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Whats the average income of a subway restaurant owner?
tr1ckownz
subscriber Posts: 2
I am curious to know what is the average profit a subway restaurant owner would make monthly? Or if you know anyone who owns a subway, how much do they make monthly? Or if you know anyone who owns a subway, how much do they make monthly? Remeber I am not asking for the exact price.. so please don`t say depends on location. I just want a rough estimate.
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here`s what he said:
average cost to open a store is $150k - $180k depending on the geography and the ROI is 3-5 yrs, but having one store is like buying yourself a job...you need 4+ good stores to have a nice income and spread the people and risk around.
Subway has "regional managers" whose sole mission in life is to open new stores, in fact they get penalized on their checks for failing to open X # of stores every year. There seemed to be no loyalty base whatsoever in keeping or protecting any kind of territory.
I remember reading that as a franchise owner, you are required to buy all your supplies and food products through the parent company at their inflated prices.
Chris
You don`t own one because they are not a franchise operation. Well, technically there are franchisees in places where Starbucks is unable to lease space, like inside a grocery store; but all the stores on all the corners you`re talking about are owned and operated by Starbucks.
The average store in the US does a little shy of $8,000/week. So for easy round numbers lets say the average store does $400k/year. It is relatively easy to pull 20% profit if you keep an eye on the business. I averaged 22.63% for the first quarter this year and I was in my stores an average of 10 hours or less per week so 20% is not that hard. But for the following estimate, lets use 20% average profit.
If you have a store that is merely average you should profit in the ballpark of $80k/yr.
Now lets say you were lucky enough to get a great location and you store does $15k/week (the area I am in has several stores that do this and much more in sales so it is very possible), well you should be making in excess of $150k per year.
Now, one or two stores are not going to make you a multi-millionaire, but you can make a comfortable living without much of a time investment.
Now lets switch gears. I`m not sure what article in Entrepeneur Magazine said Subway was rated one of the worst franchises? I would love to see a link to this article? Entrepeneur Magazine rated Subway the #1 franchise in their Franchise 500 for 2006. This was the 14th year Subway was rated #1.
Yes, Subway franchisees must purchase the food from one distributor, not from "the parent company". These prices are not "inflated". Infact, it`s just the opposite. IPC (Independent Purchasing Cooperative) was formed to negotiate prices and ensures all foods/supplies meet "Gold Standard" qualities. Some food distributors don`t want Subway`s business because the pricing leaves so little room for distributor profits. With over 26,000 stores we have tremendous buying power.
If you purchase a subway you do not have the rights to a certain territory. Subway does not have "regional managers", but does have "development agents" a.k.a. "DA". Development agents` "sole mission in life" is not just to open new stores. Yes, as their company given titles suggest they do focus on developing their given markets/territories. There have been some unhappy franchisees when stores were opened close to their existing store and sales were negatively impacted. However, this is not the norm. It depends on the DA. Most DAs are very conscious of their existing franchisees. DAs have contracts with Subway`s parent company, Doctor`s Associates Incorporated. Per their contracts, they must maintain a certain level of sales average in the market. Therefore, they can`t just go putting Subways on every corner to meet the development numbers they need. They have to be smart in their development.
If you are considering Subway, talk to existing franchisees in the area and ask about their satisfaction with the DA of that area. Development Agents are also expected to ensure franchisees are operating within company guidelines by having field reps that inspect stores monthly. They do much more than just open stores.
Again, I`m not writing this to offend anyone who posted above. I just want to make sure that anyone considering Subway has accurate information. I hope this helps.
I own three Subway restaurants...
what an AWESOME post.
thanks so much, subwayowner! popped you a "5" rating right away!
rich
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.
You mentioned 10 hours per week in your stores. Was that 10 hours per store or 10 hours total. I had read that Subway requires all owners to be operators. I was just wondering what the minimum time is per location. My brother-in-law knows a guy who just bought a franchise from a guy that owns 5. This location earns about 15K a month profit. When asked why he was selling this location he said it was the most removed location of the 5. We were speculating that he might not have been able to meet the minimum time required to be at each location to satisify this Franchise agreement. Would this be an accurate assumption?
Thanks for you`re knowledgable insight.