January 26, 2023 | Last Updated on: January 27, 2023
Creating a new company is a venture that is both exhilarating and difficult to undertake. Starting a franchise business is consistently ranked among the top choices available to would-be company owners who wish to launch their own companies.
Franchise possibilities are available via Firehouse Subs, which is one of the most rapidly expanding quick-service sandwich restaurants in the United States. Potential franchisees may find Firehouse Subs to be an incredibly appealing opportunity for them based on the nature of opening their own storefront.
Firehouse Subs has won a series of awards in recent years, including Entrepreneurs’ “Top Food Franchise Award” in 2020. It has also been noted as being one of America’s best customer service companies by Newsweek.
This article will give in-depth information on the franchising opportunities that are available with Firehouse Subs – a fast-casual restaurant – including what is required to get started, the fees that are involved, the training that is provided, and more. We’ll cover all the ins and outs that are associated with being a Firehouse Subs franchise owner.
You should have all the answers you need by the time you reach the conclusion of this article to determine whether or not a Firehouse Subs franchise is the correct choice for you and, if it is, how to get started in the best possible way. So, let’s dig in!
Firehouse Subs is a well-known chain of quick-service restaurants that was established in the United States in 1994 by brothers Robin and Chris Sorensen, who had previously worked as firefighters. Their first location was opened in Jacksonville, Florida, and they haven’t looked back since. They began franchising the business successfully just a few years later in 2000, and they have been going strong ever since.
The Firehouse Subs menu draws its influence from a wide array of sources, and some of the most popular entrees are the Hook and Ladder Sub, Barbecue Cuban Sub, and Italian Sub. They are growing at a quick pace and have the potential to deliver their franchisees substantial earnings. Plus, the fact that they are growing means franchisees have the opportunity to grow with them and open a series of locations.
Currently, Firehouse Subs operates out of more than 1,135 sites, and they are currently located in 46 states as well as Puerto Rico and Canada.
There are several advantages to owning a Firehouse Subs franchise:
You’ll need a minimum of $80,000 to $100,000 in cash assets and a net worth of $300,000 in order to operate a Firehouse Subs franchise. This is because the first investment is between $80,000 and $100,000.
In addition to that, you will be required to pay a Firehouse Subs franchise cost of $20,000. The initial financial commitment required to launch a Firehouse Subs franchise may vary anywhere from $189,574 to $997,320 on average.
Liquid Cash Requirements: from $80,000 – $100,000+
Investing initially anywhere from $189,574 to $997,320
The initial fee for the franchise is $20,000
The franchise fee for Firehouse Subs is a monthly payment equal to 6% of the company’s total revenue. This charge contributes toward covering the expenses of the myriad of services and supports that Firehouse Subs offers to its franchisees. The next month, you will be charged an extra 4% of the total for marketing and public relations.
Ongoing Royalty Fee: 6%
The ad royalty fee is 4%.
If you are interested in opening a Firehouse Subs franchise, the following is a list of the steps you need to take:
If you are interested in opening a Firehouse Subs franchise, you need to have between $80,000 and $100,000 in readily available capital.
Franchisees of Firehouse Subs are required to have prior experience working in the business world. It makes sense! The estimated initial investment is substantial, and there is a lot of legwork involved in getting a successful franchise off the ground.
Franchises of Firehouse Subs are available to purchase in a variety of different areas all around the globe. Before moving forward with the franchise application, it is strongly recommended that you first investigate the market availability in the place that is of particular interest to you and decide whether or not there are any possibilities currently accessible.
All you need to do is submit your application here. After the Firehouse Subs franchise team has finished looking it over, they will get in touch with you to discuss the next steps. Read out the Franchise Disclosure Document (FDD) carefully to avoid any problems in the future.
For you to be eligible to create your own Firehouse Subs franchise, you need to fulfill the following requirements:
The yearly annual sales that can be generated from owning a Firehouse Subs franchise range anywhere from $634,892 to $834,892 on average. This is similar to most traditional restaurants. Individual franchise owners tend to make between $75,000 and $125,000 a year based on these numbers. Further, end-of-year profit margins tend to be between 6% and 9% of total sales (remember, your salary as a business owner is considered an expense and thus not part of the final profit of your business if your business is set up as a corporation).
The amount of profit that a Firehouse Subs franchise owner is able to produce is contingent not only on the location and size of the restaurant but also on the owner’s management skills and dedication to the business’s success.
The typical owner of a Firehouse Subs franchise brings in something in the neighborhood of $110,233 in yearly revenue. However, as noted, this figure is subject to change based on the size of the franchise as well as its location. How you run your business, the number of customers you bring in, etc., will all impact the final amount of money you, as the business owner, make at the end of the day.
Consider the following scenario: after doing the math, we determine that the initial investment ranges from $189,574 to $997,320 and that the average yearly profits of the franchise owner are $110,233.
In such a scenario, the original investment will be recovered anywhere between 1.7 and 9.0 years after it was made.
We do not, however, take into account the resale value of the whole Firehouse Subs franchise company, which drastically shortens the amount of time it takes for the investment to pay off. You need to do the necessary calculations to determine for yourself whether or not it is worthwhile.
Starting a funeral home can be a capital-intensive endeavor, so it’s important to assess your financing options. There are several options available to small businesses, including SBA loans, term loans, lines of credit, and equipment financing.
SBA loans, or Small Business Administration loans, are a type of loan that is backed by the federal government. These loans are designed to help small businesses, like Firehouse Subs franchises, access the capital they need to start or grow their business.
The SBA offers several different loan programs, but the most popular is the SBA 7(a) loan program, which offers loans of up to $5 million. These loans come with both fixed and variable interest rates and have reasonable terms and extended repayment periods.
The SBA 7(a) loan program is a great option for Firehouse Subs franchise owners looking to start or expand their businesses. The loan can be used for a variety of purposes, such as purchasing equipment, real estate, inventory, or working capital.
In addition, the SBA offers a franchise loan program specifically for franchisees, which can help provide funding for the initial franchise fee and other start-up costs.
One of the benefits of SBA loans is that they have more favorable terms and interest rates compared to traditional bank loans. This is because the SBA guarantees a portion of the loan, which reduces the risk for the lender and allows them to offer more favorable terms.
Additionally, the SBA has a number of resources available to help small businesses, like Firehouse Subs franchises, navigate the loan application process and understand the requirements.
While SBA loans do have some restrictions on eligibility and a lengthy application process, they are a great option for small business owners looking for funding to start or expand their businesses.
For the Firehouse Subs franchise, the SBA 7(a) loan program and the franchise loan program can be great options to access the liquid capital they need to start or expand their business.
Term loans are a type of loan that provide businesses with a large lump sum of cash. The loan is then repaid over a set period of time, usually at a fixed interest rate. Term loans can be obtained from traditional brick-and-mortar banks or alternative lenders.
Term loans from traditional banks are typically more difficult to obtain due to the qualifications required and the lengthy application process.
Banks typically require a good credit score, a solid business plan, and financial statements, among other things, to approve a term loan. However, traditional banks offer some of the lowest interest rates available on term loans.
On the other hand, term loans from alternative lenders are often easier to obtain and have a faster application process. These lenders typically have more relaxed qualifications and can provide funding in as little as 24 hours or a few days.
However, because alternative lenders have more relaxed qualifications, they often charge higher interest rates than traditional banks.
Term loans are a good option for businesses that need a large sum of money for a specific purpose, such as purchasing equipment, real estate, or inventory. They can also be useful for businesses that need to make a total short-term investment or expand their operations.
However, it’s important to note that they are typically not a good option for long-term financing, as the interest rates can be high, and the repayment period can be short.
Lines of credit are a type of loan that allows businesses to borrow money up to an agreed-upon limit whenever they need it. With a line of credit, businesses only pay interest on the amount they borrow and can borrow more money as they repay the funds they have borrowed.
For a Firehouse Subs franchise, a line of credit can be a valuable resource for shoring up cash flow and making short-term purchases. For example, a line of credit can help a franchise owner cover unexpected expenses, such as equipment repairs or unexpected supply costs.
Additionally, because a line of credit does not go away when it is not being used, it is available for use whenever needed.
Lines of credit are typically offered by traditional banks and alternative lenders. They usually have variable interest rates, which means the interest rate can fluctuate based on market conditions. This can make it more difficult to budget for the future.
However, because a line of credit is revolving, meaning it can be borrowed against again and again as it is paid off, it can be a flexible option for a business.
A line of credit can be a great option for a Firehouse Subs franchise because it provides a source of funding that can be used as needed to cover short-term expenses and to help maintain cash flow.
However, it’s important to keep in mind that lines of credit typically have variable interest rates, so it may be more difficult to budget for the future.
Equipment financing is a loan option that can be used to purchase business-related equipment, such as kitchen appliances, point-of-sale systems, and other tools required to run a Firehouse Subs franchise.
These loans are specifically designed to help businesses acquire the equipment they need to operate and grow without having to pay for it all upfront.
One of the benefits of equipment financing is that it typically does not require collateral, as the equipment being purchased serves as the collateral. This means that the business owner does not need to put up personal assets as collateral.
Additionally, equipment financing often has lower interest rates than other types of loans because the lender has the equipment as collateral and can repossess it if the borrower defaults on the loan.
There are several types of equipment financing available, including:
Lease financing: This allows a business to lease the equipment for a set period of time and pay a set amount each month. At the end of the lease period, the business can choose to purchase the equipment, return it, or renew the lease.
Capital lease: It’s similar to a loan, where a business rents the equipment for a set period of time and makes payments towards the purchase price. At the end of the lease period, the business owns the equipment.
Operating lease: It’s similar to a rental, where a business pays to use the equipment for a set period of time and returns it at the end of the lease period.
For a Firehouse Subs franchise, equipment financing can be a great option to acquire the necessary tools and equipment to run the business. It can provide the necessary funds to purchase equipment without having to pay for it all upfront.
It’s important to consider the terms and interest rates of different equipment financing options and choose the one that best suits the needs of the business.
The in-depth training program offered by the franchise is what will ultimately determine how successful the business will be.
Each franchise owner is required to undergo a two-week training session at the Firehouse Subs headquarters in Jacksonville, Florida, before they are allowed to open their doors to customers.
During the course of this comprehensive instruction, participants will be instructed on everything from how to craft the ideal sub to how to organize their money.
In addition to this, students will get the chance to see successful business owners who manage franchises and gain first-hand knowledge of what it takes to operate a profitable company.
At the conclusion of the additional training program, franchisees will be equipped with the knowledge and self-assurance required to launch a Firehouse Subs shop in their neighborhood and provide delectable subs to the members of that community.
Ten years is the actual duration of the period of the franchise agreement. If the franchisor is in good standing, producing money, and complying with renewal terms, the term will be extended for an additional five years. However, the term may expire after ten years if the franchisor is unable to perform successfully.
In conclusion, Firehouse Subs is a well-known restaurant chain that offers franchise opportunities to those who want to start their own business. The franchise fee is $20,000, and the initial financial commitment ranges from $189,574 to $997,320 on average.
Additionally, franchisees are required to have a minimum of $80,000 to $100,000 in cash assets and a net worth of $300,000. The ongoing royalty fee is 6% of total revenue, and the advertising fee is 4%.
To get started with a Firehouse Subs franchise, you need to have sufficient capital, prior experience, assess market availability, and submit your application.
Firehouse Subs also has certain requirements, such as practical experience in business management, financial stability, and the ability to meet the financial obligations of the franchise.
It’s important to carefully evaluate if a Firehouse Subs franchise is the right choice for you and your financial situation before taking the next steps.
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