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...Although Roth and co-founder Rick Bacher initially saw themselves as little guys leaping into a cutthroat restaurant world when they opened their first store in 2003, they have in a sense become Goliaths. They have even partnered with giants like Dodge, Old Navy and Quaker. To protect itself, Cereality has applied for trademarks for its name and about 50 slogans it uses in signs and ads. (Be careful next time you say, "It's always Saturday morning," or ask over the breakfast table, "What's in your bowl?") It has also applied for patents covering dozens of business processes...

Author: /time Magazine | Title: Small Business: In a Real Crunch | 5/28/2006 | See Source »

...Roth says that Cereality, which is nearing national expansion and has 46 employees, is in a different league from the Cereal Bowl, a small shop run by recent business school graduates. He welcomes healthy competition, though. "We're happy to see competitors show up to serve cereal away from home, because it adds legitimacy to the idea," he says. But when others imitate Cereality's slogans or serving buckets, Roth says his responsibility to investors requires him to fight back. And any company that files a patent application, Roth notes, is obligated by law to inform potential rivals...

Author: /time Magazine | Title: Small Business: In a Real Crunch | 5/28/2006 | See Source »

...Florida launched a "Cereal Solidarity" campaign last summer on the website freeculture.org criticizing Cereality for bullying rival restaurants with those warning letters. The protests led to an online petition--drawing hundreds of signatures--calling for an end to business-method patents and asking Cereality to withdraw its patent application. Roth says the group is more concerned with ideology than cereal toppings. "Freeculture turned Cereality into a poster child for anti-patent protest," Roth says. "We're just two guys trying to protect ourselves from big companies that could steal our intellectual property...

Author: /time Magazine | Title: Small Business: In a Real Crunch | 5/28/2006 | See Source »

However absurd the cereal wars may appear, Roth says he is simply trying to act before the really big guys muscle in on his highly expansible idea. "Starbucks could easily start selling cereal, catering to a sophisticated palate, to complement their coffee," says Laurence Knight, president of Fletcher-Knight, a marketing consultancy based in Greenwich, Conn...

Author: /time Magazine | Title: Small Business: In a Real Crunch | 5/28/2006 | See Source »

That's another reason Cereality is trying to grow as quickly as possible, through franchising, partnerships with hotels and other retail chains, online sales and catering. The Cereality concept has generated so much buzz that Roth and Bacher say they have received more than 6,000 applications from all over the world. In April, Roth and Bacher began meeting with applicants to select the first operators, and they hope to have 30 new partners by 2008, with each running several restaurants. The Cereal Bowl, for its part, says it has collected 250 e-mail inquiries about franchising...

Author: /time Magazine | Title: Small Business: In a Real Crunch | 5/28/2006 | See Source »

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