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Location, location: Sumo Salad on the street

Sarah Stowe

Luke Baylis, co-founder of healthy takeaway franchise Sumo Salad, reports no difference in finding locations today than in the past. But thanks to a presence in all the better performing shopping centres the business model is now being expanded to street locations.

And the high street brings its own challenges, in addition to the standard retail site requirements. “We look at demographics, traffic flow, climatic conditions, the surrounding competition and other businesses. For instance, a cold and windy area is not likely to succeed; we need somewhere sheltered and sunny. We can’t compromise, otherwise people won’t sit outside.”

Making the numbers work is a concern, whether that’s in the initial rental agreement or through renewals.

“Rents rise every year by CPI plus five per cent so that’s a challenging component. We need to grow our sales by this much to be feasible. Our growth has been about eight per cent, however things change that you can’t always anticipate,” cautions Baylis.

The good news is that landlords now are more likely to embrace commercial rates than stick to their contractual figures, he says. “With shopping centres, if you have a portfolio with Westfield, AMP per se it is quite easy; there is consistency across legal parameters and key commercial decisions. With individual landlords we don’t have the same brand presence or power. But individual landlords have a realistic approach,” he reasons.

Integral to staying ahead has been an ongoing program of refurbishment; rather than relying on the landlords’ requirement for store design updates the company has been aggressively changing the stores to make them leading edge.