The SumoSalad Story: Making Voluntary Administration Work

How SumoSalad went from looking at Voluntary Administration to come out the other side with a Business Restructure and their next stage of financial growth.


You Do Win Friends With SumoSalad

In 1995, the Simpsons first declared to the world 'You Don’t Win Friends With Salad'.

Certainly at the time, they were right.

Coming into the new century, fast food was limited to the golden arches of McDonalds and KFC with supposedly “healthy” takeaway options largely reserved to Subways, whatever Woollies & Coles stacked on their shelves as Grab N Go’s and local corner Sandwich Delis. At that point, finicky diets were limited to the lactose intolerant and vegetarians, with gluten-free and vegan only just trembling into existence.

  • In 2003, healthy fast food salad bar SumoSalad is launched from the Sydney CBD by Luke Baylis and James Miller.
  • They would cater to people looking for nutrition and convenience – big on the servings, healthy on the body with every effort to source produce locally and ethically under sustainable operations.
  • Within three years, SumoSalad is listed at 22 in TheSmart50, with more than 60 franchises across the country, making international headway with a Dubai store and recording more than $45M in revenue.
  • In 2012, the Tulla Group takes a 60% stake in SumoSalad. The cash injection would see the company reach 100 store openings in Australia, New Zealand, Singapore, UAE, South America and the US, to record $75M in revenue.
  • SumoSalad would elevate their brand, collaborating with celebrity personalities, including Chef Pete Evans  (though the partnership would end in 2015, coincidentally around the release of Peter’s controversial ‘Bubba Yum Yum: The Paleo Way for New Mums, Babies and Toddlers’), Commando Steve, Dr Zac and Erin Hollard.
  • Under Tulla's protection and business vision, 20 SumoSalad stores would open up shop within the Westfield Food Court precincts.

Westfield Don’t Win Friends With SumoSalad

But while the SumoSalad wave is riding high, the business model for shopping centres is forced into a sharp restructure.

When SumoSalad Had To Make The Call

It’s a credit to Sumosalad making the tough call for the sake of their brand and their franchisees

  • The overall business model for the two leasing entities was no longer economically viable with their current agreement
  • For the good of the operations and finance of the business, a Voluntary Administrator was the only available option to restructure
  • Since Westfield's Scentre were not coming to the table and cutting the rent, SumoSalad saw Voluntary Administration a reasonable option for their franchisees to exit the deal.

SumoSalad’s Wins

In an unprecedented move, SumoSalad saw all the positives and advantages of implementing Voluntary Administration

A Brand New & Shiny Business Restructure

QSRMedia reports SumoSalad unveils plan for strategic restructure of business.

SumoSalad’s new plans include

  • Making food more convenient and better value without compromising on ethos
  • Increasing from current serve of six million healthy meals a year to 25 million meals with the next three years
  • Increase revenue in new areas, such as grocery, petrol and convenience store locations, airport terminals and other transport hubs, universities and colleges
  • Move stores away from traditional outlets and into other customer-focused locations.
  • Result would be the closure of some stores in shopping centre food courts in New South Wales and Victoria, but a minimal impact on the network of more than 92 stores.
  • A partnership with the Caltex service station network
  • A partnership with Menulog to deliver through the day directly to homes and workplaces
  • Target corporate partnerships
  • Raising up to $3 million in new equity capital for next stage of financial growth

Moral Of The SumoSalad Story

Voluntary Administration is not the end of business. It is the beginning of Business Restructure.

*Image Source: Monash University

If you want to explore restructuring your business and get back on track, get in touch.

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