How to Get Rich on Salads

The competition

At least in New York City, these days almost every other deli has a toss-your-own salad counter, and a handful of companies such as Tossed and Just Salad that have multiple stores based on the concept of salad.

"We have a huge following and people seem to connect with the brand and what we are trying to do. The business model is working, which is allowing us to expand organically," says Nick Kenner, Just Salad's founder and managing partner.

While Saladworks' systemwide sales were $81 million last year, according to Technomic, the next largest made-to-order salad provider is Nature's Table Cafe at $35 million in 2011 sales.

Regarding his franchised competitors, Scardapane acknowledges a few credible names, "but I think they're still in their infancy, where they haven't gone through any growth pains yet," he says.

Once his company started franchising, it took years to build the most efficient infrastructure, he says. For one, Saladworks sells franchises starting at a three-store minimum. "We don't want to go to a market and do one store. We try to piggyback and get more three-store deals."

"The biggest challenge for us is to find the right real estate," he says. "We're not going to approve a site we wouldn't put our house on the line for. If you go with that attitude and really look, there are very few franchises. It's all about the location."

Early research surprised the co-founders by showing high-end sandwich shops such as Panera Bread, Cosi-- and fast-food chains including McDonald's -- wasn't their direct competitors. Instead, it was high-end food markets such as Wegman's and Whole Foods.

"It was a surprise to us," Scardapane says. "We didn't consider them a direct competitor, but apparently they are."

Saladworks is looking to develop eventually from coast to coast. The company awarded agreements for 73 locations to new and existing franchisees last year, allowing the company to expand to Washington State, Louisiana, South Carolina, Texas, Florida, California, Arizona and Washington, D.C.

Saladworks is also expanding internationally. It awarded its first 15-store development contract to a franchisee out of Singapore.

"We're ready to take this model and use it everywhere," Scardapane said in the January release.