Smart50 rank: 22
Revenue: $45,432,387
Growth: 81.06%
Founders: Luke Baylis, 32; James Miller, 34
Based: New South Wales
Employees: 54
Industry: Retail trade
Website: www.sumosalad.com
Food franchise SumoSalad is facing a tough year. After being forced to change its suppliers due to damage from the Victorian bushfires and Queensland floods, founders Luke Baylis and James Miller have faced the biggest downturn in retail sales for years.
But the business has managed to survive, with Baylis targeting health-conscious shoppers on a budget - just don't ask him about discounts.
"The downturn meant more and more people turned away from buying rather than taking food from home for lunch. Also on a franchisee level, produce and product became more expensive to buy."
"We don't necessarily believe in discounting; our price is very reasonable as it is. We feel that we're better at maintaining the quality as opposed to making any changes in regards to price points... We solved this problem by offering the five under $5. This included five options for lunch that are still healthy and nutritious, but are affordable."
While the industry is suffering, Baylis is used to adversity. SumoSalad lost hundreds of thousands of dollars when they first sold the master franchise, and Baylis says even getting the business funded took large amounts of effort.
"In the early days no one apart from our family and friends believed in our concept for SumoSalad, and being quite young it was hard for people to take us seriously. A lot of hard work from our end and financial help from private investors finally enabled us to overcome this challenge."
But Baylis says they have learned from their mistakes. With business booming, SumoSalad now has 62 franchises recording $45.4 million revenue during 2008-09, on an average growth rate of 81%.
Baylis says it is monitoring trends in the industry to help the company develop new products, and says its rivals are coming up short with competition.
"With more people looking to improve their diets and wellbeing, fast food chains are adopting this change by providing healthy choice meals. However, not all of these are actually nutritious for you. We are trying to incorporate more organic produce to the menu, as this seems to be a consumer trend. There are also a few fast food outlets that may be fooling consumers with their 'healthy' offerings."
The company, now one of the fastest growing franchises, hopes to open a new label of stores in a restaurant format and continue expanding overseas after opening a Dubai location in 2007. It is also adopting social media to grow online, using its Facebook page to offer discounts and news about the company.
As for emerging from the downturn, Baylis says his strategy is to continue "providing support for our franchisees, trying to make sure they have everything they need to bounce back with us and encourage consumers to see what we have on offer".
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