In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Saladworks franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Saladworks 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 Saladworks franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Saladworks’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average net sales for the 84 franchised Saladworks restaurants that were in operation during the entire 2016 calendar year and were open 7 days a week during typical operating hours, grouped according to level of net sales ($1,000,000 and above; $850,000 to $1,000,000; $700,000 to $850,000; $550,000 to $700,000; and $550,000 and below)
- 2016 average food and paper costs, hourly labor costs, rent, utilities, and insurance (as a percentage of average net sales) for the Tiers 1-5 franchised Saladworks restaurants that were in operation during the entire 2016 calendar year and provided cost information to the franchisor for the full 12-month period
Section I – Background Information
15 Things You Need to Know About the Saladworks Franchise
Implements Major Brand Changes
1. As Saladworks celebrated its 30th anniversary in 2016, the brand also made several changes that included executive team announcements, menu enhancements, interior design upgrades, and the implementation of a strengthened loyalty program put in place to reward top fans.
2. In early 2016, Patrick Sugrue was named the new CEO and is credited with breathing new life into the brand. Saladworks’ biggest changes included a completely new restaurant design, integrated technology through the loyalty program, a kiosk ordering system, and menu improvements that highlight superfoods and clean protein.
3. According to Sugrue, “In 2016, we really took a step back and figured out ways to improve upon the Saladworks concept to enhance the consumer’s experience. It has definitely paid off – our year-over-year same-store sales jumped eight percent over 2015, which is quite impressive considering the current atmosphere of the quick-service space. In 2017, we’re going to begin implementing these changes in all locations so that Saladworks as a brand will be giving guests an enhanced experience, including faster service and the ability to refresh, reconnect and recharge.”
4. At the time of a press release from early 2017, Saladworks said that it had planned more than 10 remodels, which feature a more welcoming atmosphere through earthy tones and wood finishes. The updated stores will also have electrical outlets conveniently located near tables so that guests might be inclined to stay longer with their laptops, or at least have the option to recharge their phones during their lunch hour.
5. When Sugrue joined Saladworks, he appointed a previous associate, Andy Revella, as the brand’s new executive chef. Under Revella’s direction, Saladworks has added more fresh, in-demand items to the menu, like kale and quinoa. He also introduced a rotating menu of seasonal offerings.
6. Another major change was the addition of the Saladworks Life Bar kiosk, unveiled at the company’s corporate-owned store. The Life Bar kiosk is a self-service kiosk where customers can personalize their orders, resulting in a heavy focus on dietary needs while also giving guests a create-your-own ordering experience from start to finish.
7. While more locations undergo remodels, Saladworks will be providing franchisees with a food truck, minimizing the effects of the remodels on both employees and customers.
Chooses New Point-of-Sale System
8. As Saladworks continues to implement major brand changes across its entire system, it has searched for a technology partner that could deliver the company’s vision of a cohesive presence across all of its channels. At the beginning of September, Saladworks announced that it had chosen Dovetail Systems, Inc.’s Gusto Point-of-Sale (POS) system as its new digital platform.
9. The Gusto POS will give Saladworks the ability to manage and grow its chain through a cross platform customer engagement solution that offers a unified online and mobile ordering system, in-store kiosk, and traditional POS platform. The new system will eventually be installed at every Saladworks location.
10. Saladworks CEO Patrick Sugrue said, “As we examined every aspect of technology at our locations, we knew that we needed to have a uniform option to benefit both our franchisees and guests. We reviewed many potential solutions, but we selected Dovetail’s Gusto system because we felt that it was the best option to meet our needs.”
Plans to Expand Into Atlanta, Georgia
11. In late September, Saladworks announced plans to enter the Atlanta, Georgia market with franchisees Douglas Anthony and Ramjit Handa, as well as open corporate-owned units in the area. Saladworks based its decision to target Atlanta on data collected by Forum Analytics, a CBRE company that helps chains decide where to open based on market research, business analytics, and data science. With the data from Forum Analytics, Saladworks determined that Atlanta, followed by Dallas, has the right demographic and cultural make-up for the brand’s target audience.
12. According to Patrick Sugrue, Saladworks’ CEO, “There’s boundless potential to build Saladworks throughout Atlanta and expand our national presence. It’s an open territory in a city that’s poised for greater business growth and a ripe opportunity for anyone looking for a business that is on trend through its targeting of millennials, implementation of technology and ability for guests to personalize and customize their meals.”
13. Saladworks was founded in 1986 by John Scardapane in Cherry Hill, New Jersey. Scardapane wanted to offer consumers fresh, made-to-order entree salads as a healthy alternative to fast food. The success of the first store led Scardapane to open more locations in New Jersey and Pennsylvania. Franchising began in 2001 and by the next decade, there were over 90 locations across the U.S.
14. Despite the company’s growth, Saladworks filed for Chapter 11 bankruptcy in 2015. To save the business, Centre Lane Partners acquired Saladworks in the summer of 2015. Paul Steck, Saladworks’ president at the time, was promoted to CEO, replacing Scardapane. Since then, the company has been making changes to help aid its growth. There are currently over 90 locations in 12 states and two countries.
Entrepreneur’s Franchise 500
15. Saladworks did not rank on Entrepreneur’s Franchise 500 list in 2018.
Section II – Estimated Costs
- Please click here for detailed estimates of Saladworks 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 Saladworks’ 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
- This Item contains the following historical sales and cost information:
- (1) the average Net Sales of 84 Saladworks franchised restaurants in operation during the entire 2016 calendar year; and
- (2) some of the average costs of 53 Saladworks restaurants, grouped by Tiers 1-5 and operated by various franchisees during the entire 2016 calendar year.
- The data used in preparing this financial performance representation was compiled from information submitted to the franchisor by the franchisees in their unaudited sales reports and short-form profit and loss statements for their franchised restaurants.
- While the franchisor believes that these sales reports and short-form profit and loss statements contain accurate information, the franchisor has not independently verified the information.
Part 1 – Average Net Sales of 84 Saladworks Franchised Restaurants in 2016
Net Sales for Fiscal Year Ended December 31, 2016 for 84 Franchised Restaurants
- Franchisees operated 90 Saladworks restaurants during the entire 2016 calendar year. Of those restaurants, 84 were at standard locations that were open 7 days a week during typical operating hours, and 6 were at downtown or similar locations that typically were open only 5 days a week during limited operating hours (sometimes just 11 a.m. to 3 p.m.).
- This Item shows the average Net Sales of the 84 restaurants that were open 7 days a week during typical operating hours.