Saladworks: Founder and Vernon Hill out; buyer plans growth

Saladworks, the 108-store, Conshohocken-based fresh-cut salad chain, has been acquired by Centre Lane Partners LLC, a New York buyout firm. Centre Lane agreed to pay $16.9 million to the Conshohocken company's owners and creditors, and to spend nearly $2 million in the near future "to help us accelerate growth" and update the stores, Saladworks CEO Paul Steck told me. (My story from the June 13 Inquier and dozens of comments here.)

"We will be adding new products - upscale cheeses, organic greens, antibiotic-free poultry, quinoa," and boosting headquarters and field staff, to 22, from 15, Steck told me. There are plans for new packaging, smartphone apps, and updated store designs, with natural wood finishes and a "farm-to-table" motif.

The deal ends Saladworks' involvement in a paralyzing two-and-a-half-year dispute between founder John Scardapane and Marlton-based investor Vernon Hill (you might know him from the former Commerce Bank, Metro Bank Plc, First Republic Bank, the Burger Kings in Philly's northern suburbs, the former Rib-It.)  Hill invested $7.5 million in Saladworks in 2008, and wanted it back. The tussle landed Saladworks in federal bankruptcy court and in state litigation in Pennsylvania and Delaware.

"There is enough to pay Vernon and all the other creditors in full," Scott Victor, managing director of SSG Capital Advisors, the West Conshohocken adviser to distressed companies who guided Saladworks through the sale, told me.

Saladworks, founded in 1986 in Cherry Hill, has been franchising stores since 2001. The company says its salads average less than 300 calories with its proprietary dressings. Last year, the company said, annual sales averaged less than $1 million per store, which the new owner expects to improve.

While the chain has outposts in Canada, Dubai, and Singapore, 85 of its stores are within 80 miles of Conshohocken, and expansion will focus "on the I-95 corridor," Steck said. The chain will continue to chop vegetables in-store, he added.

Centre Lane's other investments include at least one other franchiser, Coverall Health-Based Cleaning in Lyndhurst, N.J. However, it's apparently the private equity firm's first foray into the restaurant business, according to a list of investments on Centre Lane's website.

"I'm hoping for new stores, I'm looking for some new building designs" at a scheduled meeting with the new owners' reps next week, said Saladworks franchisee Vincent Rosetti, who operates Saladworks in Bensalem and at the Tremont shopping center at Welsh Road and Roosevelt Boulevard in Northeast Philadelphia.

Rosetti said fittings recommended for his stores under the former ownership by InterArch, the design company owned by Hill's wife, Shirley, proved expensive. Vernon Hill did not reply to an e-mail seeking comment.

Rosetti said he would like to see more money spent on advertising the Saladworks brand, "to get our name in the front of the mind." He said his stores already offer efficient online ordering; some office-based customers still order by fax.