15% profit means after all expenses are paid, so that is the cash flow you take home. The difficulty arises when some people work 80 hours a week or 20 hours a week, and you don't know what number of hours each owner is talking about. Assume 40 hours as that would be a normal assumption......then arises the question of whether that cash flow is before or after debt service...and so the inaccuracies go on, as some people also lease equipment.....they hire managers because they don't want to do the work........GOT IT???
Rather a strange post. You could also potentially make min wage in your own business.....if you calculate the numbers you will know what you are going to make before you buy a store, and conversely you can then set your price and the seller can take it or leave it.
Remember too that entry into a franchise also gives you a good education and opens up new opportunities; that is how so many Subway owners became multiunit owners and entered other brands. Following your methodology, they would still be sandwich artists.
Subway, despite some rough times in the 90's, has become one of the most successful franchises in history, and has made more millionaires than any other franchise. You should be fine if you get some expert help in evaluating the opportunity.
Want to reconsider your comment?
1 How to get started. All on my website under Articles; then call me for clarifications
2. Keep jobs, oversee a Subway or two. Not a good idea, they generally do not like that.
Need to be involved and take care of investment and their expectations. Family member could do it too, but I have to explain when you call
3. That is exactly how you grow and how others did it....one at a time
4. Multiunit ownership is possible, but used to be much easier 15 years ago. Having said that, many years ago 5 would have been a good number, today maybe you only need 2 or 3 as sales and profits are up....
mrfranchiseman.com, call me off my website number or e mail me
For some general Subway or franchise advice for a few minutes there is never a charge as I enjoy doing it. But when I need to spend an hour or two and get the calculator out, (after sharpening my pencil !), I have to charge something......
You should call me to see if I can even help you and make your journey into entrepreneurship a little smoother. You will always learn something from me...guaranteed.
I am researching Subway financials for my boss who is looking to open one in our town. Is there a place to get ballpark rough estimates for what is reasonable for sales, expenses, etc? I've found some things that break expenses as % of sales, which is fine, but just wanted to get a feel for whats a good range for sales to start out in.
Thanks in advance.
Brad. I am not aware of any reliable information online that would answer your question. However, I do get many questions every week from all over the world about this and related topics. I am a Consultant with a Subway specialty, if you wish to avail yourself of my services you need to get in touch. This is a $200k investment for your boss, so you should get the right research done, as you are trying, so that your path ahead is smoother.
I have 25 years with the Subway brand and know it inside and out
Call/e mail me and see if I can help. This week I helped 8 people with similar questions.
Fayaz@mrfranchiseman.com, Fayaz Karim
I’m thinking of opening a Subway in a few years but worried about the competition. I live in the Chicago area which is pretty much saturated with Subway’s. As a result, I’m not sure what would make the people come to my store oppose to the others (all things considered equal; good service, clean, fast ordering, etc) McDonald’s for instance has a Rock N’ Roll themed store located in downtown Chicago that is always full of customers and I have heard of several others. Does Subway do or are they thinking about doing themed stores in the future? Do you think they would allow this? Finally, as an owner, do I have right to run my own promotions and alike? Say, I had 2 for 1 Tuesday’s, Sunday Playoff specials..., etc? Any info would be greatly appreciated. Thanks in advance.
I’m currently located in Taipei, Tawan, and seriously considering to own a Subway here for my retirement. Called their franchise office the other day; a woman on the phone told me I’ll need NTD 2,500k to 4,000k plus ntd 400k franchise fee ( about USD 98,305 to 159,153 altogether based on a Forex rate of 1:29.5) to own a new one. Then she set me up with a guy who is going to “interview” me in a few days.
My first question - with my experiences interacting with local residents since arriving in this country, I learned they tend to quote me a much higher price after knowing my western background, than they would quote to a local person on the exact same services / products. When calling Subway, I was thinking calling to an American company (Subway Taiwan) so let my guards down. After the call, it suddenly dawned on me Subway Taiwan could be very different from Subway USA, or Canada. So I’m just wondering if anyone here can tell me if the numbers they gave me was true and not inflated? I know Taiwan is probably considered a far off location and perhaps few people would know, but I thought I’d take a chance.
Second question is - I’ll turn 50 very soon. At my age, it’s hard to get any jobs here. That’s why I’m considering Subway. I was a hospitality management major for one year only and worked through my college p/t at a Subway. But that was 20+ years ago (I worked mostly as a day-to-day sub teacher for public schools in the states so that's not HM). I have some saving that can cover about 80% of the low number they quoted me to own a Subway here. I still have some funds in my IRA but I'll have to pay penalty if withdrawing now. So I try to avoid that. Physically, I’m still vibrant since I exercise regularly and religiously in the last 15 years, and I don’t mind hard work at all. What I’m concern is this is all the savings I have and if for any reason I should fail in this Subway endeavor, I’ll end up with nothing for my nest eggs, except my IRA and teacher's retirement pension, neither of which is significant enough for retirement because my income wasn't high when teaching. But if I can make the Subway thing work, then at least I’ll be making some money every month. But I feel extremely nervous about this. I’m just wondering if there’s any statistics on the succeeding / failing ratios on a new Subway franchise available?
Third question – Is the person who is going to “interview” me the “DA” you folks were referring to? What kind of “tests” I’ll have to take in this interview to determine if I’m a qualified Subway franchisee?
I’m quite familiar with the culture here but not totally. If you’re familiar with the local Subway operations here in Taiwan, I’d greatly appreciate if you could offer me some insight. Thank you.
Subway Taipei told me the minimum investment to own a Subway in Taipei, about USD 98k+, would be a Subway in a food court. It's cheaper because it's smaller. Does anyone have experiences running Subway franchises in a food court setting? Are there any pointers we should learn particularly on this? All inputs are highly appreciated.
This question is mainly for mrfranchiseman
Lets look at this in another light:
Let's say you had $500,000 cash (or even $1M)
And you wanted to open a few subways, moving into an more hands-off position where eventually you have 10+.
What would be a rough plan?
How many subways could/would you open with this cash?
How much profit would you expect to see in the first year or two?
I threw together a bunch of numbers from this thread, but doesnt seem right (too high return).
$150K of your own money as startup costs
Sales = $350K
Profit (after taxes) 15% = $52K
In this example, you are making 30% ROI (return on your investment).
Repeat with 5 more stores, hiring experienced, competent managers.
30% on $1M is $300K per year, which is very well to do for most of us. You could of course continue to open a new store every year, and/or get some loans and really scale. I heard of guys who own dozens of subways, and they are all paid off (building).
New to this board but doing research on Subways.
Just want to add something to the whole $5 foot long thing, read an article that some owners were pissed off at the company for doing that policy into place since their profit margin was narrower.
However, if you have gone to any subways recently, you will see that only SOME subs are $5. And usually those are the cheaper ones to make. Also, don't think that someone is just going to spend $5 when they go into a subways, they will buy a drink and chips or another side and that can add up too.
Also read an article on how walmart is favoring subways now instead of a McDonald in their stores, the reason being that walmart is trying to improve their image as being more healthy and an internal memo leaked a few years ago about trying to get Walmart employees' more healthy since their healthcare is covered under walmart.
Here is the article: http://articles.moneycentral.msn.com/Investing/Extra/WalMartMakeoverFavorsSubwayOverMcDonalds.aspx
advantage of opening in walmart is not having to maintain ur own restrooms, and having a steady stream of potential customers walking around your subways and seeing your subways. Also you don't have to pay for security.
I am looking to open a subways, hopefully in a couple years when I am finished with college. Has anyone looked into if an absentee owner can own a subways? Like what is the minuim number of hours a week the owner has to be at the store once it is established?
Me and 3 of my friends are interested in being partners and opening a Subway in New York City. We decided to be partners because we don't have enough Net worth by ourselves. We will also work in the Subway and maybe won't need any employees. Maybe 1 depending on our schedules. By reading this thread I see that a subway makes about $7,000-$10,000 a month of profit. That would give us $1,750 to $2,000 a month each which is not great. I would see us making better money if we open more Subways later on. Since is 4 of us we would take shifts to work in the subway maybe 2 of us for 7 hours and the other 2 for the other 7 hours. I was also considering keeeping one of my part-time jobs while working in the Subway. Do you think this is a good idea of 4 people opening a subway together? And what other advice would you give us.
I worked at Subway as an assist mgr for 5 years. It seems to me that many asking questions on this board want to make a lot of money and do no work. Subways don't work like that. I know quite a few restaurant owners and when you own a restaurant your leg is basically chained to an anchor. Abstantee ownership with a restaurant doesn't work. Count on living at your Subway.
The franchisee I worked for was in rural VA. He had 4 stores... 3 in small towns of around 3,500 people and one on the side of the interstate. The gross sales in the towns was $200-$300/day. Well, he lost his shirt. The indies that opened after him also closed wtihin 12 months. The location on the side of the interstate was very profitable and is still open.
It is hard work. You have to put up with the public. And they all want something for free. When the franchisee wasn't there the employees (usually 16-ish year olds) would steal the food and money.
I've since moved to Atlanta, GA and got to know a franchisee in a strip mall. He says he's not making much money but it pays his rent and car and he's got food in the ice box. He said he's around the $3,500 net profit monthly (working 60 hrs per week)
Looking at opening a subshop. Near a highschool. With fair amount of traffic. What would the costs be for food, rent(what would you recommend for square footage) utilities, insurance etc. A footlong would sell for $5 and 6" for 3.50. How many subs would sell on average. Open from 10:00 til 10:00 Mon-Sat. Any other info would be greatly appreciated.
I`ve enjoyed reading all of the comments on this post, even though there is a lot of inaccurate information. My wife`s brother and Mom own six Subways between the two of them, and neither if them have "lost their shirts". They both started with virtually nothing and now have comfortable lives with what they do because of the fact that Subway franchises are relatively inexpensive to start. The worst store they have nets around 35000 after mortgages, fees, etc. and their highest producer nets 100,000+ .
What people need to realize is that any business venture is going to be a risk, but the risk is significantly reduced if you are halfway smart about it. The reason people use franchises in the first place is because most franchises are proven formulas for success. But for example, you cant just go stick a mcdonalds out in the middle of nowhere and expect it to produce, you need to research vigorously the location, accesability, parking, surrounding businesses, surrounding housing, neiborhoods, etc.
I would never say that one could become rich, or even well off by owning one subway franchise. But owning three, four or even five strategically established subways can merit a pretty comfortable life.
I don`t know anything about quiznos, but if a subway franchise is failing, most people could look at that subway and see why it is failing (poor location, not very accessable from the road, hard to see from the road, etc.) So you can`t just say "my brother in law ownes a quiznos and failed, therefore most people who own sandwich shops fail". If that were the case, there would be very few subways, quiznos`, etc. (but we all know that isn`t the case).
Thats my 2 cents
I am looking at purchasing a subway. The owner states the profit margin is 25% and it is absentee owned. I thought by working there myself I could get it up to 35%. This is based on $400k/year. Does it seem like the owner is not telling the truth? I am in the prelimenary stages and have not made any offers or seen any books yet. I have never owned a Subway but I have owned my own painting business in the past. Any advice on what to ask the owner when I meet with him? Any help/advice would be greatly appreciated. Please let me know if you have any questions.
I own a franchised pizza restaruant and I would suggest that since quizno`s is a large corporation, there are many quiznos` opening practically next to each other. There may be many quiznos` they can go to. I would like the same help if possible. The main question is what is the customer expecting Good Food, and service that is descent. I have been to restaruants where the food is good but the staff was okay do I go back of course.. why the food. Please make sure the quality is there.
In food there are 2 major issues food/paper costs and labor. Myself also being new to the restarant industry, am learnging these items as I go. Always only order what you need. Once that occurs, I can only say is that team up with other quizno`s around or businesiness in the plaza and try something.