SumoSalad’s merger announced this week is pitching the healthy fast food franchise into online delivery. Inside Franchise Business spoke to the pioneers behind the two brands to find out more.

Luke Baylis, founder and CEO of SumoSalad, said of the merger “We’re working through and expect the terms to be complete by Christmas. We want it to move quickly but be controlled. We don’t have a deadline.”

Baylis has directed his brand’s move out of the traditional retail spots and had been trialling new ways to deliver healthy food across Australia before re-setting the business through voluntary administration and a Deed of Company Arrangement.

Josh Sparks, founder and creator of omnichannel Thrive, has been forging his own path with a meal plan and fitness program based on performance and weight loss.

Both leaders will have roles within the joint business and each will have an equity stake.

When it comes to decision making though, the power lies with Baylis says Sparks.

“This is Luke’s ultimate decision. Organisationally Luke is CEO and will bring in entrepreneurs who believe in his vision. I think this is a very substantial opportunity. The sayings that you have to be first, that the winner takes all, that’s just not true.

“This is a maturing market and there are one, two and three places and all the rest. We don’t think we have to be in a mad rush to scale, we’re talking about food, regulations are more rigorous. Over two to three years, the industry trends have been significantly outperforming retail generally and it will continue to accelerate.”

The recently announced merger is the first step in the creation of what Baylis calls a house of wellness, bringing together complementary brands which have a clear point of difference.

“Thrive is very distinct, Josh has built a brand around performance and weight loss. Our customer may eat at both so we want to circle the customer.”

It also gives the franchisor access to technology and new delivery channels to grow the business.

New food delivery channels

Baylis sees the combined forces of the brands as a viable grocery offer in the healthy food space. A grocery presence will extend the brands’ reach to a broader customer base.

The launch of Sumo Well ready meals has been “significantlly better than forcast”, he said.

Initial forays into wholesale are expected to generate good revenue, and to provide valuable data insights that will inform the delivery of the e-commerce initiative where the long term potential lies.

Sparks can bring online delivery expertise to the business.

Says Baylis “We will aggregate the direct channel that Josh has built. We can set it to layer different brands. It’s incredibly exciting. Over time this could be the bigger side of the business.  Josh is leading the business in this field.

Sparks sees this as a pivotal moment for his six-year-old brand which is relinquishing its retail footprint in the merger, putting the subsidiary that runs the nine-stores into voluntary administration.

“I’m pleased we went into retail, we gained a presence and established a customer base of progressive customers who were aware and keen to be proactive. We developed products based on nutrition and evolved into omnichannel. We did research into meal plans, setting an exercise nutrition program against the government standards.”

Retail evolution

Baylis confirms there will be some consolidation of retail outlets where there is a double-up. He has already begun the slow migration of SumoSalad to Sumo wellness cafes which marks the evolution of the bricks and mortar stores.

Consumers can expect to see Thrive meals featured as pop-up stores within Sumo outlets.