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whats the average income of a subway restaurant owner?

    • 53 posts
    October 25, 2010 8:16 AM EDT

    Response to Masterstylz SUBWAY post above:

    For a conversation in a bar setting, the 70% of sales figure you used as a price of your $365,000 sales store, is a good starting point for a buying analysis. The fact that you end up, with your numbers at a 10% ROI is indicative that either your price is too high or your other numbers for expenses and therefore NET are not quite right. If you are OK with a 10% return, then the price is right for you!

    There are many other questions you must ask about the store before buying of course.

    Secondly, as you point out, take out your debt service too so you know cash flow left over for you to take home........then you will know if the deal structure is right for you or not right for you. You will discover that a higher sales store will cash flow better and make more sense generally.

    But there are not that many stores for sale on the market compared to the number of stores in the Subway franchise system-I disagree with you here. What you may be seeing is mostly mediocre stores for sale, and rarely the high volume ones, which I get to sell sometimes.........

     

    mrfranchiseman.com, specialising in the Subway brand

    949-253-4610 

    • 53 posts
    November 4, 2010 11:36 AM EDT

    DEPUTAT, CPA

    Love these discussions and where they lead. I take an average of 3 calls a day addressing the same issues and going over the same information-once in a while someone is actually very serious and I can walk him through the process and analyse his numbers with him, and then he is thankful for the enlightening experience, positive or negative. I only speak the truth and lay it out for you.

    CPA-do not treat this as an investment. Returns will be lower, Subway will not like it if you are not involved, and chances of you getting this location are slim to none. I have 23 years insight into this subject and deal with Divorce valuations, buyer reviews and cash flows for everyone interested. SBA loan will require 50% down in this market I believe, so there ay not be much left for you !!!

     

    mrfranchiseman.com

    Fayaz Karim 

    • 53 posts
    January 11, 2011 6:08 AM EST

    XYZZYMAN

    Good questions!

    You are on the right track, and using your numbers as an example, you should be able to accumulate several stores. As you progress, you will encounter the following turbulent weather patterns:

    1. There will be fewer and fewer good opportunities for opening new stores for you personally, as there are others already in the system who are waiting for new stores, so you are the new kid on the block and competing with them

    2. To enter the Subway system today, you will most likely have to buy an existing store and "prove" yourself worthy for a 2nd and 3rd

    3. Leverage is the way you spread out your $1 million. There are many banks who love Subway and are willing to loan you money. That is an entirely different subject

    4. The amount of money you make will depend on the Sales and Rents you obtain. Remember too that your plan will now necessitate a Managerial staff which will be a burden to your cash flow, but will free you up to focus on development and the day to day problems and fire fighting

    5. The guys you know who have many stores, all paid off, got in several years ago(like 10-15 yrs ago) when development was still happening at a good pace and costs were lower to build and banks were loose with their money. I got in in 1986 when there were only 586 stores in the system.......

    6. Subway has matured as a brand, average store sales are up 85% over the past 10 years, making the profitability calculation fantastic for old owners-especially when all stores are paid off. The market today is tighter, by that I mean less people able to get in, and your slice of the the Sales pie is smaller, but still viable. 70% of all stores sold today are sold to existing owners adding to their portfolio, and there are less stores available for sale as owners are hanging on to their cash cows.

    I could go on for an hour on this topic , but......I hope this helps you and others...!

     

    www.mrfranchiseman.com

    • 53 posts
    January 7, 2011 6:06 AM EST

    Employees with questionable ethics and behaviour abound in all franchise systems , not just Subway. There is temptation for them everywhere. But Subway does have great systems for tracking costs, inventory shortages, cash problems, etc. If there is a thief, it will tell you there is one, but not necessarily who it is, until you drill down and keep watching and do the shift changes as recommended, and start spying more intently. Donuts, Sandwiches, Burger franchises, etc all have similar problems. The problem is the people, not the Franchise.

     

    mrfranchiseman, 23 yr Subway specialist, www.mrfranchiseman.com

    • 53 posts
    November 29, 2010 10:46 AM EST

    Irishmen..

    Sounds like a good location based on brief demographics presented. 600 sq ft is to small and will end up as a take-out only. It will be a tight squeeze operation and you will be pumping out the subs, but that is the beauty of this concept - very adaptable and can be done in tight spots.

    Rent sound very doable and reasonable. You will need 15,000 euros sales per month to make a profit, but 20,000 should cover your debt payments too. This is a very rough calculation for now

    100% financing ? 100,000 Euros......not a good idea and I believe you may  need 150,000 euros for soft and hard costs, but only the Irish DA can answer that. Caveat: talk to him first without revealing the location; you could end up with a situation where you just handed him a great location and shot yourself in the foot.....

    Call me anytime, or e mail me

    949-253-4610, Fayaz Karim

    • 53 posts
    February 2, 2011 8:20 AM EST

    I prefer and recommend the existing store method of entry into Subway for first time buyers

     

    Call me and we can discuss this off line, as there is much to talk about

     

    Fayaz, www.mrfranchiseman.com. 949-253-4610

    • 53 posts
    February 7, 2011 8:58 AM EST

    RST73

    3 years Combo report.....the Combo report shows the current year and past 2 years sales and some infor for the past 10 months. The DA WILL NOT give this to you unless it is his store. It is up to the owner

     

    I await your contact

     

    Fayaz Karim

    949-253-4610

     

    GCSPARTAN---I answered you by e mail letter, check your box on this site

     

    Fayaz

    • 53 posts
    March 2, 2011 2:41 AM EST

    DOC750, gas station site

    If your site fits into the overall development strategy for the Development Agent(Subway subcontractor) for the area they would love to sell you a new franchise. They will evaluate the potential for the site to make sure it has the basic ingredients for success and also fits their image(no run down locations, perhaps).

    You need some site demographics such as: vehicles per day in both directions or on the corner, access to the site(ingress, egress), its visibility, signage available and then of course the working, living , transient population around your store, and income levels. Lastly, you must pass some basic skills test for Subway, make a business plan, get through the interview, and go for training.

    Did I mention you better have some money ??!!

    That is the shortest and best answer I can give you in this forum

    Please contact me by e mail, fayaz@mrfranchiseman.com, then we can chat.

    • 53 posts
    March 11, 2011 5:35 PM EST

    Location Question Briank

    I tried the link for a private message and it did not work, so here goes for everyone to read. IF you need a more in depth answer,   email me or call me off my website number, 800-401-6424

    Subway DA's do not have to give you the location you choose before being approved. However you can get a Specific location rider to your franchise agreement I believe, which basically says : "if I get that (Mall?) location at 123A Main Street, and an approval, then I will commit to the franchise. But, as you so rightly point out, now that they know the location, you can lose it just as fast by not being approved, or the lease not being approved, or something....then within 12 months you will see a Subway there, or next door, such as 123B Main St. Their rationale is that 123A is different from 123B, or we had to negotiate a different lease with different terms, so it was not the same deal as you had, or the landlord came begging after you were declined on the deal, or the landlord would not have approved you, etc , etc........they will find a way out to justify the site to themselves. They do not owe you an explanation.

    It will most likely go to another EXISTING franchisee .

    In their defense, sometimes they are better off giving new locations to good, existing, dependable franchisees adding to their collection of Subway stores. Also, not every new franchisee can handle a fantastic location-it may be too much for them and the DA ends up having to ease the franchisee out for poor performance.

    I hope some of this helps, but as you can read between the lines, there is much more to this story than I can discuss here.

     email me or call me

    fayaz@mrfranchiseman.com

    • 53 posts
    March 16, 2011 10:30 AM EDT

    Subway in a Foreign Country...

     

    Before you get all crazy about everything, I urge you to talk to me as I opened Subway in a foreign country and learned a lot from my experience, positive and negative. I speak the truth if you dare to ask. I will tell you the good, the bad and the ugly.........your question cannot be answered on this forum. All depends on Rents, Utiliy costs, food costs and labour costs..... E mail me or call

     

    fayaz@mrfranchiseman.com, 949-253-4610

    • 53 posts
    April 3, 2011 6:41 PM EDT

    Toastmantom,

    Great idea to acquire over 10 yrs.......it is possible and others have done it.

    General formula..........50-80% of sales depending on many other important factors, not all equal.......I tweak the valuations according to facts and with some science and rationale behind it a Valuation expert with a database of actual transactions

    Cannot give formula ........Valuation is mostly science, but partly art..

     

    Anyone who uses a RULE OF THUMB will likely get their thumb cut off one day......!

     

    mrfranchiseman.com

    949-253-4610

    • 53 posts
    April 4, 2011 5:19 PM EDT

    toastmantom

     

    Price is determined between a willing buyer and willing seller, and after some interference and influence by others. Value is determined between a willing buyer and willing seller, both knowing all the relevant facts, and without any compulsion to act

     

    The above is my response and thought for today !

     

    Fayaz Karim, mrfranchiseman.com

    • 53 posts
    May 5, 2011 7:39 AM EDT

    richby25

     

    Subway will do its own survey of the location and use the metrics it feels are important-Population, average income in area, visibility, parking, daytime workers, foot traffic, vehicles per day at location etc, etc...

    You do not have enough money to start. Need at least $100,000 to enter as a first time franchisee. Must pass a Math and English proficiency test, do a business plan after showing some money, and pass interview, then go for training and pass that too.

    This is a short but loaded answer

    E mail me or call me if you need to know a little more

    fayaz@,rfranchiseman.com, 949-253-4610

    • 53 posts
    May 8, 2011 11:31 AM EDT

    gasstation

     

    Your questions are loaded and wll take much time to digest and analyse to give you a proper answer. You really need to sign up for my time so I can help you as I cannot spend 3 hrs answering you on this forum.

    But your Subway sales are pathetically low, and the owner has NO EXCLUSIVE on the territory no matter what he says. The deal smells bad.

    Your Gas Station needs to be economically justifiable on its own , and Subway would be add on sales or vice versa.

    Subway stays in  his name and you get in for no money down......smells bad again. What do you get out of it after you have built it up as a Gas Stn or a Subway or both ? he is still the franchisee !

     

    Better call me and talk to me offline

    mrfranchiseman.com, 949-253-4610

    • 53 posts
    June 27, 2011 8:22 AM EDT

    jayb174

     

    As I try to say in most posts, there is too  much to post here for a fair answer, we need to talk, so call me.

    4 men in a boat to nowhere, two rowing, the other two just kicking back before they get kicked off........better have  a very good partnership ageement between you and hope your friendship survives the potential partnership break up.

     

    You need cash up front to get into a decent deal. Sounds like 4 nice guys with great enthusiasm and no cash. Not good for Subway. Only one or two of you will be on the Franchise Agreement and get approval. Subway is not good for multi party ownership-there is not enough money in it and working like a dog gets old very quickly. That is why we need to talk....949-253-4610, Calif time

    Regards

     

    mrfranchiseman

    • 53 posts
    July 21, 2011 7:24 AM EDT

    Alex, EDwin, Shingic

    You have all read my posts, and every time I say call me to discuss as each set of circumstances is different and a verbal explanation/interaction will be more beneficial to you; one question leads to another, so it is easier by phone........

    Once I know the real question and the groundwork has been properly laid, I can proceed to answer each person.

    Shingic states an investment of $90,000, 30-40% margins, and India vs USA, and more. That is a lot of clutter and confusion and erroneous information so it needs to be cleaned up and set straight.

    If it is important, call me.......otherwise......

    Fayaz, www.mrfranchiseman.com, 949-253-4610

    • 53 posts
    August 31, 2011 8:09 AM EDT

    JUVIAN

    Subway does not need you to have experience, they teach you everything (just about)

    How long? different times in different areas, but expect 4-6 months before you get the keys to a store you want to buy

     

    fayaz@mrfranchiseman.com

    • 53 posts
    November 25, 2011 3:37 PM EST

    Packlightly, I have to disagree with your interpretation

    If you have a Subway with sales of 300000, a year and a rent of 4000 a month, and then another Subway with 400,000 sales and 7,000 rent per month, should we just average the net income of each and say that is the average across the nation , thereby MISLEADING people? should we say that all Subways make 25% on sales and MISLEAD them?

    or should we calculate each individual situation for the person looking for an answer?

    Finally try this: if I put my left foot in a bucket of ice cold water and my right foot in very hot water, does that mean on average I am WARM?

    Packlightly, please do not visit my website....you might learn something

    mrfranchiseman 

    • 53 posts
    December 10, 2011 4:41 AM EST

    Subwayndas----you need the COMBO report as it has much more information nthan the 52 week sales report.

     

    TEDSTR.............Yes it is a good ROI, but remember( using your numbers) you are probably working 40 hrs a week for that 60k so you should factor in the value of your time, or pay yourself something first, then calculate your ROI

    I say buy an existing store because in many areas(not all) the right to open a new Subway is reserved for existing owners, so the only way to enter is by buying an existing store, and you get cash flow from day one  plus you know the history. The ones that are for resale can be problems as far as low sales are concerned, but then you adjust the price accordingly or you do not buy it if it does not meet a certain threshold of profit for you. This why I look at what you need and what you want to accomplish, and what the Subway offers and I check out the landscape you are going to enter. So I have been in situations where I would advise one buyer not to buy a store based on his needs and then tell another to buy at a certain price as it DOES fit his needs; however if the store has serious issues, perhaps neither should buy it until the issues are resolved

    Fayaz Karim, mrfranchiseman

    • 53 posts
    December 10, 2011 4:41 AM EST

    Subwayndas----you need the COMBO report as it has much more information nthan the 52 week sales report.

     

    TEDSTR.............Yes it is a good ROI, but remember( using your numbers) you are probably working 40 hrs a week for that 60k so you should factor in the value of your time, or pay yourself something first, then calculate your ROI

    I say buy an existing store because in many areas(not all) the right to open a new Subway is reserved for existing owners, so the only way to enter is by buying an existing store, and you get cash flow from day one  plus you know the history. The ones that are for resale can be problems as far as low sales are concerned, but then you adjust the price accordingly or you do not buy it if it does not meet a certain threshold of profit for you. This why I look at what you need and what you want to accomplish, and what the Subway offers and I check out the landscape you are going to enter. So I have been in situations where I would advise one buyer not to buy a store based on his needs and then tell another to buy at a certain price as it DOES fit his needs; however if the store has serious issues, perhaps neither should buy it until the issues are resolved

    Fayaz Karim, mrfranchiseman

    • 53 posts
    March 15, 2012 7:21 AM EDT

    My website posts what I have access to at www.mrfranchiseman.com

    Subway discourages such postings from brokers

    Not all stores that are for sale are identified as such for internal reasons. The ones that are on the Subway website are of poor performance and you take your chances.

    I have developed methodology to access some of these hidden gems that are out there, and have some success at it, but it is time consuming, requires discipline and an ability to talk to owners. As a previous owner of 9 Subway stores and as a former Development Agent, I know how to achieve this as long as you are a qualified and approved buyer.

    Fayaz Karim, mrfranchiseman

    • 53 posts
    April 18, 2012 5:27 AM EDT

    ricky 1

    BREAK EVEN ON A 5,000 RENT PER MONTH IS 5,000 A WEEK IN SALES, THAT IS AS AN OWNER WORKING 40 HOURS A WEEK AND NO DEBT PAYMENTS

     

    MRFRANCHISEMAN

    • 53 posts
    April 24, 2012 6:15 AM EDT

    I checked this information on this site Gallitin.....I could not disagree with you more. Barely written in comprehendible English, and some facts are wrong. Does not even answer the question...so what are you talking about?

     

    mrfranchiseman

    • 53 posts
    May 1, 2012 1:15 PM EDT

    Juanjo

     

    With most Quizno's you can name your price. Be very careful with this brand, do your due diligence before signing anything, the company is in financial HELL...

     

    mrfranchiseman

    • 53 posts
    May 21, 2012 10:01 AM EDT

    Perterwoofer and Cambycam

    Labour can run 18-22%, depending on the labour rate in your State/City. That is with the owner having worked 40 hours a week, 20 of which would be making sandwiches or at the cash register...

    Cambycam: I used to be an owner, now I am a broker and so I see hundreds of financials and create many for buyers and for analysis. 20% net profit is possible, but NOT the norm. I have seen 23%, and I have seen 10%, and break even. Be careful not to use generalisations in your projections. Each existing store has numbers that can be worked to get a reliable indication of what sort of profit can be made per month, NOT counting equity build up and debt service..

     

    mrfranchiseman, 25 years with the Subway brand