When Kelly Roddy joined Saladworks as CEO in August 2019, parent company Centre Lane Partners gave him an important task: build a multi-branded business. He immediately brought in executive leadership to prepare for the creation of a holding company. His team started talking to other businesses in November of that year, with plans to make the company's first acquisition a few months later. By early 2020, the company made quite a few inroads with deal conversations, but progress stalled when the pandemic struck, Roddy said.
"Everyone was distracted from whatever their strategy was," Roddy said. "Your strategy became batten down the hatches and make sure you keep the health of the company strong and the health of the franchisees strong and that became our primary focus for months."
That meant providing guidance to franchisees on preserving cash, how to apply for Paycheck Protection Program loans and disaster relief loans, Roddy said. Fortunately, Saladworks didn't have to make a lot of operational pivots. It already had relationships with third-party delivery businesses like Uber Eats, DoorDash and Grubhub and had online ordering, pickup and delivery in place — priming it for a surge in off-premise demand.
Once the restaurant industry became a little more stable a few months later, Roddy and his team returned to his initial strategy, and at the end of 2020, holding company WOWorks — with Roddy at the helm as CEO — made its debut with the acquisition of Frutta Bowls and Garbanzo Mediterranean Fresh.
"We were knocking on doors and really looking for companies that we felt like fit the DNA of what we wanted WOWorks to be," Roddy said. "We developed the main WOWorks and had the idea for quite some time before we even got an acquisition done."
WOWorks is focused on fast casual brands that provide clean and healthy fare, with an ethos of food as fuel, he said. This strategy came into play when it bought The Simple Greek in March, which offers Mediterranean cuisine, known for meals typically full of fresh fruits and vegetables, as well as healthy fats from nuts and fish.
"Everyone is much more educated and conscious of what they're putting in their bodies today," Roddy said.
And more deals are likely to come. Roddy said he expects to add another two or three brands to WOWorks by the end of this year.
"When we look at some of the smaller brands we're acquiring, we look at brands that are what we would consider in their infancy, but they are where the puck is going [and] where consumer demand is going to be in the future," he said.
As a holding company, WOWorks has better buying power and can negotiate contracts with vendors more easily to lower costs, Roddy said. WOWorks will share resources like accounting, finance, technology, human resources and communications, but each chain will have operations, training and marketing specific to its brand. A general manager will be responsible for each business alongside operations and marketing leads.
WOWorks expects its ownership of these small brands will help them grow with access to robust infrastructure and private equity backing, Roddy said.
Growing outside of acquisitions
In March, WOWorks entered an agreement with Ghost Kitchen Brands to bring 60 Saladworks locations into U.S. ghost kitchens spaces, many of which would be located inside Walmart stores.
"If you're having food brought to you, you don't really know or care where it's being brought from," Roddy said. "The ghost kitchens allow you to get into many more points of distribution for your food and for some people, they can have access to healthy food."
The company has expanded into lower income areas and urban markets like Philadelphia and Baltimore — where Roddy says many brands haven’t entered in the past — to provide these communities greater access to healthier meals.
While Saladworks is the main brand WOWorks has deployed at ghost kitchens, Roddy expects its other restaurants to also enter this channel over time. He said the biggest challenge that comes with developing a ghost kitchen is the time it takes to build a strategy, menu and relationships with a shared kitchen operator. Menus can be particularly difficult because they oftentimes need to be adjusted depending on the kitchen partner’s resources, Roddy said.
The size of the space, cooking services available and kitchen equipment can determine how a brand can function within a ghost kitchen, Roddy said. A brand also has to consider if it would be able to add equipment it needs and whether the chain can provide the same quality products using the services offered, he said. Distribution can also be difficult in these kitchens when it comes to finding ingredients, especially when WOWorks expands a concept into new markets. For example, Saladworks is opening ghost kitchens in Canada, but that requires different distribution sources to find the same quality food items used in the U.S.
For a brand like Garbanzo, which makes its sauces and items like pita bread fresh each day, there needs to be enough space to accommodate this preparation, he said.
"I think we’re really close on the menu, but once that menu is fine tuned a bit … you'll see Garbanzo [in ghost kitchens]," he said. "But it wasn't easy just taking the menu and implementing it because of all the equipment."
The company is exploring both existing and new relationships with shared kitchen providers to offer spaces to its additional brands, he said.
WOWorks is also eyeing virtual brands as another path to growth and is testing some concepts in select Saladworks locations, Roddy said.
"You use the same ingredient to create new recipes and so you could go on and on," Roddy said. "So you think Sandwichworks and create more variety of sandwiches, Pizzaworks, Soupworks. … By adding one or two items, you can create a new category."
Traditional store development is also part of the company’s growth strategy, and WOWorks opened seven Saladworks in the spring and has several more in the pipeline this year. For its newly acquired brands, the company completed its new franchise disclosure documents at the end of March. It has a strong pipeline of requests, with deals expected to be completed as quickly as mid-April, he said.
With these new development possibilities, acquisitions and ghost kitchens, Roddy is optimistic about the company's future and its growth trajectory.
"We're scratching the surface with all the things that we're creating," Roddy said.