Creating a new firm is a enterprise that’s each exhilarating and tough to undertake. Starting a franchise enterprise is constantly ranked among the many high selections obtainable to would-be firm house owners who want to launch their very own firms.
Franchise prospects can be found by way of Firehouse Subs, which is among the most quickly increasing quick-service sandwich eating places within the United States. Potential franchisees could discover Firehouse Subs to be an extremely interesting alternative for them primarily based on the character of opening their very own storefront.
Firehouse Subs has won a series of awards in recent times, together with Entrepreneurs’ “Top Food Franchise Award” in 2020. It has additionally been famous as being certainly one of America’s finest customer support firms by Newsweek.
This article will give in-depth info on the franchising alternatives which might be obtainable with Firehouse Subs – a fast-casual restaurant – together with what’s required to get began, the charges which might be concerned, the coaching that’s offered, and extra. We’ll cowl all of the ins and outs which might be related to being a Firehouse Subs franchise proprietor.
You ought to have all of the solutions you want by the point you attain the conclusion of this text to decide whether or not or not a Firehouse Subs franchise is the proper alternative for you and, whether it is, how to get began in the very best manner. So, let’s dig in!
Firehouse Subs
Firehouse Subs is a well-known chain of quick-service eating places that was established within the United States in 1994 by brothers Robin and Chris Sorensen, who had beforehand labored as firefighters. Their first location was opened in Jacksonville, Florida, they usually haven’t seemed again since. They started franchising the enterprise efficiently simply a few years later in 2000, they usually have been going robust ever since.
The Firehouse Subs menu attracts its affect from a big range of sources, and a few of the hottest entrees are the Hook and Ladder Sub, Barbecue Cuban Sub, and Italian Sub. They are rising at a fast tempo and have the potential to ship their franchisees substantial earnings. Plus, the truth that they’re rising means franchisees have the chance to develop with them and open a collection of places.
Currently, Firehouse Subs operates out of greater than 1,135 websites, and they’re presently positioned in 46 states in addition to Puerto Rico and Canada.
Advantages of Firehouse Subs Franchise
There are a number of benefits to proudly owning a Firehouse Subs franchise:
- Established model: Firehouse Subs is a well-known and revered model within the quick-service restaurant business, which might help appeal to clients and enhance the probabilities of success for franchisees.
- A confirmed enterprise mannequin: Firehouse Subs has a confirmed enterprise mannequin that has been profitable in a number of places. This can present franchisees with a degree of confidence that the enterprise will probably be worthwhile.
- Support and coaching: Firehouse Subs gives its franchisees with in depth coaching and ongoing help to assist them run their enterprise successfully. This can embrace help with web site choice, advertising and marketing, and operations.
- Marketing and promoting: Firehouse Subs conducts a nationwide advertising and marketing and promoting marketing campaign that may assist drive clients to franchisees’ places.
- Purchasing energy: Firehouse Subs has a massive buying energy, which permits them to negotiate higher costs on provides and components, which might help franchisees get monetary savings on their working prices.
The Cost of Owning a Firehouse Subs Franchise
You’ll want 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 as a result of the primary funding is between $80,000 and $100,000.
In addition to that, you may be required to pay a Firehouse Subs franchise price of $20,000. The preliminary monetary dedication required to launch a Firehouse Subs franchise could differ wherever from $189,574 to $997,320 on common.
Liquid Cash Requirements: from $80,000 – $100,000+
Investing initially wherever from $189,574 to $997,320
The preliminary price for the franchise is $20,000
The franchise price for Firehouse Subs is a month-to-month fee equal to 6% of the corporate’s complete income. This cost contributes towards protecting the bills of the myriad of providers and helps that Firehouse Subs affords to its franchisees. The subsequent month, you may be charged an extra 4% of the total for marketing and public relations.
Ongoing Royalty Fee: 6%
The advert royalty price is 4%.
How Do I Get Started with a Franchise of Firehouse Subs?
If you have an interest in opening a Firehouse Subs franchise, the next is a listing of the steps you want to take:
Make certain you’ve got adequate capital
If you have an interest in opening a Firehouse Subs franchise, you want to have between $80,000 and $100,000 in available capital.
Check that you’ve adequate prior expertise
Franchisees of Firehouse Subs are required to have prior expertise working within the enterprise world. It is smart! The estimated preliminary funding is substantial, and there’s a lot of legwork concerned in getting a profitable franchise off the bottom.
Assess Market Availability
Franchises of Firehouse Subs can be found to buy in a number of totally different areas throughout the globe. Before shifting ahead with the franchise utility, it’s strongly really useful that you just first examine the market availability within the place that’s of explicit curiosity to you and resolve whether or not or not there are any prospects presently accessible.
Send in your utility
All you want to do is submit your utility right here. After the Firehouse Subs franchise staff has completed trying it over, they are going to get in contact with you to talk about the subsequent steps. Read out the Franchise Disclosure Document (FDD) rigorously to keep away from any issues sooner or later.
Firehouse Subs Franchise Requirements
For you to be eligible to create your individual Firehouse Subs franchise, you want to fulfill the next necessities:
- Practical Experience in Business
- Prepare a enterprise technique
- A historical past of fine credit score
- And, after all, someplace between $80,000 and $100,000 in available money.
What Kind of Profits Can You Expect to Take Home If You Own a Firehouse Subs Franchise?
The yearly annual gross sales that may be generated from proudly owning a Firehouse Subs franchise vary wherever from $634,892 to $834,892 on common. This is comparable to most conventional eating places. Individual franchise house owners have a tendency to make between $75,000 and $125,000 a 12 months primarily based on these numbers. Further, end-of-year revenue margins have a tendency to be between 6% and 9% of complete gross sales (bear in mind, your wage as a enterprise proprietor is taken into account an expense and thus not a part of the ultimate revenue of what you are promoting if what you are promoting is about up as a company).
The quantity of revenue that a Firehouse Subs franchise proprietor is ready to produce is contingent not solely on the situation and measurement of the restaurant but additionally on the proprietor’s administration expertise and dedication to the enterprise’s success.
Income Potential of Owning a Firehouse Subs Franchise
The typical proprietor of a Firehouse Subs franchise brings in one thing within the neighborhood of $110,233 in yearly income. However, as famous, this determine is topic to change primarily based on the scale of the franchise in addition to its location. How you run what you are promoting, the variety of clients you herald, and so forth., will all impression the ultimate sum of money you, because the enterprise proprietor, make on the finish of the day.
How Profitable Is It to Own a Franchise of Firehouse Subs?
Consider the next state of affairs: after doing the mathematics, we decide that the preliminary funding ranges from $189,574 to $997,320 and that the common yearly income of the franchise proprietor are $110,233.
In such a state of affairs, the unique funding will probably be recovered wherever between 1.7 and 9.0 years after it was made.
We don’t, nevertheless, take note of the resale worth of the entire Firehouse Subs franchise firm, which drastically shortens the period of time it takes for the funding to repay. You want to do the required calculations to decide for your self whether or not or not it’s worthwhile.
Financing Options
Starting a funeral house may be a capital-intensive endeavor, so it’s necessary to assess your financing choices. There are a number of choices obtainable to small companies, together with SBA loans, time period loans, strains of credit score, and gear financing.
SBA Loans
SBA loans, or Small Business Administration loans, are a sort of mortgage that’s backed by the federal authorities. These loans are designed to assist small companies, like Firehouse Subs franchises, entry the capital they want to begin or develop their enterprise.
The SBA affords a number of totally different mortgage applications, however the preferred is the SBA 7(a) mortgage program, which affords loans of up to $5 million. These loans include each fastened and variable rates of interest and have affordable phrases and prolonged reimbursement intervals.
The SBA 7(a) loan program is a nice possibility for Firehouse Subs franchise house owners trying to begin or increase their companies. The mortgage can be utilized for a number of functions, akin to buying gear, actual property, stock, or working capital.
In addition, the SBA affords a franchise mortgage program particularly for franchisees, which might help present funding for the preliminary franchise price and different start-up prices.
One of the advantages of SBA loans is that they’ve extra favorable phrases and rates of interest in contrast to conventional financial institution loans. This is as a result of the SBA ensures a portion of the mortgage, which reduces the danger for the lender and permits them to provide extra favorable phrases.
Additionally, the SBA has a variety of sources obtainable to assist small companies, like Firehouse Subs franchises, navigate the mortgage utility course of and perceive the necessities.
While SBA loans do have some restrictions on eligibility and a prolonged utility course of, they’re a nice possibility for small enterprise house owners searching for funding to begin or increase their companies.
For the Firehouse Subs franchise, the SBA 7(a) mortgage program and the franchise mortgage program may be nice choices to entry the liquid capital they want to begin or increase their enterprise.
Term Loans
Term loans are a sort of mortgage that present companies with a massive lump sum of money. The mortgage is then repaid over a set time frame, often at a fastened rate of interest. Term loans may be obtained from conventional brick-and-mortar banks or different lenders.
Term loans from conventional banks are usually harder to get hold of due to the {qualifications} required and the prolonged utility course of.
Banks usually require a good credit score rating, a stable marketing strategy, and monetary statements, amongst different issues, to approve a time period mortgage. However, conventional banks provide a few of the lowest rates of interest obtainable on time period loans.
On the opposite hand, time period loans from different lenders are sometimes simpler to get hold of and have a quicker utility course of. These lenders usually have extra relaxed {qualifications} and may present funding in as little as 24 hours or a few days.
However, as a result of different lenders have extra relaxed {qualifications}, they usually cost increased rates of interest than conventional banks.
Term loans are a good possibility for companies that want a massive sum of cash for a particular function, akin to buying gear, actual property, or stock. They may also be helpful for companies that want to make a complete short-term funding or increase their operations.
However, it’s necessary to observe that they’re usually not a good possibility for long-term financing, because the rates of interest may be excessive, and the reimbursement interval may be brief.
Lines of Credit
Lines of credit score are a sort of mortgage that enables companies to borrow cash up to an agreed-upon restrict each time they want it. With a line of credit score, companies solely pay curiosity on the quantity they borrow and may borrow more cash as they repay the funds they’ve borrowed.
For a Firehouse Subs franchise, a line of credit score may be a invaluable useful resource for shoring up money circulate and making short-term purchases. For instance, a line of credit score might help a franchise proprietor cowl sudden bills, akin to gear repairs or sudden provide prices.
Additionally, as a result of a line of credit score doesn’t go away when it isn’t getting used, it’s obtainable to be used each time wanted.
Lines of credit score are usually provided by conventional banks and different lenders. They often have variable rates of interest, which suggests the rate of interest can fluctuate primarily based on market circumstances. This could make it harder to finances for the long run.
However, as a result of a line of credit score is revolving, which means it may be borrowed in opposition to time and again as it’s paid off, it may be a versatile possibility for a enterprise.
A line of credit score may be a nice possibility for a Firehouse Subs franchise as a result of it gives a supply of funding that can be utilized as wanted to cowl short-term bills and to assist keep money circulate.
However, it’s necessary to take into account that strains of credit score usually have variable rates of interest, so it could be harder to finances for the long run.
Equipment Financing
Equipment financing is a mortgage possibility that can be utilized to buy business-related gear, akin to kitchen home equipment, point-of-sale techniques, and different instruments required to run a Firehouse Subs franchise.
These loans are particularly designed to assist companies purchase the gear they want to function and develop with out having to pay for all of it upfront.
One of the advantages of kit financing is that it usually doesn’t require collateral, because the gear being bought serves because the collateral. This implies that the enterprise proprietor doesn’t want to put up private property as collateral.
Additionally, gear financing usually has decrease rates of interest than different kinds of loans as a result of the lender has the gear as collateral and may repossess it if the borrower defaults on the mortgage.
There are a number of kinds of gear financing obtainable, together with:
Lease financing: This permits a enterprise to lease the gear for a set time frame and pay a set quantity every month. At the top of the lease interval, the enterprise can select to buy the gear, return it, or renew the lease.
Capital lease: It’s comparable to a mortgage, the place a enterprise rents the gear for a set time frame and makes funds in direction of the acquisition value. At the top of the lease interval, the enterprise owns the gear.
Operating lease: It’s comparable to a rental, the place a enterprise pays to use the gear for a set time frame and returns it on the finish of the lease interval.
For a Firehouse Subs franchise, gear financing may be a nice possibility to purchase the required instruments and gear to run the enterprise. It can present the required funds to buy gear with out having to pay for all of it upfront.
It’s necessary to take into account the phrases and rates of interest of various gear financing choices and select the one which most closely fits the wants of the enterprise.
Training
The in-depth coaching program provided by the franchise is what’s going to in the end decide how profitable the enterprise will probably be.
Each franchise proprietor is required to bear a two-week coaching session on the Firehouse Subs headquarters in Jacksonville, Florida, earlier than they’re allowed to open their doorways to clients.
During the course of this complete instruction, individuals will probably be instructed on every little thing from how to craft the best sub to how to manage their cash.
In addition to this, college students will get the possibility to see profitable enterprise house owners who handle franchises and acquire first-hand information of what it takes to function a worthwhile firm.
At the conclusion of the extra coaching program, franchisees will probably be geared up with the information and self-assurance required to launch a Firehouse Subs store of their neighborhood and supply delectable subs to the members of that group.
Term Of Agreement and Renewal
Ten years is the precise length of the interval of the franchise settlement. If the franchisor is in good standing, producing cash, and complying with renewal phrases, the time period will probably be prolonged for a further 5 years. However, the time period could expire after ten years if the franchisor is unable to carry out efficiently.
Overview
In conclusion, Firehouse Subs is a well-known restaurant chain that provides franchise alternatives to those that need to begin their very own enterprise. The franchise price is $20,000, and the preliminary monetary dedication ranges from $189,574 to $997,320 on common.
Additionally, franchisees are required to have a minimal of $80,000 to $100,000 in money property and a internet price of $300,000. The ongoing royalty price is 6% of complete income, and the promoting price is 4%.
To get began with a Firehouse Subs franchise, you want to have adequate capital, prior expertise, assess market availability, and submit your utility.
Firehouse Subs additionally has sure necessities, akin to sensible expertise in enterprise administration, monetary stability, and the power to meet the monetary obligations of the franchise.
It’s necessary to rigorously consider if a Firehouse Subs franchise is the proper alternative for you and your monetary scenario earlier than taking the subsequent steps.
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