Do you want to open a Salata franchise but are wondering if it’s worth the investment and the effort and what is the Salata Franchise Cost? It’s a valid question, considering that the industry is highly saturated nowadays and there is a lot of competition. Even though Salata is one of the leading franchise chains and looks good on paper, the hesitations might be there.
That’s why we are here to talk to you about Salata and its franchise system. We will show you the Salata’s franchise system, associated costs, expected revenue, and all other information to help you.
About Salata And Salata History
Salata is a popular franchise restaurant chain specializing in its fresh and customizable salad offerings. Founded in 2005, Salata has made a name for itself by providing a healthy and delicious dining experience.
The company’s menu features a wide array of fresh vegetables, proteins, and dressings. It also allows customers to craft their own salads or wraps to suit their preferences.
Salata started to franchise in 2005 and quickly grew their franchise system and the number of franchised outlets. The company has a well-structured franchising system, which allows them to grow faster and more efficiently.
Now, the company has over 85 outlets across the country and many successful entrepreneurs under their umbrella.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $285,500-$889,000 |
| Franchise | YES |
| Franchising Since | 2006 |
| Franchise-Fee | $40,000 |
| Royalty-Fee | 5% |
| Liquidity | $300,000 |
| Estimated Outlets | 89 |
How Much Does It Cost To Open A Salata Franchise?
The total cost to open a Salata franchise is generally between $285,500 and $889,000. This is the total cost to start operating a Salata franchise store, including the $40,000 franchise fee and all other startup fees. This number is given by Salata in its franchise disclosure document.
It follows the range that their existing franchisees spent. That’s why, depending on various factors, the real number for your store might be outside of this range.
Franchise Requirements Of Salata
There is no strict professional requirement from the potential franchisees. Since they provide extensive training to the new entrepreneurs for the Salata brand, they don’t look for experience in the industry.
On the financial side, you need to have a minimum net worth of $1 million and liquid assets of at least $300,000. These are the obligatory franchise requirements that every entrepreneur must possess.
Salata’s Franchisor Profit & Revenue
Salata is a privately held company, and they don’t share their financial information with the public. That’s why there is no official financial information about the company’s profit and revenue.
However, we know the average sales per store from their franchise disclosure document. Based on the rough estimations from those numbers, we can conclude that Salata’s revenue might be close to $100 million.
Salata’s Franchise Revenue & Profit
According to Salata’s franchise disclosure document, average overall sales per franchised store are around $1.1 million.
So if we assume a profit margin of 15% as per the industry standards, then we can find out that a Salata’s franchise owner make estimated annual net profits of $165,000 on average.
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 1100000.00 |
| Rent | 10.63% | (116875.00) |
| Insurance | 5.31% | (58437.50) |
| Salaries | 21.25% | (233750.00) |
| Franchise Royalty Fees | 5.31% | (58437.50) |
| Utilities | 2.13% | (23375.00) |
| Cost of Goods Sold (COGS) | 26.56% | (292187.50) |
| Labor (Variable) | 13.81% | (151937.50) |
| Total (Expenses) | 85.00% | (935000.00) |
| Net Profit | 15.00% | 165000.00 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Failure Rate Of Salata
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2016 | 38 | 41 | +3 |
| 2017 | 41 | 57 | +16 |
| 2018 | 57 | 67 | +10 |
For the Franchised outlets:
- In 2016, the growth rate was (3)/38×100≈7.89%
- In 2017, the growth rate was (16)/41×100≈39.02%
- In 2018, the growth rate was (10)/57×100≈17.54%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2016 | 15 | 14 | -1 |
| 2017 | 14 | 14 | 0 |
| 2018 | 14 | 11 | -3 |
For the Company-Owned outlets:
- In 2016, the failure rate was (1)/15×100≈6.66%
- In 2017, the failure rate was (0)/14×100≈0.00%
- In 2018, the failure rate was (3)/14×100≈21.42%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2016 | 53 | 55 | +2 |
| 2017 | 55 | 71 | +16 |
| 2018 | 71 | 78 | +7 |
For Total outlets:
- In 2016, the growth rate was (2)/53×100≈3.77%
- In 2017, the growth rate was (16)/55×100≈29.09%
- In 2018, the growth rate was (7)/71×100≈9.85%
According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.
We can see that the franchised outlets for Salata grew from 2016 to 2018, showing a growth rate between 7.89% and 17.54%.
On the other hand, for company-owned outlets, the failure rate of Salata was lying in the range between 6.66% and 21.42% for the same period of time.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Salata franchise has expanded in the years 2016-2018 showing a total growth rate between 3.77% and 9.85%.
Payback Period Of Salata Franchise
With an average investment of $587,250 and an estimated 15% profit on the average net revenue, which is $1.1 million, the yearly profit would be $165,000.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $587,250/ $165,000= 3.5 years
Based on these figures, it will take approximately 3-4 years to pay back the initial investment for Salata. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Training and Support Of Salata
There is an obligatory initial training program that the franchisee, if applicable, the designated manager, and any additional person the franchisor requires must take. There is both classroom and on-the-job training, and both of them happen at a designated location. In total, you will receive around 900 hours of on-the-job training and 235 hours of classroom training.
As part of their support program, Salata provides both pre and post-opening support for the franchisee. This support may include lease negotiation, site selection, construction, operational, and marketing support.
Terms of Agreement and Renewal
Salata’s initial franchise agreement is for ten years. At the end of the initial ten years, a renewal might be possible if both sides agree to it. The franchisor also needs to approve this renewal. The renewal is for one renewal term of ten years. You also have to pay a renewal fee, which is 50% of the franchise fee.
Obligations and Restrictions
The franchisee is obligated to sell products and services that the franchisor has approved beforehand in writing. These products must be aligned with the franchisor’s standards and specifications.
You are also restricted from using the franchised location for the operation of any other business. The restaurant must also be kept open during the operation hours that the franchisor specifies. The franchised restaurant must also be operated within the methods, standards, and procedures laid out in the manual of the franchisor.
Financial Assistance
Salata does not offer direct or indirect financial assistance. They are not responsible for any kind of lease, note, or financial responsibility. It is completely up to the franchisee to find the necessary financing for the store.
Entrepreneurs considering a venture into the restaurant franchise sector might explore options such as Philly Pretzel Factory, Firehouse Subs, Qdoba Mexican Eats Franchise, Cracker-Barrel Franchise, and Del Taco Franchise.
Salata Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Freshii | $30,000 | 6% | $172,500-$641,000 |
| Just Salad | $30,000 | 6% | $307,000-$753,000 |
| Salata | $40,000 | 5% | $285,500-$889,000 |
Conclusion
Salata is an American restaurant chain offering and specializing in a variety of salads. The company was founded in 2005 and started to franchise in the same year with the hopes of growing the chain and getting the brand name out there.
While doing so, they established solid franchise systems to help the entrepreneurs in their network and grow the company even faster and more efficiently.
Because of all this experience in the franchise industry and the extensive system, Salata stays as a good franchise opportunity.
Additionally, the overall sales numbers are above $1 million for most franchises, signaling a high profit opportunity compared to what you pay to open the store. That’s why we recommend you consider owning a Salata franchise if you are interested.
FAQs
Is Salata a good franchise?
Salata brand is a well-established brand with a strong franchise system in place. They are also proven to be profitable for their franchisees across the United States. We can say that Salata is a good franchise.
How much does it cost to open up the Salata franchise?
The franchise fee is $40,000, and the total expected investment is between $285,500 and $889,000. This includes the franchise fee and all the other expected startup costs to open a store.
Is Salata a public company?
No, Salata is not a public company. It is a private company owned by Berge Simonian and Tony Kyoumijan. They are also the founders of Salata.
Where is Salata headquartered?
The headquarters of Salata is located in Houston, Texas, United States.
How many locations does Salata has?
There are currently 92 locations of Salata in Texas, Georgia, North Carolina, and South California.
Sources
https://franchise.salata.com/investment
https://www.salata.com/grow-with-us/franchising