Re: Subway Franchisee
1. Time spent managing locations.
It depends on your manager. At my high volume store I can afford to pay a good manager who takes care of most details of the store. I spend perhaps 5 hours a week at most, and I do cover shifts the employees miss ( almost all teenagers and young 20's ) My low volume store does not have a well paid manager so I spend about 10 hours a week there. It is easy to delegate most duties to your employees though, most can be done by anyone of average intelligence. I recently took a 10 day vacation to Florida and the stores ran by themselves perfectly fine.
2. Expandability
I did not start rich so not in the near future. After I pay off my business acquistion loan I certainly could. I know people who run 5-7 Subways by themselves just fine. I can see 3-4 being very easy and feasible. The more you have the easier it can be sometimes. 3 is prolly a good number.
3. I was a manager at a Domino's and considered going into business with my former Franchisee. Our specific deal fell thru and then I looked around and saw how good Subway looked. ( BTW pizza chains are all doing bad right now, not sure why )I learned a lot about management and people skills here. People naturally like me, this helps keep employees. I have insanely low turnover for a Subway. But if your an ass you can keep costs low since all the new hires make less. This will prevent building sales though, since your employees will suck.
Some figures for Jay.
First off im young late 20's I bought a house before the boom and it appreciated giving me unexpected access to 50,000. I then borrowed some more from my family as well. I bought 2 existing stores, 1 very good ( top 5 in area ) 1 pretty bad ( bottom 10 in area ). Got a good discount from an absentee owner. Both sites have low fixed costs ( ie rent ) which made the bad store far more bearable. The slow store was also very very poorly run and I knew I could turn it around. It is now up 25 percent from the year before, this still only puts it at around 20% below store area average but it now makes money. The high volume store is now my priority for driving up sales. So far since I have started working on sales their's are up as well.
Start up costs.
I used an SBA loan. They will finance 75-85% of purchase amount. So you need 15-25% of whatever you want to buy or build. Prime +2.75% loan term between 5-10 years, adjusted quarterly. If you want 10 years you need at least 10 years on the site lease. Just have a reasonable credit score and you will qualify.
Lawyers fees, vary between 3-6k ( use one or be screwed )
Franchise fee 15k for new, 7.5k transfer fee for buying existing
What old owner never fixed varies 5k-15k ( trust me [censored] is broken and you dont know it )
Beyond this I would have 30-50k in oh crap money. Ya never know what might break or if the city decides to spend a year directing traffic away from your store etc.
Rewards: your profit margin on an average Subway should be between 9-15% of gross sales. Average sales is around 6500-7500 per week
Above average 12-18%
Below average 0-10% if low enough you wont make any. If its a slow store and a high rent run away.
For a new store:
Equipment: 50kish
Fran fee: 15k
Leasehold improvements: varies on site 15-40k ( do a lot yourself and it can be as low as 5-10k though its very hard work )
Prolly missing something I have never built a new store. Some cost 90k average around 125-150k and in expensive areas 150-180k.
- Mandor_TFL
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