One of the biggest risks involved with investing in smaller companies is that they sometimes have a highly concentrated source of revenue. Until recently, TurboChef (NASDAQ:OVEN) relied on Subway as its primary customer. And while the company is seeing growing demand from commercial establishments, its three major customers still account for 69% of the company's total revenue. If any of them decide to cut back on their orders, revenue would be rocked and your investment could plummet.

Yet there's opportunity available there, as well. Both Starbucks (NASDAQ:SBUX) and Dunkin' Donuts realized that it will take more than coffee and donuts or scones to woo the morning coffee crowd away from McDonald's (NYSE:MCD), and they've installed TurboChef ovens to make hot sandwiches for customers. The company is also experimenting with a home version of its ovens.

Subway has become a decreasing component of overall revenue for the oven maker. Where the sandwich chain represented nearly a third of sales last year, it accounted for only 12% of TurboChef's revenue this past quarter.

There's obviously lots of opportunity for food-service companies to offer hot cooked foods that don't taste like they just popped out of a microwave oven. The difference is in TurboChef's technology, which combines microwaves, convection, and something called "air impingement" technology. Sales rose 140% over last year and 41% over the second quarter, while gross margins rose to 40%, reflecting those higher sales volumes.

The trend of using these new warming technologies has been growing. In fact, our Motley Fool Hidden Gems recommendation Middleby (NASDAQ:MIDD) saw fit to buy the assets of ventless oven maker Wells Bloomfield this past August to get in on the heat rising in fast-food kitchens.

The competition may not be sitting idly by, letting TurboChef steal potential customers, but the oven maker isn't waiting, either. It launched a new partnership with Sara Lee (NYSE:SLE) to offer sandwiches toasted in TurboChef's Tornado ovens to food-service channels, and 7-Eleven would seem to be a natural new customer.

A developing company has got to start somewhere, and having just a handful of customers is not as critical if it's growing its client base along the way. TurboChef is building a brand -- and it's beginning to look like one that may bring warm, toasty returns.

Warm up to TurboChef with these related Foolish articles:

Middleby is a Hidden Gems recommendation. Starbucks is a Stock Advisor pick. Cook up some market-beating returns with any of our investment services free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.