Franchise Buying Guide

Fast-Food Franchises Get Fresh

Salad, Anyone?
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Guidant Financial specializes in helping entrepreneurs purchase new franchises using their retirement funds.

These days, it seems like there's nothing greener--both in menu items and in profits--than salads. Salad restaurant Tossed, for one, caused a stir in New York City when the first location opened to 45-minute-long lines in 1998. Not only does this franchise offer fresh food--it delivers a special twist by making salads the main dish.

Featuring more than 70 ingredients and 25 dressings, Tossed received such acclaim in New York City that, in 2004, it attracted the attention of two investors searching for an enticing franchise concept. "We were looking for a unique, fresh alternative to what's out there now," says Jason Chodash, one of the investors and the current executive vice president of Tossed. "Tossed is very different from other concepts that people were offering."

The fact that founders Marc Meisel, 36, Adam Cohen, 37, and Daren Herzberg, 36, had created such a specialized salad concept that not only survived but thrived in New York City was another winning point. "When it comes to the actual menu and how it was designed eight years ago, these guys were before their time," says Eric Schmitt, president and CEO of Tossed. There are currently three Tossed locations, with a fourth due to open in September. The four locations are projected to bring in $4.2 million in 2006.

It seems that Tossed has just the right mix of ingredients: a solid brand, high consumer demand and investors bent on spreading the brand far and wide. The focus for expansion will be on area developers in major cities with the right demographics and real estate. Projections are ambitious for the years to come: 200 restaurants within five years and 1,000 U.S. locations in the long run.

"The biggest population today is the baby boomers, and the baby boomers are getting away from the fast-food environment," says Schmitt. "Whether we're achieving it or not, we're all trying to keep our waistlines a little bit smaller and live healthier lives."

Fresh Perspective
So what is it like for a franchisee to be in a market on the verge of such incredible growth? Mitch Tucker, 52, opened his Salad Creations franchise in Columbus, Ohio, in October 2005. So far, his is the only location in Ohio, but that will change soon. As an area developer, he will help spearhead the opening of 50 Salad Creations locations in Cincinnati, Columbus and Dayton, Ohio, over the next seven years. Banking his future on salads feels right to Tucker. "No matter what is fashionable in the diet craze, a salad always fits," says Tucker, who was previously a corporate sales manager. "As carb-free and fat-free come and go in their trendiness, there's always a place for a salad." Another factor that gives Tucker faith in his investment is that even the largest fast-food chains are offering fresh alternatives.

Tucker's franchise is less than a year old, but it already has a healthy lunch crowd and is attracting a number of repeat customers. His success secrets? Location is crucial, so seek out the advice of food-service operators, he advises. If your ultimate plan is to be a multiunit operator, bring someone in as a manager from the beginning--this will make it easier to slip away later. Finally, make sure to overbudget: "There's always a file full of surprises along the way that you just don't have control over, so project and plan and budget, and then beef it up," he says. Tucker pro-jects 2006 sales to exceed $500,000, which matches the franchisor's estimates for what an average location will make--between $500,000 and $1.2 million per year.

Healthy Future
The light is set to green for all things fresh, and there's a group of budding franchisors taking it upon themselves to spread the message--and specialize in providing the product. However, to grow at the speed they desire, they are looking for the right franchisees to take the baton.

"The [fresh-food] trend is nowhere near the cusp of where it's going," says Allen, who reports that in one month alone, he has received a half-dozen inquiries from startups looking to open healthy fast-food restaurants. "[The trend] is going to continue to grow at double-digit percentages over the next several years. You're finding it in all segments of the restaurant industry: fast food, casual dining and fine dining."

The simple fact of the matter is that fresh food is something all consumers desire. Says Balzer, "It's very, very popular in our lifestyles." With that kind of demand, the opportunities are limitless.

Prefer to Pass on Fresh Food?
Hop on the eBay bandwagon, and join a fast-growing franchise category.

According to eBay's official figures, as of March 2006, the site had 193 million registered users worldwide. If that stunning number is any indication, eBay won't be going anywhere anytime soon--and neither will eBay drop-off stores. In other words, the opportunities to help eBay sellers list, photograph, sell and ship their secondhand merchandise are bigger than ever. Not convinced? iSold It LLC made Entrepreneur's 2006 Hot 100 list as one of the fastest-growing businesses in the nation. And several other eBay drop-off store franchises, including QuikDrop and Snappy Auctions, are on the lookout for franchisees.

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This article was originally published in the July 2006 print edition of Entrepreneur with the headline: Fresh Picks.

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