varieties of cereals and toppings.

STARTING AGAIN

Now the team finds themselves back where they began, scrambling to open a store in the midst of hurricane season and juggling their interconnected social lives -- with the added twist of planning a national expansion.

On Oct. 4, the first franchise will open in Newark, Del. A week later, the original Cereal Bowl, at 1560 South Dixie Hwy. near the University of Miami, will reopen after a month of renovations. And then in November, the new location on Miracle Mile will open.

The entrepreneurs also expect stores in Washington, D.C.; New Brunswick, N.J.; Birmingham, Ala.; and Orlando to open by February. All told, five teams of franchisees are preparing to open 25 stores.

Since opening the first Cereal Bowl in February 2006, the three 27-year-olds have been through deaths, marriages, and upheavals at work. But they have remained focused on their core business, serving bowls of Fruity Pebbles, Golden Grahams, Coco Puffs and other concoctions.

Now that the original store has been turning a profit for the past 18 months, they have begun to focus on expansion, which has required reinvestment of their hard-earned cash. ''We're always investing money back into the company,'' said Kenneth. ``One store can do well, but we need to grow the concept.''

As the Cereal Bowl founders prepare for expansion, they must confront this reality: other cereal bars around the country have met with only modest success.

Cereality, a Chicago-based company, once had seven locations open across the country and plans for 24 more. But expansion stalled, and Kahala, the parent company of Cold Stone Creamery, bought the chain last year. Today, there are just two Cereality stores. Other cereal bars are scattered in cities around the country, but they aren't franchising.

EXPERT ADVICE

Robert Purvin, chairman of the American Association of Franchisees and Dealers and author of Franchise Fraud: How To Protect Yourself Before And After You Invest, said he is impressed that the first Cereal Bowl store is profitable. ''These guys have done exactly what I would have suggested before franchising,'' Purvin said.

But he cautioned that The Cereal Bowl may be moving too far, too fast: ''I don't know that I would have them franchising so soon after going profitable.'' Purvin also said opening the first franchise a thousand miles from headquarters was a mistake.

For national franchises to work, Purvin said, clustering several locations is key. ''You need to group franchisees so you can take advantage of marketing synergies and distribution synergies,'' he said.

But Kenneth said South Florida and eventually the mid-Atlantic region will be their clusters. He agrees clustering will ``help with marketing, purchasing power, and brand awareness.''

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