Philadelphia Business Journal: Saladworks looks to open as many as 20 new locations in suburban Philadelphia, New Jersey

Conshohocken-based Saladworks is looking to expand in the Greater Philadelphia and New Jersey suburbs despite Covid-19.
By Laura Smythe – Reporter, Philadelphia Business Journal Nov 3, 2020, 6:00am EST

Conshohocken-based fast-casual chain Saladworks is setting its sights on franchise expansion in its core markets of Greater Philadelphia and New Jersey as the company continues to open locations despite Covid-19.

Saladworks, which was founded more than 30 years ago in Cherry Hill, is aiming to launch between 15 and 20 new franchises in the region over the next nine months, Vice President of Franchise Development Eric Lavinder told the Business Journal. The brand is particularly eyeing New Jersey locales including Phillipsburg, Flemington, Ewing Township, Princeton, South Brunswick, Burlington Township and East Windsor, and the Pennsylvania towns of Trexlertown, Quakertown, Royersford, Fort Washington, Media and Springfield.

The national chain, which has upwards of 100 locations, has already debuted 28 new stores in 2020 with a few more slated to open. More than 20 new deals are in the pipeline for 2021. This week Saladworks also opens its first location in Canada, which will operate as a ghost kitchen, meaning it will exclusively offer takeout and delivery. Saladworks has 10 stores scheduled to launch in Canada this year, Lavinder said.

The company decided to refocus on its home markets when the Covid-19 pandemic pressed pause on travel, effectively thwarting tourists from coming into Greater Philadelphia and becoming newly acquainted with the brand, Lavinder noted. Saladworks locations are concentrated in Pennsylvania, New York, New Jersey, Maryland and Delaware.

Saladworks found a “silver lining” in going back to its roots and focusing on further growing brand awareness in the region, he said. With uncertainty around when office workers will be returning to work in the city, Saladworks is honing in on more suburban markets.

“We haven’t sold out our core market,” Lavinder said. “That is a huge missed opportunity for the growth of the brand.”

Saladworks has been “very lucky” in weathering the coronavirus storm, he said, because it falls into a niche that is “the right concept at the right time.” The fast-casual chain is not full-service and didn’t heavily rely on indoor dining pre-Covid. The food also travels well, Lavinder said, and falls under the healthy food umbrella, which he characterizes as “a huge growth category in the marketplace.”

Before the pandemic hit, third-party delivery and online takeout ordering were already substantial revenue drivers for the company, according to Lavinder. Only about 35% to 40% of customers were actually eating in stores, so Covid-19 dining capacity restrictions didn’t change much, or guests elected to order food via the digital channels.

About 80% of the company’s locations remained open when Covid-19 hit, though some operated in a limited or online-only capacity. Now nearly all of the stores are back open, Lavinder said, except for a small number in “captive audience locations” such as malls or airports.

The cost of operating a single Saladworks restaurant ranges from $210,607 to $534,084, according to the company’s website. The initial franchise fee for a single location is $35,000.

When asked about potential franchisees being wary of entering the hospitality industry during the public health crisis, Lavinder recommended they evaluate the need for the product, consider the strength of the brand and food niche, and determine how the company aligns with their own morals, goals and preferred food type. On a larger scale, he noted he’s optimistic about the company’s future as he anticipates the restaurant sector to rebound “stronger than ever” once the pandemic subsides.

“When you come back out of the stay-at-home we’ve been doing, there’s less restaurants, less choices … than there was before,” Lavinder said. “That only puts in more demand for products that are actually open.”

As Saladworks continues to develop its franchise arm, the brand seeks to diversify its locations by opening ghost kitchens as well as shops within grocery stores or at universities and military bases.

The company is particularly noticing demand in the grocery store segment, Lavinder said, as many grocery stores are looking to provide a healthy grab-and-go option. During Covid, that demand has only increased as many grocery stores had to close down their own salad bars under coronavirus guidelines.