Salad House
Salad House offers fast-casual dining with fresh salads, soups, and sandwiches in multiple-unit or single-restaurant franchises. Known for its customizable menu options, it operates in the competitive quick-service restaurant sector.
Salad House franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Salad House Restaurant under a franchise agreement is estimated between $422,200 and $668,400. This includes $40,000 that must be paid to the franchisor or its affiliates [p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000 and it is non-refundable [p.12, p.18]. This fee applies to a single franchise under a Franchise Agreement [p.138].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a continuing monthly payment equal to 6% of the franchisee's monthly Gross Sales [p.114]. Additionally, there is an advertising fund fee that currently requires a contribution of 1% of monthly Gross Sales [p.30], which may be adjusted by the franchisor but cannot be less than the rate specified in the agreement.
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in detail here. However, according to [p.151], you have the option to renew the franchise for a one additional 10-year term under certain conditions. This Renewal Term is not available if the Franchised Business was previously operated or developed under a prior Franchise Agreement with the franchisor or its predecessors.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from the franchisor. The franchisor may refuse to approve a transfer for good cause, which includes not being in substantial compliance with the agreement, failing to meet the franchisor's standards for new franchisees, or owning or operating a competitive business. Additionally, the proposed transferee must have good moral character, sufficient business experience and financial resources, and cannot own or operate a competitive business. [p.226], [p.137]
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.229]. Additionally, the franchisor may terminate the agreement if there is a failure to comply with lawful provisions of the franchise agreement and such failure is not cured within a reasonable time frame [p.5(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not detail specific net worth or liquid capital requirements for qualifying as a franchisee. However, it mentions that if the franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000, you may request escrow arrangements for your initial investment until certain obligations are fulfilled [p.226].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.35]. However, during the term of the Franchise Agreement, provided you comply with your obligations, the franchisor will not establish another Salad House Restaurant in your designated territory [p.35].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial Training Program that may include classroom and on-the-job instruction at designated locations or remotely through online web-based conferencing. Following completion of the program, Franchisee is responsible for providing ongoing training to employees, which must conform to the franchisor's standards. The Training Program can be structured in various phases as determined by the franchisor [p.111]. Additionally, the franchisor offers an initial training program for replacement Operating Managers at designated facilities and requires a fee for this service [p.28].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor, Salad House Franchising, LLC, does not make representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets [p.53]. However, if you are purchasing an existing outlet, they may provide actual records of that outlet's performance [p.53]. Additionally, the franchisor can provide financial performance information only if there is a reasonable basis for it and if such information is included in the Disclosure Document [p.47].
What am I restricted to selling, and where must I buy supplies?
You are required to exclusively offer and serve the Approved Services and Products in accordance with the System's standards and specifications [p.121]. Additionally, you must purchase or lease certain source-restricted goods and services from designated suppliers, which may include the franchisor or its affiliates [p.21]. This typically represents about 55% to 85% of your ongoing operating expenses [p.21].