How to Start a Jersey Mike’s Franchise 2022 (Costs & Fees)
You might have been wondering, how much it cost to start a Jersey Mikes Franchise, due to the success recorded by this company, it’s absolutely natural to be part of the company
It all began with a customer’s demand for a Jersey Mike’s Sub shop to be located nearby. With nearly 500 sites, Jersey Mike’s can now provide sandwiches to most of the US.
The Cost of Starting Jersey Mike’s Franchise
To create a store, you’ll require an initial investment of between $178,523 and $746,342. Additionally, the business needs $100,000 in cash capital and $300,000 in net worth to be eligible.
Check out the detailed guide we’ve provided below to learn more about this business opportunity. In order for you to know what to anticipate, we have examined both the benefits and drawbacks of this franchise.
Financial Requirements and Fees
You need a $300,000 net worth, $100,000 in liquid money, and the ability to pay the $18,500 franchise fee in order to start a franchise.
For your convenience, we’ve broken it down. If you’ve done any research on other retailers, you’ll know that they occasionally offer cost-saving initiatives; Jersey Mike’s Sub does not. Fortunately, their franchise price is less expensive than those of similar franchises.
|
Fees/ Expenses |
Dollar Amount |
|---|---|
|
Liquid Capital |
$100,000 |
|
Net Worth |
$300,000 |
|
Initial Franchise Fee |
$18,500 |
|
Initial Total Investment |
$178,523 to $746,342 |
As you have already noticed, there is a wide range in the first total investment. How come?
Depending on where you intend to open, costs including lease fees, architectural regulations, permits, insurance, and equipment can vary greatly.
|
Fees/ Expenses |
Dollar Amount |
|
Additional funds for 3 months |
~ $15,000 |
|
Architectural fees |
~ $1,100 to $17,892 |
|
Business licenses and permits |
~ $25 to $500 |
|
Equipment, furniture, and small wares |
~ $9,250 to $126,709 |
|
Grand Opening Advertising |
~ $12,500 |
|
Initial Inventory |
~ $2,000 to $26,925 |
|
Insurance |
~ $2,000 to $12,000 |
|
Interior branding and graphics |
~ $2,087 to $31,698 |
|
Leasehold Improvements |
~ $92,529 to $339,567 |
|
POS System |
~ $4,079 to $14,184 |
|
Professional fees |
~ $500 to $15,623 |
|
Real estate and construction fee |
~ $5,000 |
|
Rent/lease CAM and utility security deposits |
~ $0 to $42,009 |
|
Signage |
~ $2,210 to $30,089 |
|
Training |
~ $1,200 to $49,974 |
|
Uniforms, office equipment, and supplies |
~ $1,021 to $45,875 |
|
Franchise Fee |
$18,500 |
|
Initial Total Investment Estimate |
$178,523 to $746,342 |
Why the Analysis is Important
This analysis should help explain why the launch costs for this sandwich restaurant can vary so much. Find a built-to-suit location to open a Jersey Mike’s if you want to save money.
You should factor in the $12,500 fee to assist with marketing and promotion of your store’s opening as part of the beginning costs.
This money is specifically used to advertise your store locally.
If you wish to purchase a franchise, there are additional expenses to consider in addition to the original investment.
Even though these figures may not accurately represent the upfront costs, any potential franchise owners should take into consideration them.
Every franchise will have a royalty cost, and for the majority of them, there will also be a marketing/advertising fee.
A royalty fee is a recurring payment you would provide to the franchise in exchange for the right to operate the company idea. The royalty rate for Jersey Mike’s is 6.5%.
Additional Fees
Additionally, there is a 4% national media fee and a 1% corporate advertising fee depending on gross receipts.
This implies that the corporate entity takes 5% of the price of each sandwich sold purely for marketing purposes.
To fund their marketing initiatives, businesses charge an advertising fee for things like television commercials, radio ads, direct mail, and online advertising.
You should also be aware of tiny, supplementary costs like those for technological services, audits, and training.
Average Sales/Revenue Per Year
After discussing the necessary funds, fees, and recurring costs, let’s get to the exciting part: the stores’ sales and revenue.
Systemwide Annual Sales/ Revenue
Jersey Mike Subs make an estimated $1.34 billion in annual sales as a whole.
The franchise’s sales volume has been rising over the years, and a few years ago it was named the fastest-growing sandwich chain in the United States. Jersey Mike’s increase was 16% between 2010 and 2017.
Both new investors and seasoned franchise owners have found this concept to be enticing.
Particularly considering that it is a modest business with space for growth and less than 1,000 shop locations.
Average Annual Sales Per Unit
There are approximately $600,000 in annual average sales per unit.
Jersey Mike’s is experiencing significant growth, and they are doing it by remaining competitive and giving new franchise owners excellent training.
Average Franchisee Profit
A Jersey Mike’s franchisee often makes $50,000 to $200,000 in profit annually.
Without taking into account the numerous factors that can skew the average, it is difficult to determine the average profit of franchisees.
This figure is not the most accurate indicator of achievement if you want to compare the profitability of a Jersey Mike’s sub to that of other restaurants.
Numerous factors could contribute to one retail location making more money than another. One possibility is the location because cities often have higher gross revenues due to increased visitation, but higher lease costs as well.
Compare the profit you’re after to those of nearby businesses with similar industries.
Jersey Mike’s Franchise Facts
Here are some important details you might find when doing your own study on the company before we move on to the typical profit a franchise owner would make.
1. Since its inception in 1956, Jersey Mike has distinguished itself by offering the “submarine sandwich.”
2. In 1987, they commenced franchising.
3. Over 1,500 units are present.
4. Type of Industry: QSR, or quick-service restaurant
5. Their main office is in Manasquan, New Jersey.
6. At age 17, CEO Peter Cancro purchased the chain.
Profit of Jersey Mike’s Franchisee
An average franchise owner can anticipate making $73,000 a year. When compared to rival chains that may earn you six figures a year, these numbers appear to be smaller, but that is not the whole picture.
According to reports, 70% of Jersey Mike’s franchise owners were also franchise owners. If you want to make a high six-figure wage, you should branch out to other Jersey Mike’s restaurants.
Procedure for Becoming a Franchise Owner
With Jersey Mike’s, there is a step-by-step procedure to become a franchise owner.
You would need to first submit an online application and participate in a preliminary phone interview. You can choose your area of interest if it is clear that you match the minimum requirements.
The franchise disclosure forms will then be reviewed, and an initial interview will be conducted. Finishing all of these should take anything from one day to one week.
Conducting due diligence might take anywhere between one and six months, depending on the candidate.
A meeting with business executives is required for the final few phases. Your in-store training will first take around a week to complete.
Other Procedures
After that, you’ll have one to three weeks to schedule a meeting with a member of the executive team.
Finally, you get to sign the franchise agreement and proceed with the most challenging step—acquiring real estate.
A typical schedule ranges from three to six months, depending on the availability of real estate. The procedure could take longer in a market for commercial real estate that is competitive.
When the building is complete, the store will soon be ready to open! To allow for crew training and some grassroots promotion, you’ll need two weeks. You’re finally prepared to launch your next franchise.
Being your own boss is appealing, but you need to think carefully before selecting whether this franchise is best for you.
Advantages of Jersey Mike’s
The information on Jersey Mike’s website is fairly extensive, as is the application procedure. The company’s visibility is something to commend because its website has the most pertinent information.
They go into considerable length about their expectations and motto. For instance, Jersey Mike’s places a lot of emphasis on the training of their prospective owners and managers.
This means that Jersey Mike’s will give you and your staff the necessary training, even if you are a novice and have little experience starting and managing a business.
Comparatively speaking, Jersey Mikes’s is a tiny quick-service restaurant chain, but it is a rapidly expanding one with a talented staff.
They haven’t yet become a household name like McDonald’s, but their lesser fame can also have benefits.
Other Advantages
Additionally, they are among the sandwich restaurants with the fastest expansion rates. This franchise is one of the factors contributing to the recent collapse of rivals like Subway location.
Their training program is the final perk we want to discuss. They are concerned about the experience of their employees and want to give the consumer their best work. They are still growing, after all.
Their training program should adequately prepare you for your first day on the job.
If you’ve ever visited a Jersey Mike’s sandwich restaurant, you can tell that the crew has received superior customer service training than at other establishments.
Challenges of Jersey Mike’s
As with all other franchises, a particular store may present you with unique difficulties. The franchise’s fame is the first factor.
Although being a smaller franchise can be viewed favorably, it might be challenging to attract new clients in their neighborhood who are unaware of it.
It’s challenging to get customers to try new things, therefore an audacious and powerful marketing plan is needed.
Additionally, you might need to spend more on promotion than you would if you were to launch a McDonald’s or another well-known franchise.
Other Challenges
They have fewer resources, such as financing programs or exclusive privileges, because they are smaller corporations.
The plus side is that they have a wide range of franchise owners and a reasonably low franchise price. However, they continue to fall short in the area of accessibility and incentives.
Before joining the team, you should know another risk. The company will be paid $75 per hour plus expenses to run the store on your behalf if you fall into default (are unable to make your Jersey Mike’s debt payments).
Additionally, there are late costs for paying royalties past due, and if corporate decides to review your records, you may even be required to cover the cost of an audit
Is the Jersey Mike’s Franchise Right For You
If you want to start this franchise, you should have some of the following qualities.
1. You must have a sense of community. Jersey Mike’s invests time in creating a welcoming environment since CEO Peter Cancro realized the value of it as the restaurant was growing.
2. Compared to most other franchise systems, Jersey Mike’s training takes three times as long. You must be eager to learn and passionate.
They think that owners, management, and employees who have received proper training run businesses more successfully.
3. Be committed to providing excellent customer service, and be ready to work quickly.
Conclusion
This franchise may be a good fit for you if you can meet the standards, have a passion for the sandwich-related food industry and enjoy learning new things every day.
All you need to do is have the funds ready and get set to embark on a journey with Jersey Mike.
