Line 2 round cake pans with parchment paper and set aside. (If you don't have parchment paper on hand use non-stick spray instead.)
Melt butter over medium heat in a medium saucepan. Add miniature marshmallows, reserving 1 cup for later. Stir until marshmallows are melted. Add 1 tsp vanilla and strip to combine.
In a large bowl, pour melted marshmallows over Rice Krispies. Mix together. Stir in the last cup of mini marshmallows and stir to combine.
Divide mixture into 2 bowls, putting about 2/5 in one bowl and 3/5 in another. Use food coloring to color the smaller amount green and the larger amount red.
Use the green Rice Krispies to form the rind of the watermelon by placing it around the outside edge of the cake pan. Then, fill in the center of the cake pan with the red Rice Krispies to complete the watermelon. Press the Rice Krispies together gently in the pan to make sure that both colors form together.
Add "seeds" by gently pressing chocolate chips into the red Rice Krispies.
Allow to set for 1-2 hours before slicing into wedges and serving.