SumoSalad gets a fresh start after voluntary administration

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Inside Franchise Business: Sumo's Barangaroo outlet in SydneyLuke Baylis is back in charge at SumoSalad, heading up the healthy fast food chain after putting the business into voluntary administration in July this year.

“We’ve had a full bill of health. The team have been incredibly supportive, they are very passionate. It’s been a tough time but it’s been incredibly positive and a fresh start for us,” Baylis told Inside Franchise Business.  “We’ve had legacy issues, this gives our business the ability to remove those legacy issues and create a really strong platform that doesn’t divert us from moving the business forward.”

Undertaking the 35 day Deed of Company Arrangement process was an intensive way to tweak and restructure the business, he said.

Significant improvements in profit and cashflow had been made ahead of the voluntary administration but free working cashflow was tied up dealing with legacy issues, he said. The ability to disclaim any non-viable contracts, including leases, and to clear areas of business not generating sufficient return was invaluable.

“This gave us the ability to redeploy the profitability into future business. This is where we’ll see huge growth and rejuvenation.”

A vocal naysayer of the food court model, Baylis has been working on taking the business into other arenas. 

“As one business model gets disrupted, you have to shoot a few test shots out. One of the things that’s worked incredibly well is the wellness cafe.It’s providing people seeking healthier food opportunities with breakfast, lunch and dinner options in an upmarket manner, it’s very strong,” said Baylis.

Wellness cafes

Sumo has been trialling wellness cafes to good effect - he reports a 261 per cent growth on the food court model.

It offers higher transaction value, day parts, a strong customer experience and association of the brand.

“Such a huge improved turnover line makes this a very viable model which we’ve refined over the last 24 months.”

The changes to a broader menu offering prompted a refinement of the branding: the word Salad will be dropped from future stores. Baylis reported the name Sumo scored very highly in customer awareness.

“It’s leveraging that, rather than the affiliation with salad. We are promoting healthy and fresh as two pillars in a more diverse offering. There’s huge growth opportunity within this, this is a very elevated offering.”

When it comes to site locations airports, hospitals and universities are in the mix, but so too are shopping centres.

“We’re not walking away from shopping centres, we’re walking away from food courts,” Baylis explained.

Current stores will be converted to the wellness cafe model over time as franchise agreements expire.

“We want to reposition stores in the new format, build up franchisee skill sets and keep the best operators.”

Franchisee support

Baylis is full of praise for the “incredible bunch of franchisees” that have held true to the Sumo philosophy and kept the dream alive by focusing on their businesses and delivering good customer service.

“Despite what we see, when you’re doing a restructure there is always a degree of fear and uncertainty. Franchisees have been focused on how do we make it better, how to make it an amazing brand.

“Our sales are 14 per cent up which is unprecedented in the industry, all off the back of our franchisees focusing on customers.”

Baylis is taking another route to market based on the trust consumers have in the Sumo brand. The ready meal market is the next new arena for the brand to dip into, with meals to be distributed through Sumo outlets and at grocery and convenience store level.

“We have customer permission and credibility in the meal space,” he said.

Sarah Stowe

Sarah Stowe heads up the editorial in the Inside Franchise Business group at Octomedia. Sarah is a hands-on editor who has worked in consumer and B2B titles in UK and Australia and she has been editor of the View More...
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