Article
Why Saladworks is taking a shot on virtual kitchens
Although Saladworks CEO Kelly Roddy isn't sure the chain can make money from using virtual kitchens, he's willing to "invest and learn."
February 4, 2020 by Cherryh Cansler — Editor, FastCasual.com
While some restaurant brands prefer to sit back and watch competitors test new strategies, that isn't Kelly Roddy's style.
"We are trying to lead the way and grow aggressively," the CEO of Saladworks said in an interview with Fast Casual. "We are trying to be on the cutting edge vs watching others make mistakes.
Roddy's latest trial-and-error project is testing virtual kitchens via a partnership with Kitchen United, where the 100-unit salad brand is renting kitchen space in Chicago, Scottsdale and Austin. Saladworks, based in Pennsylvania, chose those cities because they cater to different types of customers.
Chicago, for example, allows the chain to see how it will do in an urban area, while the Scottsdale location is in the suburbs, and Austin in more of a hybrid setting but with a younger demographic.
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| Kelly Roddy, CEO of Saladworks, is testing virtual kitchens as a way to double the brand's presence by the end of the year. |
"It's an easy way for us to enter a market, less expensively, to see how the brand will do," said Roddy, who replaced Patrick Sugrue last year as CEO.
Because Austin has such a younger demographic, for example, the chain expects to fill more orders overnight when the bar crowd is headed home.
"We are eager to test all those things to see how much business we can do and what the cost is, said Roddy, who is gearing up now for the Austin rollout. The Chicago and Scottsdale are already underway. "We don't know if we can make money in this, but we are willing to invest and learn."
The tests will also help brand decide if it should offer different menu options from the brick-and-mortar locations.
"We don't know if there is a want for healthy options (that late at night) said Roddy, who hopes to discover if the after-midnight customers will order salads of if they'd prefer the chain to offer healthier versions of popular late-night food like.wings and pizza.
"We'll test it both ways," he said.
Although Saladworks brick-and-mortar locations offer delivery using store drivers as well as drivers from DoorDash, Uber Eats and Grubhub, the test kitchens only use drivers employed by Kitchen United as well as the other third-party companies. Customers may also order via the chain's app and pick up their foods from the KU kitchens.
Measuring success
Making money, of course, is the ultimate measure of success, and Roddy said each location would need to do a minimum of $2,000 a day, seven days a week for him to continue the program in other cities.
"We think we can do that or more, but we don't know yet," he said. "These guys (Kitchen United) have created the marketplace, and they get a cut, so we have to see if there is something left over for us as well — if there is enough profit to go around."
Money, however, isn't everything if the kitchens can help Saladworks build brand awareness.
"If we don't make money, can we create brand awareness and use that to go open street-side restaurants"" is another questions Roddy is looking to answer.
If the tests prove successful, Roddy would like to add 50 to 100 virtual kitchens to the Saladworks portfolio, which would go a long way toward helping him meet his ultimate goal of doubling the brand's size to 200 locations by year's end.
"We're looking at a lot of different ways to grow, and we‘re already off on a good start," said Roddy, who pointed out the chain has entered the nontraditional market, serving customers on military bases, college campus and in airports. "We opened unit 100 in December and one a week in January."
And staying true to the brand's commitment to lead the industry when it comes to innovation, Roddy said the brand is testing ordering kiosks that allow guests to customize orders based on their diets and is looking into the use of robotics.
"We are trying to make brand strong and relevant in a short period of time," he said. "We are moving fast and learning from our mistakes."
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