Saladworks, the 108-store chain that pioneered vegetable-based restaurant franchising, has been acquired by Centre Lane Partners L.L.C., a New York buyout firm.
Centre Lane agreed to pay $16.9 million to the Conshohocken company's owners and creditors to acquire the chain, and to spend an initial $2 million "to help us accelerate growth" and update the stores, Saladworks CEO Paul Steck said.
"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 said. 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 21/2-year dispute between founder John Scardapane and Marlton-based investor Vernon Hill. The tussle landed the company 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," said Scott Victor, managing director of SSG Capital Advisors, the West Conshohocken adviser to distressed companies who guided Saladworks through the sale. Hill invested $7.5 million in Saladworks in 2008.
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.
Saladworks originated "the fresh-tossed salad restaurant concept," and Steck's team's "focus and commitment" attracted the new owner, Centre Lane managing director Mayank Singh said in a statement. 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.
"I have a diverse group of customers," Rosetti said. "Everybody loves a salad."