Montreal-based convenience retailer KaleMart24 is preparing for a significant expansion across Canada, with additional Toronto locations, a potential entry into British Columbia and longer-term plans for the United States. The company is pursuing a goal of 100 stores by the end of 2027, although founder Sam Saoudi acknowledges that franchise commitments could reach that milestone before all locations are operational.
Saoudi said KaleMart24 currently has 10 operating stores and 24 franchise agreements across Quebec and Ontario, with 17 locations described as being under build-out. The company, which specializes in healthier packaged foods, prepared meals and beverages, recently opened its first Toronto store at 601 Yonge Street and is pursuing additional opportunities in Ontario.
In a recent Retail Insider Podcast interview, Saoudi and Tony Flanz, founder of commercial real estate brokerage Think Retail, discussed the company’s expansion plans, the economics behind its business model and the real estate strategy guiding its growth.
Toronto Expansion and the Search for Prime Retail Space
KaleMart24’s first Toronto location opened at the corner of Yonge and Gloucester streets, bringing its assortment of better-for-you packaged foods, prepared meals, smoothies, açaí bowls and beverages to a densely populated downtown neighbourhood.
During a visit shortly after the opening, the store was busy with customers, many of them younger shoppers. The merchandise included a range of health-focused products available elsewhere through specialty retailers and online channels, brought together in a relatively compact neighbourhood format.
Flanz said the opening has generated considerable interest among prospective franchisees, including those who wanted to see an operating store before committing to the business.
“We’ve been super active. As you know, we just opened our first store in Toronto,” Flanz said. “We’re advanced, working on a second deal, which is wonderful as well. And I have a lineup of prospects for franchisees.”
Saoudi said four of the company’s franchise agreements are in Ontario, with additional prospective operators interested in entering the market.
For future Toronto locations, Think Retail is concentrating on neighbourhoods with substantial pedestrian traffic and demographics that align with KaleMart24’s customer base. Flanz identified the Financial District, Entertainment District, Liberty Village, Distillery District and Yonge-Eglinton as particularly attractive areas.
The company also sees opportunities elsewhere in Ontario, with markets such as Oakville and London offering potential as suitable franchisees and locations become available.
Securing those locations presents challenges. Flanz said Toronto’s retail leasing market is considerably more competitive than Montreal’s, particularly in desirable urban neighbourhoods.
“There’s more competition here in Toronto, a lot more competition than in Montreal,” he said.
Ontario landlords also tend to impose more demanding financial requirements, including guarantees, indemnities and security deposits. Flanz said the company must be prepared to act quickly when an attractive location becomes available, while ensuring that each deal meets its investment and operating criteria.
Why Location Matters to KaleMart24
KaleMart24’s preferred stores typically measure between 1,200 and 1,500 square feet, although the company has successfully operated both smaller and larger formats.
Flanz said the ideal site is surrounded by a dense population of Millennials and Generation Z consumers, with pedestrian activity throughout the week and into the evening.
“I think for us, the ideal location is an area that’s densely populated with Gen Zs and Millennials,” he said. “It’s got seven-day pedestrian traffic, high pedestrian traffic, seven days a week, night and day.”
Strong storefront visibility is important, as is proximity to businesses that attract similar customers. Flanz pointed to restaurants, coffee shops, gyms, pharmacies and Pilates studios as complementary neighbours.
The company has tested different formats in Montreal, including a small store near Jarry Metro station and a larger location near the Bell Centre. These experiences have helped establish a flexible approach to store sizing based on anticipated customer volumes, neighbourhood demographics and occupancy costs.
Although streetfront retail remains the preferred format, KaleMart24 is preparing to open locations at Royalmount and Montreal Eaton Centre, two prominent Montreal shopping destinations.
Flanz explained that conventional enclosed-mall locations are generally less attractive because shopping-centre operating hours can limit early-morning and late-evening business. The company also wants flexibility in store design and access to customers throughout the day.
Royalmount presented an exception. KaleMart24 secured a smaller space near the pedestrian connection to the Metro, across from Starbucks, where it expects to benefit from substantial transit-related foot traffic. The compact footprint will allow the retailer to concentrate on its strongest-selling products.
At Montreal Eaton Centre, a location near the Réseau express métropolitain (REM) connection offers similar advantages, including access to commuters moving through the downtown core.
Flanz said the company remains open to additional shopping-centre opportunities, but only where locations offer the visibility, accessibility and sales potential needed to support the business.
The retailer is also interested in unconventional settings such as airports and hospitals, where substantial pedestrian volumes could make the concept attractive.
A Convenience Store Built Around Different Economics
KaleMart24’s expansion strategy is closely tied to a merchandise model that differs from traditional convenience retail.
Saoudi developed the concept after founding Toro Matcha, a matcha-based energy drink company. His experience in the health and wellness sector, including exposure to products in Europe and Asia, convinced him that North American convenience stores were underserved when it came to healthier packaged foods and ready-to-eat options.
The first KaleMart24 store opened in March 2024. The company initially tested two different footprints, including a location of approximately 400 square feet and another measuring about 1,200 square feet.
Saoudi said the performance of those early stores demonstrated that customers were willing to visit convenience retailers primarily for packaged foods and prepared products, rather than the cigarettes, alcohol and lottery products traditionally associated with the sector.
According to Saoudi, approximately 70% of KaleMart24’s sales come from packaged foods and ready-to-eat items. Cigarettes and alcohol remain part of the merchandise mix, but represent a considerably smaller share of sales.
That distinction has implications for merchandise margins. Saoudi said packaged foods and prepared products generate gross margins ranging from approximately 40% to 60%, compared with lower margins on traditional convenience-store categories.
“For us, our focus is more on the packaged products and ready-to-eat items, where our margins are between 40% to 60%,” he said.
These are company-reported merchandise margins rather than overall store profit margins, which are also affected by rent, labour, operating expenses and other costs. Nevertheless, Saoudi believes the product mix gives franchisees an opportunity to generate stronger returns than a business heavily dependent on lower-margin merchandise.
Prepared foods have become an important part of the concept. KaleMart24 offers açaí bowls, sandwiches, wraps, smoothies, coffee and matcha beverages, alongside packaged snacks and other health-focused products.
Saoudi said açaí bowls are among the company’s best-selling items, while sandwiches, smoothies and beverages help bring customers into stores throughout the day. Those visits also create opportunities for additional purchases.
The company has introduced a beverage subscription program that allows customers to obtain coffee or matcha beverages across its network, subject to a limit of one beverage every 30 minutes and restrictions on sharing memberships.
Saoudi described the program as a way to encourage frequent visits while introducing more consumers to the broader merchandise assortment.
Flanz said customers have responded positively to finding products in one location that they previously purchased from multiple specialty retailers or online stores.
That combination of convenience, product discovery and prepared food is central to the company’s effort to build repeat business.
Vancouver and Whistler Among Western Canadian Targets
While Quebec and Ontario remain the company’s principal markets, KaleMart24 is beginning to look west. Saoudi identified Vancouver and Whistler as priorities for future expansion, saying he has been discussing potential locations with Flanz.
“We’re looking at Vancouver as a big market for us, and Whistler as well, so BC in general,” Saoudi said.
No British Columbia leases or opening dates were confirmed during the interview, but the company believes the province offers opportunities for its assortment of healthier packaged foods and prepared products.
Flanz said the flexibility of the concept could also support expansion into markets with different customer volumes and purchasing patterns. Rather than using a single store size everywhere, KaleMart24 can adjust its footprint and merchandise selection to suit individual locations.
That approach may become increasingly important as the company expands beyond dense urban neighbourhoods into additional Canadian markets.
U.S. Expansion Plans Taking Shape
KaleMart24 is also preparing for an eventual entry into the United States, although both executives emphasized that Canadian expansion remains the immediate priority.
Saoudi said the company has been investing in the legal and organizational requirements for American franchising, including disclosure documents, franchise agreements, corporate structures and operational support. He said KaleMart24 has already received inquiries from prospective American franchisees, with interest coming from several regions.
Flanz identified California, Texas, Florida, New York and potentially Massachusetts as markets that could be attractive for the concept. However, he emphasized that the company should establish a stronger Canadian footprint before committing to an aggressive American rollout.
“I always tell Sam, on the conservative side, let’s walk before we run,” Flanz said.
For now, the company’s priorities include securing additional Toronto locations, pursuing its first British Columbia store and opening its planned locations at Royalmount and Montreal Eaton Centre.
Saoudi’s ambition to reach 100 stores by the end of 2027 would represent a substantial expansion from the current network. He acknowledged that the availability of suitable real estate could affect the pace of openings, meaning the company may reach 100 franchise commitments before achieving the same number of operating locations.
The next phase will test KaleMart24’s ability to replicate its health-focused convenience model across different markets while maintaining the product assortment, location quality and operating economics that have supported its early growth.
For Flanz and the Think Retail team, that means finding enough suitable retail space to keep pace with a growing network of franchisees and a founder with ambitious plans for the business.
