Hello Im Edwin,20 from chicago i been working in fast food for 3 years. Dunkin Donuts ,Mcdanolds ,I really want to open a Subway cause I know how to run a store/shift people want a clean store and friendly fast service .And i want good income Im saving up I need like $150,000 one day when I open my Subway i going to work. Really hard cause i know is risky bussiness it not easy but if you work hard and do research it will work out .
To do list
find a good location
If i had a Subway that make's like $40,000 i have to save $30,000 the rest to pay bill/Employe's
I am interested in opening a subway franchise in South Florida.
My friend and I will be opening up this as a partnership. Is there any money to be made off of one location with two people sharing the proceeds?
As owners are we able to draw a salary from working in the location? What is the average salary to be earned?
Do you suggest opening a new Subway or purchase an existing location?
What advise could you give to someone looking to change careers and starting up a new business?
Thank you all for your help.
If all your subs are $5.00 you will not make much money unless your rent is also ridiculously low or you own your own building
Payroll runs about 20%, Food cost about 30%, Royalties 12.5%
Now pay the Rent and utilities etc-"Operating costs"
Nothing left.....that is why you sell 6 inch subs, drinks and chips etc and have other subs priced at over $5
Your question is rather redundant. We should talk.......949-253-4610
Seriously looking into buying into a Subway franchise in Los Angeles area but was hesitant until reading the above posts. Thank you all for the wealth of information. Does anyone have any further words of wisdom?
I work with buyers all over USA, CAN and the rest of the world....15 countries so far.
My advice is similiar to all USA inquiries; I happen to be based in the Los Angeles area
You are on the right track.....but you should consider that, as an example, the first 100 customers pay for all the fixed expenses and get you to reach break-even, then the additional customers over 100 start to contribute to your profit at a much higher rate. In the case of Subway, it is between 40 and 45% of the sales over break-even
So for those who did not follow, it is called Contribution Margin and incremental sales are worth a fortune at the 45% level
Fayaz Karim, Subway specialist with mrfranchiseman.com, 22 years at it!
Subway absentee owner...min hours for owner...
Subway expects all owners to work in their store and take full responsibility, so expect 40-50 hours a week, until you find that great employee you can depend on and/or get lazy, then you can slack off a little and run it by the numbers with minmum attention. That is how most people got to become multi-unit owners. Better make sure employee training is first rate since you are dealing with food safety.......
I have 22 years with the Subway brand, mrfranchiseman.com
Subwayowner, thank you for your positively toned post and facts
Regarding the hours an owner need to work, you are right that Corporate does not mandate anything. However, the DA is expecting your "involvement" when you have only one or two stores. Multi-unit owners have a different management and supervisory structure, so owners spend less time on the line in the store. Since most of the questions here are from people trying to get into their first one, it is appropriate to warn them to expect to work 40-45 hrs a week in the first few months.
Furthermore, if they are to achieve the 20-25% net you have mentioned, that is definitely from an owner operated store putting in lots of hours and with a great low monthly rental factor. Most of the stores I see and sell, are below this 20% figure
Lastly, I agree there are Real Estate deals to be had in this market. The problem in some areas is that new stores are reserved for existing owners, and only a few areas are open to new franchisees, so DA development continues but on a selective basis
Jobsearcher, you need some more serious information such as:
SALES and trends(Get his COMBO report)
Total monthly rental burden
Length of lease and terms
Min wage in that State
From this I can usually calculate his cash flow and the price you should pay as I have a huge database of information to work from and do this for a living on a daily basis.
You say sounds like a good deal? I cannot say anything as there are no facts to work from.
As a Subway transfer specialist asisting buyers and sellers, I have heard many variations of this criteria. They need a high net worth because they would like you to be able to grow within the franchise after buying your first one This will take money, so they want to make sure you can afford your second or third one; they are not so inclined towards single purchasers. We can debate this if you care to call me
Response to nevadascul and jenncug above
You actually do not need, should not need 400k to cover negative cash flow for one year; if you are projecting that bleed rate, do not buy that store. If you are not sure of the projected cash flow based on Sales and Rent, contact me , as others have done, to find a reliable projection of actual cash flow and buy the store at a reasonable price. Most people get rich on Subway with 2 or 3 stores or more, not on one store. For new prospective owners-you can usually buy only one store at a time.
mrfranchiseman.com, Subway specialist
Anyone needing Subway information can contact me. I have the latest cash flows and valuations...firstname.lastname@example.org