Luke Baylis is a man with good timing – eleven years ago he managed to turn his own personal quest to eat healthy and improve his lifestyle into a successful and increasingly popular Australian food chain.
Luke is the co-founder of SumoSalad, a rapidly growing franchise that came along at the right time. Launched in 2003, it filled the gap in the market by meeting the demand for fast, affordable and healthy food.
After putting on 50kgs while working in the information technology sector in North America, Luke was keen to shed the extra weight after returning home to Australia. However, he was struck by the lack of healthy food options.
“I’d put an about 50 kilos,” Luke tells Dynamic Business. “When we came back into Australia I tried to start exercising more and eating in a more healthy manner. And the more I tried to do that, everywhere I’d go I’d find it almost impossible to find somewhere that was high quality, affordable and healthy.
“There was just a huge gap in the market. Everywhere you went it was the same thing, Pizza Hut, KFC, Maccas.”
Sensing an opportunity to meet a growing demand for healthy food, Luke founded SumoSalad with his friend James Miller, who tragically and unexpectedly died last year. James would eventually go on to leave the SumoSalad business to pursue other interests.
“We were having a few beers one night and we thought about literally thousands of names. And probably the only name we could remember when we woke up the next day was SumoSalad,” Luke tells Dynamic Business. “Why we loved SumoSalad was because it was a big fat man selling healthy food. It meant salad was a big meal. Big on health. Big on taste.
“James and I had always been entrepreneurial and been big dreamers about what we wanted to do with our lives. We were always very keen to go into business together. We thought it would be a great opportunity for two friends to put their skills together and take on the world”.
Both men were in their mid 20s and had already made a significant amount of money working in IT to finance their business endeavour. They initially opened several stores before they considered adopting the franchise model.
“It was very popular,” Luke says. “It wasn’t until we’d seen the success of a few of the franchise businesses in this space, like Boost Juice and some of those brands. We thought that franchising could be a viable business structure for us to pursue.”
Luke says the secret to the immediate popularity of SumoSalad was the lighthearted manner in which it promoted healthy living as well as the establishment of a strong brand dynamic. The introduction of pre-made salads also proved very popular with customers.
Luke stresses that all of the meats used by SumoSalad are free range and that food is purchased through local Aussie farmers and producers. “We’re very proactive in ensuring that we take a local position,” he says.
It wasn’t long before SumoSalad made the leap to establish stores overseas. The brand now has an international presence in Singapore, New Zealand, and the United Arab Emirates, and Luke will soon open stores in the North and South American markets.
The first US based SumoSalad store is to be located in Los Angeles, California, with Luke having describing the move as an “amazing opportunity” although he conceded the shift offshore was made a little too early in the evolution of the business.
“We went overseas too early as a brand,” Luke says. “We went overseas at about 15 stores. Now that we’re in excess of 100 stores we are able to be a lot more strategic with the markets that we target… We believe this is going to be a huge global brand and take-on the likes of McDonalds.”
However, Luke stresses that the main focus of the business is still firmly geared towards developing the Australian market, where the goal is to start doing more turnover than McDonalds. There are currently 105 stores trading in Australia compared to 12 trading internationally, including seven in Singapore.
One of the key decisions in the evolution of SumoSalad was the decision in 2012 to sell a 60 per cent stake to private investment company Tulla Group, owned by the wealthy Maloney family. Luke owns the remaining 40 per cent, with global revenue now in excess of $90 million.
“I think it’s been a great partnership and we’re very positive,” Luke says. “They made a lot of money from mining investments, but a true passion of theirs was around health and wellbeing. This whole business really connects with them at an emotional level.”
Luke tells Dynamic Business the goal is to now grow the number of Australian stores four-fold to reach 400 outlets and develop stronger relationships with franchisees and help them to expand the brand. He says that one franchisee has just opened their 9th store with SumoSalad.
“That’s a great thing. When we see someone having that level of commitment to our brand… that’s a really important aspect of what we’re doing,” he says. “The very nature of franchising is around maintaining relationships… For us, the most critical factor of success is having strong franchise relationships.”
Luke says the business challenges he has faced have evolved as SumoSalad has developed. “When you are one store, the challenges are completely different to when you are 115, 117 stores,” he says. “Depending on the business cycle, challenges change. Our challenge at the moment is to maximize our competitive advantage and maintain that leadership position in a competitive environment.”
His advice for other entrepreneurs is simple. Surround yourself with reliable people. “It’s a little cliché, but invest in good people. Develop your best people and be quick to cut the ones that don’t bring value to your business.”
