Welcome to Chopping It Up. I'm your host, Mike Allen, a senior restaurant and food service analysts at Bloomberg Intelligence. Our research and that a bi's five hundred analysts around the globe can be found exclusively on the Bloomberg terminal. If you enjoy the pod, I'd love it if you could leave us a review on Apple or Spotify. Today we're joined by Nick Kenner, founder and CEO of Just Salad. Thanks for joining me, Nick.
Yeah, thanks for having me. Mike appreciate it.
So are you a native New Yorker?
Yes?
Are you No, I'm Jersey. I'm a Jersey guy man. So I saw that your office is actually right down the street from our Bloomberg's New York flagship. And I saw that you went to Colgate, So I thought, maybe you know.
Having strayed too far from New York City in life, so actually one of my bigger personal regrets. But I do love it.
Okay, So you grew up in the city I grew Yeah, I.
Grew up downtown in Greenwich Village and yeah, went to Colgate, graduated, came back, got a job in finance, quit started Just Salad, and I've been in New York City ever since.
A very cool So what inspired you to start just salad?
Well, the first thing was actually to answer a question directly. Actually, in some ways it was seamless web. I was twenty four, was my turn to order lunch for the entire trading floor, and everyone wanted a salad and I went on to
and no one was specific about where it was from. Right, these were the days where there was no one in midtown specializing in salad, and so people were getting salads from a suit place called Hale and Hardy from places like packs Metro, and of course when everyone got them,
people would complain about the quality and the options. And so that was kind of an epiphany moment where if someone I realized, if someone just did salad, but did it really well and specialized, there could be a big opportunity, not just in New York City, but you know nationally as well.
What did you trade?
I was moved all over the place. It was kind of a I was working at a hedge fund, and as people would get fired, they would put me as an assistant to going from the consumer retail analysts to a person running the syndicate desk. Eventually I ended up working for a great guy named Peter Jepson doing you know, handling the helping him handle the macroeconomic book.
Okay, cool, Yeah, I was an equity pop prop trader in a previous life. And about the salads, man, we used to I worked at Sadodi covering restaurants prior to Bloomberg. I guess it was early twenty teens, and we actually had a salad spot that we found on Lexington. It was like maybe around the high forties, I guess maybe forty eighth and lex And they did a great salad and we were there almost every day for five dollars
and fifty cents. They would pack that thing with so much protein, you know, and me and my friends were there probably four days a week, maybe you know, Fridays we would treat ourselves to something a little bit nicer.
But if Fridays or the weekdays for most salads in general, it's it's a pizza and Burger's thrive on Fridays for sure.
Man. So I'm assuming at some point the menu was in fact just salad.
Yes, yes, when we started it was it was just salad. And then yeah, we started with a reusable bowl program. Actually we were only selling salads in reusable bulls. Then we realized two things. One people wanted more than salad from us. They wanted things that were healthy, fast and affordable. And not everyone want was going to reuse their bull and so people were throwing those out. So about a
year in we quickly pivoted. We added wraps, and we started to have disposable bowls as well to accommodate those that we're not going to reuse. And today, I mean, now it's the menu. Is it's ironic given the name because we're probably more diversified in health than anyone in the salad category. We sell smoothies, we sell warm bowls, we sell wraps, soup, and we just introduced something called
marketplates a couple of weeks ago. So we're really anything where we feel we can create a great culinary product that's fast and healthy and affordable, we're gonna try and do. So.
How many restaurants are there currently, and what's a split between your company owned and franchise units.
So we're virtually all company owned, and I mean we have three that are franchised out of ninety eight, and so we're coming up on one hundred locations, and we're all over the northeast, so Massachusetts, Pennsylvania, New Jersey, Connecticut, New York, Long Island. And then we're also got twenty five restaurants in Florida everywhere from Orlando down to South Florida, Port Saint Luci in between. And then we're in the Chicago area as well.
All Right, So I saw you raised some money recently, So should that should that be an indication? Is that an indication that you're going to be primarily focused on building company owned units going forward?
Yes, yeah, that's a good rate. Yeah, we're not franchising right now, so you know, the capital is meant to just continue to accelerate our growth. So we we open ten restaurants roughly in twenty twenty three, we open twenty restaurants in twenty twenty four, and we'll hopefully open thirty restaurants this year, and we'll continue to ramp up a company owned growth.
Okay, cool. This leads me into a few different questions. I guess let's start here. How big are the restaurants and how much do they cost to build?
Yeah, I mean the restaurants, it really depends based on are they urban, are they suburban, but you know, call it roughly two thousand square feet and net build out costs are typically around eight hundred and fifty.
K Okay, is there any other un economic data you'd like to share, cash on cash returns, whatever it might be.
Yeah, I mean, we we've the business model is in a very good place. I say that humbly because you know it wasn't always the case, but certain in the last few years we've hit a lot of goals that we've had. One of them was getting above twenty percent store lovely bit on margins, which we're significantly above that. Now we're above the two million AUV that we'd always wanted. And most importantly, these are all like means to an end.
The most important, like you said, is cash on cash return and you know we're typically around forty to fifty percent or more on that. So it's been it's been a great business the last couple of years, and want to continue to keep that going.
Yeah, strong. What percentage of your new store gms are brought in from other existing just sellid restaurants.
That's a great question. Virtually all our general managers have been line level employees, assistant managers or supervisors at existing locations, so we have an unbelievable farm team, we call it. And we don't hire on the operations level outside general managers almost ever. Sometimes there are unique situations in newer markets where someone doesn't want to raise a hand and move to but that hasn't been an issue in Florida, by the way, But typically it's just existing employees who
see the opportunity. And you know, speaking of Florida, we have a husband and wife that had been with us in New York for over ten years and they moved down to Florida together to run separate locations. Our regional director who heads up Florida. She worked with me at our second location in a basement, doing all of the
deliveries for Midtown together. She ended up actually moving to Florida year to ahead of just salad working at a Chase Bank, and then when we moved there, she raised her hand and now she's our regional director, which has been pretty pretty amazing journey for both of us there.
So yeah, I mean, we really on the operation side, we want our employees to see the growth, to see the opportunity, and I think it can be somewhat discouraging when you're bringing in people from the outside with quote unquote great resumes, right Starbucks, Chipotle, whatever it might be, and putting them over people that have been busting their butt at your company for years. That's something we've really tried to avoid.
Yeah, that's great, and it keeps the culture intact.
Yeah, and culture is a big part of operations for us. We have something called the three c's, so every location, every employees trained on it. It starts with the culture, creating a culture of positivity, opportunity, and growth, and then it leads to connection with the customers. We want to connect with every guest that comes through, and we want to have consistency, consistency of product and consistently see of hospitality.
Wh's a core customer.
There is no core customer for Jess Salad. It is a extraordinarily broad customer.
We have.
Really we have locations in Midtown, New York, We're in Harlem, We're in Williamsburg, Brooklyn. You know we're in these are these are radically different demos from each other. Then and even in Florida, you know, we'll be in Brickle but we'll be in Port Saint Lucy or Pembroke Pines. So you know, Pembroke Pines, the average household income is about high seventies equal to US household income. Brickles off the charts. It worked for really anyone that's middle income, upper income,
and even lower middle income. I think there's just a giant desire in this country to have healthy food that tastes great, that's actually affordable, and I think we're delivering on that better than anyone col Do you.
Think that's a bigger opportunity maybe on the coasts than it is in Middle America?
No, I mean, I think we're kind of seeing from the average household income in the markets that we exist in the Northeast and Florida that there's a huge opportunity all over the country. And so you know you're you're going to see that in our site selection in the coming years as well.
What's the split between lunch and dinner?
So suburbs it's about sixty forty in favor of lunch, and then although that is that is changing with the release of the marketplates, our dinner's actually going up pretty significantly, and urban's like anywhere from seventy or eighty percent. Lunch just is a lot of a lot of these areas empty out at night.
Okay, I see you're getting into the drive through game this year. Are you having any issues finding good locations, be it drive through or traditional in how many restaurants and would you say about thirty ish or so this year?
Yeah, So we'll open around thirty restaurants this year, about one or two we'll be drive throughs. Drive through real estate's impossible to get in the markets we operate, so it's certainly not a need to have, but if there is a good opportunity, we'll do it. And we're not doing pick up lanes like at Chipotle. We're doing actual drive through lanes where you can point and shoot and get what you want at that time. You don't have
to download our app or anything like that. And so we think that's a huge part of disrupting fast food is doing drive through and doing it well. And so far we've had a great experience. We open our first one in Livingston, New Jersey. The drive through is doing really well for us, and they'll be There'll be more on the way when there's opportunities.
All right, So that's it. There's two near me. I have not been yet, but there's a Clifton location and Livingston location for mail have.
Come come on check it. I mean, where are you in Jersey?
I live in Verona, New Jersey, right next to Moncley.
Okay, yeah, that's well, we'll try and get closer to you then.
Yeah, so when I'm out running my errands on Saturday, I'll swing by the Livingston drive through. How are you looking to drive Seamstar sales growth this year?
Good question. I mean, we were coming off double digit same store sales since twenty eighteen with the exception of COVID twenty twenty, and unfortunately, I could say with confidence this year very unlikely. It's going to be double digits this year. It's certainly a harder consumer environment, and I think there's been dramatic tailwinds to just salad and the category, and I think it's a little more of a market share game this year because they're just you know, doesn't
seem to be the consumers. Seems like it's tightening a little bit. So with that, you know, we're launching our Loyalty this summer. That's gonna be a big part of Q three, Q four and and the future, and it'll be offering instant rewards to our customer and some other at this point confidential, but really fun, amazing gifts for our customers. And then marketplaces has been a big boon
that's going to have tailwinds. So we only released that about three weeks ago, it's already besides salads, our biggest category, and people the feedback has been amazing in a lot of ways. I think it's our one of our best culinary products we've ever put forth, and I think that will create a new occasion for customers who come to us for salad but might want something heartier at night or on weekends, and I think that should help drive sales uh there as well. And then there's the general look.
We're in the restaurant business. The food's got to continually get better and it's hard to define, but when it gets better, you get more customers. And so there's constant culinary innovation that's happening all the time, including this year.
Obviously, commodity prices have been swinging around with a lot of the tariff news and headlines, and so I guess how much inflation are you expecting at right now for the year, and how much price do you intend to take?
Yeah, impossible to say. No one knows where this ends up. If it ended up where it is today, not much. All our food pretty much comes from America, with the exception of Mexican avocados, where Canadian and Mexican agriculture are excluded from the terrorists as of now. So on the food side, not much. There could be significant packaging costs and significant cost to kitchen equipment, and it's too hard
to know. Ultimately, Look, if it looks like it's truly affecting our margins, we will, you know, have to take price. But I don't think at this point it's it's it's it's too hard to know what that actual effect is.
What was your plan for price coming into the year. All right, good stuff? So when I when I pull up to the drive through Saturday, what should I order?
Well, I gotta know a little bit more about you, Mike, So are you do you like chicken? Are you vegan? Do you like spicy? So?
I like spicy, I like chicken. You know I like steak. You know, protein's big, I.
Would say so. The crispy chicken peblano is always a crowd pleaser. That's a salad. The spicy chicken sees a wrap might be up your alley. And if you're looking for something hardier and you don't want a salad, the Tazeki market plate pro tip with like a little siracha on the yok cucumber is pretty amazing. So those are my favorites right now.
Those all sound fantastic. What's your personal favorite? Number one go to order?
I eat it four times a week, so at this point there is I have to mix it up. But right now I've been odeing on the marketplates, either the Pesto or the Tazeki my all time in terms of what I've ordered the most itch just out. The Tokyo super Greens is an amazing one. And the Crispy Chicken Peblano, I don't do Krispy chickens. I sub that out for our braised chicken, which my opinion is the best chicken in all of fast casual or fast food is amazing. That's that's what gets me excited.
All right, good stuff, You gave me a few things to try. That pesto is right on my alley too, man, so I think you're gonna have to try that one. This was great, Thanks again for doing it.
Nick. Was nice to meet you. Yeah, nice to meet you and appreciate you having me on.
Yeah, you got it. Where can listeners go to find their nearest Just salad?
Just go to just salid dot com and click on the order now now I'm kidding, it's just salad dot com and you can click on locations and it'll show show you what's closest.
All right, great? And uh, which social media channels are you big on?
We have an actress salad At on Instagram and uh, you know, we have a LinkedIn profile, but Instagram is the best place to find us.
All right, good stuff. I also want to thank the audience for tuning in. If you like the discussion, please share it with your friends and colleagues. Check back soon for an interview with Vishal Augerwal, the founder and CEO of Checkmate