It has been a tough lesson in the restaurant industry’s “game of inches” for Everytable.
Founded in 2016, the Los Angeles-based concept was once hailed as having cracked the code on the fundamental challenge of making healthful, nutritious fast food affordable to the masses, especially in “food desert” communities, where too often options are limited to high-calorie and sodium-packed traditional quick-service chains.
Everytable was designed to revolutionize the fast-food landscape. And for a while, it was riding high.
The company had raised nearly $100 million from investors, and by this year had expected to be in multiple markets across the country. In November, Everytable had about 60 outlets in California and New York.
But then, the capital markets turned. Everytable retrenched, closing all units in New York and many in California.
Now with 38 units, all in Southern California, the picture for the mission-driven concept looks very different.
But Sam Polk, the former hedge fund trader who founded the concept and is its CEO, contends the reset that was needed has made Everytable even stronger.
The focus now is on what is arguably one of the most interesting aspects of Everytable: A Social Equity Franchise program designed to open doors to ownership for those traditionally shut out of franchising, particularly those from the “food desert” communities the concept seeks to serve.
And those franchisees say they are all in.
“Right now, I’m walking into a store that’s making money,” said Alex Aguilar, franchise operator of a unit in Long Beach, California. “So, what’s been on my mind now is how do I get to the next one?”
Opening day at an Everytable unit in Los Angeles. | Photo courtesy of Everytable
A brand built on efficiency
Polk was inspired to create Everytable after watching the documentary “A Place at the Table,” about food insecurity in America. He first launched a nonprofit called Groceryships, that was designed to help low-income families buy nutritious, wholesome food. But his vision turned to the for-profit sector, where he hoped to demonstrate a better solution.
The basic concept is simple: Everytable is a chain of 900-square-foot storefronts served by a central commissary kitchen, where from-scratch meals like salmon and quinoa over arugula or Chili Crisp Noodles with Sesame Chicken are prepared and delivered daily to the retail outlets for grab and go. The units have no kitchens and can be run with two or three workers.
Pricing is determined on a sliding scale. An Everytable dish might be $6 in a lower-income neighborhood, for example, and $8 in a higher-income area, to help subsidize food costs.
Everytable's food is fresh and fast-casual quality, comparable to a Sweetgreen. | Photo courtesy of Everytable
It’s a centralized production model built around hyper efficiency. In fact, The New York Times in a 2021 headline dubbed Everytable “The Amazon of Quinoa Bowls.”
It’s a model others are also exploring, including startups like Wonder, the drive-thru concept Salad & Go and the new Kernel concept created by Chipotle founder Steve Ells.
But to work, Everytable had to grow—and grow fast—to take advantage of economies of scale.
By this year, the company had expected to be open in New York, Northern California, Philadelphia, Washington, D.C., Boston, Phoenix and possibly Chicago and Texas.
Another door was opening with foodservice contracts. The company in November had announced a partnership with NYC Health + Hospitals that would have brought outlets to just about every public hospital in the city’s five boroughs, for example.
In Los Angeles, city officials contracted with Everytable to provide meal services to both seniors and the homeless in programs that brought thousands of nutritious meals to people in need.
But last year, it became clear the company would have to make some difficult decisions. To complete a fundraising round, Polk said Everytable would have to close all “unprofitable channels.”
The seven units in New York have closed. The partnership with NYC Health ended. And other revenue streams are now challenged: In Los Angeles, funding for the city’s Senior Meal Program is scheduled to end on Aug. 31. It’s unclear whether it will be continued.
In the early years, Everytable had benefitted big time from the rise in impact investing, said Polk. The free-flowing venture capital money that had begun to bleed over from the technology sector into traditional, “boring businesses,” like food, had fueled the early aggressive visions of growth.
“And when capital markets turned, we realized that, in order to ensure the survival of the business, we needed to basically cut down on anything that wasn’t already profitable,” he said, “and really build a fortress of cash flow in Southern California.”
It was, he added, “a capital market shift away from growth at all costs as a priority to profitability being a priority.”
Forging diamonds
There were other challenges. Last year Everytable also lost two key executives, both passionate advocates for the brand. Christine Hasircoglu, the former senior vice president of store operations, is now with Planta Restaurants, but declined to comment for this article. Bryce Fluellen, who was executive director of the Social Equity Franchise program, also departed Everytable, and then tragically died on Jan. 1. He was 53.
The reset has been a bit of a “knee grinder,” Polk said.
But Everytable needed to learn what he said most restaurant operators probably already know: “that food businesses are deeply operational and very hard to scale. It’s a game of inches.”
All startups must evolve. Polk contends it was a process that made Everytable better: more efficient with stronger unit economics— “a diamond forged through heat and pressure,” he said.
Everytable will get back to growth, probably next year, Polk said.
Now Polk is focused on raising funding for the franchise program.
The idea is to make franchising more accessible by removing some of the barriers—and a big one is money.
At Everytable, becoming a franchisee is an opportunity open to any employee who joins at the store level and is successful. First, they have the opportunity to become managers of multiple units. Then, if interested, they can sign on as a potential franchisee.
Once in the franchise program, candidates are eligible for intensive training, called Everytable University, learning everything from how to read a profit-and-loss statement to cultivating the entrepreneurial mindset. They can do the training while working and earning a salary—eliminating another barrier for those who cannot afford to go back to school.
But here’s the kicker: they don’t have to come up with traditional $500,000 to $2 million in capital costs, or demonstrate a certain level of net worth, to open a franchise location, as other fast-food concepts typically require. It’s that financial burden that usually shuts many from underserved communities out of franchising.
Under Everytable’s program, the cost of opening a unit, which is around $300,000, is loaned to the franchisee. They, in turn, pay that loan back over five or so years at a low interest rate, dedicating 75% of earnings before interest, taxes, depreciation and amortization, or EBITDA, leaving them with about 25% to cover taxes and other costs. (The payback percentage is likely shifting to 50% going forward, Polk said.)
He noted that Everytable units are now averaging about $1 million in sales with 30% profit margins.
Everytable units serve walk-ins, but are also fulfillment centers for delivery, catering and foodservice contracts. | Photo by Lisa Jennings
It's a creative approach, said John Gordon, a restaurant economics advisor with Pacific Management Consulting Group, but one that’s not without a fair amount of risk.
Without knowing specific details, it’s hard to judge, he said, “But it seems likely they will be extremely tight for the first few years, until the loan is paid off.”
First franchisees
Everytable’s first two franchise operators took ownership of their units earlier this year.
Susana Cabrera in March became the very first franchisee to come through the Social Equity program and become an owner.
She owns and operates an Everytable store in the Inglewood neighborhood of Los Angeles—one that she ran as a manager for years, so she came in with eyes wide open about the cashflow needed. She is “comfortable” with the loan requirements.
It’s early yet, but Cabrera said, so far, her store is doing well. She has a staff of two workers, and she has already started the process to franchise a second unit.
“We are trending up,” she said. “I don’t struggle paying my bills, and that was my No. 1 fear in becoming an owner.”
What works about Everytable are its diversified sources of revenue, those involved with the concept said.
A central kitchen, where from-scratch meals are prepared daily, serves the small storefront units. | Photo courtesy of Everytable.
Cabrera said the biggest channel for her store is still walk-in customers, but Everytable also offers third-party delivery and there’s a subscription service for people who want healthful meals designed for specific medical needs. Catering is also a growing channel, and Everytable also partners with school foodservice programs, particularly charter schools.
The stores serve as both retail outlets and fulfillment and distribution centers for all of that.
Cabrera, who has worked for Everytable for six years, admits it was a little scary when the company started closing units. “Sometimes you have to make tough decisions,” she said.
And yet, Cabrera is eager for more. For her, it’s really about more than money.
She is passionate about encouraging people to take a chance on themselves—especially women with children.
Cabrera has six kids. Yes, six, ranging in age from 6 to 21.
“I want people to know, yes, they can be moms and they can be entrepreneurs at the same time,” she said. “They can be both.”
Franchisee No. 2
Aguilar became an Everytable franchise owner about a month after Cabrera.
He owns a unit in Long Beach, California, and has become somewhat of a poster boy for the healthful aspect of the concept. When he first started working there over a year ago, eating Everytable for lunch every day, he dropped 38 pounds to a now-healthy weight.
For Aguilar, “the beauty of the model is the storefront doesn’t need many workers, so your labor cost isn’t crazy high,” he said.
Shrimp & Grits at Everytable. | Photo by Lisa Jennings
He employs two part-time workers, and he’s eager to open a second unit. He worked previously as an operations manager for a logistics company, so he feels well prepared.
Everytable’s reset over the past few months did not phase Aguilar.
“My faith is very strong,” he said. Scripture says to take one day at a time.
Becoming an owner was a complete change in mindset, he said. “I worked full time for others, but now doing it for myself, it doesn’t feel like work.”
Is more better?
One of the aspects of Everytable’s reset is a plan to get franchise operators into multiple stores more quickly.
Ideally, Polk would like to see most of the remaining 36 company units be refranchised, though some will remain corporate owned for training and testing.
So rather than starting with one unit as an owner, as Cabrera and Aguilar did, the next crop of franchisees will start with four.
“We’re pretty excited about both the operation model we’ve built to support that but also that these franchisees have now an opportunity to run a multiple seven-figure business, north of $5 million in total sales, in their first couple of years,” said Polk.
Polk, meanwhile, is creating a new Social Equity Franchise loan fund that would operate as a separate nonprofit, so foundations and high-net-worth individuals can contribute to help the social equity franchisees get into their units. The goal will be to raise at least $5 million or up to $10 million, he hasn’t yet decided.
Dee Garrett, Everytable’s support manager for operations and franchise, said the next two owners will probably launch in September, and they’ll get four units, right off the bat.
To prepare, each has been working as an area manager operating six units, she said, so four will seem easy.
Garrett, who has been working at Everytable for six years, said she spent three decades before that working for Carl’s Jr.
At Everytable, she started as a store manager and went through the franchisee training program. She was in line to become the first franchise owner last year, but she said a personal issue prevented that from happening.
“It was heartbreaking,” she said. “This was a dream come true for me, doing all the work and getting prepared. It was something that was hard to swallow at the time.”
Instead, however, Garrett was asked to join the corporate team, helping the new franchisees cut through the paperwork and processes of taking over the business.
“I love what I’m doing. It’s for a great mission. It’s for a great cause,” she said. “I share the same vision as our CEO Sam does. I really want to see food justice in every community. We all deserve healthier options, and to make them more affordable, and not to have to go out of your community to have that healthier lifestyle.”
She still thinks about becoming a franchisee someday.
“Sam told me we could always revisit it,” she said. “He said, ‘We’re doing a lot of things to bring more revenue to the stores.’ And he has proved that, he has shown that, and I see that today in all our stores.”