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FDD Talk 2017: What You Need to Know About the Salsarita’s Fresh Mexican Grill Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on October 3, 2017

in FDD Talk 2017: Food Franchises, Franchise Earnings, Mexican Restaurant Franchise



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In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Salsarita’s Fresh Mexican Grill franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Salsarita’s Fresh Mexican Grill franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Salsarita’s Fresh Mexican Grill franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Salsarita’s Fresh Mexican Grill’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016, 2015, 2014, 2013, 2012, and 2011 average annual net sales for franchised and company-owned Salsarita’s Fresh Mexican Grill Restaurants at traditional locations that were open and operating for the entire relevant period
  • 2016 average annual net sales for the top third, middle third, and bottom third of franchised and company-owned Salsarita’s Fresh Mexican Grill Restaurants at traditional locations that were open and operating for the entire year

Section I – Background Information

11 Things You Need to Know About the Salsarita’s Fresh Mexican Grill Franchise

New President and Chief Operating Officer



1.  At the end of June, Salsarita’s appointed industry veteran Ken Green as the company’s new president and COO. Prior to joining Salsarita’s, Green was president and CEO of Easy Street Restaurant Group, a successful restaurant and hospitality consulting company. He also has a long track record of success in the restaurant industry.

2.  For example, while he served as COO of the McAlister’s Deli brand, Green developed and implemented a more cost-effective store prototype and streamlined and introduced a more contemporary menu that included hand-tossed salads and a line of panini sandwiches.

3.  When talking about the future of Salsarita’s, Green said, “Salsarita’s has experienced tremendous success and I want to further build upon that foundation by focusing on improving profitability at the store level. I also want to ensure that we continue to be innovative with our delicious menu offerings and provide our customers with everything they expect when they visit Salsarita’s.”

New Restaurant Prototype

4.  In August, Salsarita’s debuted a new restaurant prototype that features its new logo and name, Salsarita’s Fresh Mexican Grill. The new store design is open and spacious and has a bright color scheme that reflects the brand’s approach to fresh food. The company says that all new locations will feature the fresher design and some will have drive-thrus.

5.  In addition to the new look, CEO Phil Friedman and COO Ken Green said that they have plans to ride Salsarita’s recent momentum and open more corporate locations. Green said, “We plan to keep going and growing at this pace and quality. If ever there was a chain that has all the components to go big, it’s Salsarita’s Fresh Mexican Grill.”



Multi-Unit Franchisees Open 15th Location

6.  In early July, HP Patel and JT Patel, owners of LAXMI Ventures, which operates Salsarita’s Fresh Mexican Grill locations in the Knoxville, Tennessee area, announced the opening of their 15th Salsarita’s location. At the time of the announcement, the Patels had nine other Salsarita’s restaurants already opened in the Knoxville area. They also own three Salsarita’s in Chattanooga, Tennessee and two in Huntsville, Alabama.

7.  The Patels are proud of the fact that their Salsarita’s restaurants in the Knoxville area are successful despite being located in an area dominated by Chipotle and Moe’s Southwest Grill, which are Salsarita’s largest competitors. Phil Friedman, Salsarita’s CEO, said that the Patels are the brand’s “largest and fastest growing franchisees” and “leaders in the Salsarita’s system.”

Company History

8.  Salsarita’s Fresh Cantina (now called Salsarita’s Fresh Mexican Grill) was founded in Charlotte, North Carolina in 1999. Franchising began a year later in 2000. The fast-casual Mexican food chain specializes in fresh, high-quality, yet affordable food.

9.  Over the years, Salsarita’s has expanded primarily in the eastern half of the United States. In 2011, Phil Friedman (current CEO) purchased Salsarita’s from its founder. Prior to owning Salsarita’s, Friedman spent 11 years expanding McAlister’s Deli from 27 to 300 units.



10.  Since taking over the company, Friedman has driven Salsarita’s growth. Today, there are over 70 Salsarita’s restaurants in the United States.

Entrepreneur’s Franchise 500

11.  Salsarita’s Fresh Mexican Grill has not ranked on Entrepreneur’s annual Franchise 500 list since 2013. The brand’s highest rank was No. 243 in 2007, while its lowest rank was No. 484 in 2012.

Section II – Estimated Costs

  • Please click here for detailed estimates of Salsarita’s Fresh Mexican Grill franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Salsarita’s Fresh Mexican Grill’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

Part 1 – Average Annual Net Sales of Traditional Salsarita’s Restaurants

  • The average annual Net Sales of Salsarita’s Restaurants at traditional locations, company-owned and franchised, for each of the years listed below, and the percentage of Restaurants surpassing the average, were as follows:

2016



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