Jersey Mike’s is an thrilling enterprise alternative that provides a simple and profitable restaurant franchise idea. The firm’s franchise places are simple-to-run, fast-casual sandwich eating places, needing simply a restricted variety of staff and a minimal quantity of apparatus. This makes them ideally suited for a lot of people searching for a start as a small enterprise proprietor and attempting to discover a franchise they’ll each afford and function with out a nice deal of previous expertise.
The operation itself dates again to 1956. However, not too long ago, Jersey Mike’s has been rising quickly, and the nationwide franchise was ranked third on Entrepreneur’s 2023 Franchise 500 Ranking, shifting up from fourth place a yr earlier. As of 2023, the franchise boasts over 2,400 models – an increase of 37.9% in simply 3 years’ time.
As a core part of their efforts to develop franchising alternatives, Jersey Mike’s has gotten the franchise course of down to a science. The nationwide firm supplies a complete coaching program that lasts for eight to ten weeks and consists of each classroom and on-the-job instruction, year-round help to franchisees, and invests closely in advertising and innovation.
As a part of this, Jersey Mike’s prides itself on utilizing solely the freshest and very best quality merchandise, that are ready in entrance of the shopper and are introduced with a excessive degree of power and fervour. Through operational excellence, high-quality menu gadgets, and devoted franchise homeowners throughout the nation, Jersey Mike’s has generated a nationwide following that makes them a recognizable, trusted, and go-to model for fast-casual eating.
With this in thoughts, we’ll cowl the whole lot you want to learn about beginning a Jersey Mike’s franchise and the way much it prices on this put up. Here are the completely different matters we’ll cowl intimately:
How Much Does a Jersey Mike’s Franchise Cost?
Investing in a Jersey Mike’s Subs franchise is a important enterprise choice that requires cautious consideration of all related prices.
Formation Costs
On common, you would wish to make investments $574,323 to become a franchisee. However, this funding quantity can differ primarily based on components such because the franchise places, measurement, and kind of restaurant you select to open.
According to the most recent Franchise Disclosure Document (FDD), the whole funding quantity can vary from $194,035 to $954,611.
The preliminary franchise charge of $18,500 is simply a small a part of the general funding quantity. In addition to this charge, there are a variety of different prices that you’ll want to cowl as a part of your preliminary funding in a Jersey Mike’s Subs franchise.
One of the primary classes of prices that you’ll want to think about is formation prices. These prices embody bills similar to actual property and building charges, hire, leasehold enhancements, gear, furnishings, exterior signage, inside branding, licenses, and permits. The precise prices will rely on the situation and measurement of the restaurant that you just select to open.
Individuals wanting to start a Jersey Mike’s franchise should meet the next necessities:
Minimum Net Worth: $300,000
Liquid Net Worth: $100,000
Operating Expenses
In addition to formation prices, additionally, you will want to think about working bills. These bills embody gadgets similar to preliminary stock, insurance coverage, coaching, grand opening promoting, and extra funds to cowl the primary three months of enterprise.
These prices are vital to get your enterprise up and operating and are clarified within the franchise settlement. They are to guarantee that you’re correctly ready to start serving clients.
Royalty Fees & Marketing Fees
As a franchisee, additionally, you will want to pay royalty charges and advertising charges to Jersey Mike’s. The present royalty charge is 6.5% of your product sales, and the advertising charge is 5% of your product sales. These charges can affect your backside line, so it is essential to think about them as a part of your total funding calculation.
It is essential to needless to say the funding quantity outlined on this article is just a median. The precise funding required to turn out to be a Jersey Mike’s Subs franchisee will differ relying on the situation, measurement, and kind of restaurant that you just select to open. It is crucial to fastidiously evaluate the FDD and to work with a franchise advisor to perceive the entire prices related to proudly owning a Jersey Mike’s Subs franchise.
Owning a Jersey Mike’s Subs franchise is a important enterprise choice that requires cautious consideration of all related prices. On common, you would wish to make investments $574,323 to turn out to be a franchisee, however this quantity can differ relying in your particular circumstances.
You will want to think about formation prices, working bills, and royalty and advertising charges when evaluating the potential returns of proudly owning a franchise.
It is essential to evaluate the FDD and work with a franchise advisor to totally perceive the entire prices and duties related to proudly owning a Jersey Mike’s Subs franchise.
History of Jersey Mike’s
Jersey Opportunities to Own a Franchise of Mike’s Subs in Historical Jersey In 1956, in Point Pleasant, New Jersey, an institution referred to as Mike’s Subs was established. Peter Cancro, who had simply graduated from highschool, bought a job there in 1972 and fell in love with the unique submarine sandwiches.
When Peter was a senior in highschool, the proprietor of Mike’s Subs (the third one) determined to promote the enterprise. Peter Cancro, who was simply 17 years outdated on the time, seized the prospect to purchase the store and did so with some help from his soccer coach.
He expanded on the notion that employees ought to join with clients in a courteous method, which is one thing that also happens as we speak, and launched a few further Mike’s Subs. Cancro began providing franchises in 1987, the identical yr that the agency modified its title to Jersey Mike’s Subs.
Today, Peter Cancro stays in his position as CEO of Jersey Mike’s Franchise Systems Inc., the place he’s chargeable for the oversight of greater than 600 websites, each working and within the planning levels.
Jersey Mike’s Franchise is a well-known chain of sub sandwich retailers that’s recognized for its genuine style and high quality meals. The success of the corporate lies in its menu, which affords a restricted however numerous vary of choices that retains foodies engaged.
The menu consists of chilly subs, sizzling subs, sides, drinks, and desserts that cater to the style buds of individuals of all ages.
Cold subs are some of the in style gadgets on Jersey Mike’s menu. It consists of the Jersey Shore’s Favorite, Ham and Provolone, The Veggie, The Super Sub, Turkey and Provolone, Tuna Fish, Roast Beef and Provolone, The Original Italian, Club Sub, Club Supreme, BLT, The Number Four, Stickball Special, and Cancro Special. These subs are made with contemporary elements and are recognized for his or her refreshing style.
Hot subs are a must-try for individuals who love grilled sandwiches. The sizzling subs menu consists of Grilled Portabella Mushroom & Swiss, Portabella Cheese Steak, Portabella Chicken Cheese Steak, Mike’s Famous Philly, Chipotle Cheese, Big Kahuna Cheese Steak, Big Kahuna Chicken Cheese Steak, Bacon Ranch Chicken Cheese Steak, California Chicken Cheese Steak, and Buffalo Chicken Cheese Steak. These subs are grilled to perfection and are a excellent mixture of flavors and textures.
For youngsters, Jersey Mike’s Franchise has a particular youngsters’ meal that features a sub, chips, and a drink. Parents can select from a number of choices, similar to a Kid’s Meal with Water or a Kid’s Meal with a Fountain Drink.
For those that are searching for a catering choice, Jersey Mike’s Franchise additionally affords sandwich catering that features Subs by the Box, Subs by the Bag, Boxed Lunches, Chips & Drinks, and Fresh Baked Cookies/Brownies. These choices are excellent for occasions, events, and different gatherings.
Hence, the menu at Jersey Mike’s Franchise is numerous and affords a vary of choices for all tastes. From chilly subs to sizzling subs, sides, drinks, and desserts, there’s something for everybody.
Pros of Owning a Jersey Mike’s Franchise
Low Franchise Fee
One of the important thing benefits of proudly owning a Jersey Mike’s franchise is the low franchise charge of $18,500. This makes it a extra reasonably priced choice for aspiring enterprise homeowners in contrast to different franchise manufacturers.
Financial Support
Jersey Mike’s has established relationships with third-party buyers to assist franchisees purchase the mandatory funds to spend money on their companies. This monetary help could make it simpler for franchisees to get began and develop their enterprise.
Exclusive Territory Protection
Jersey Mike’s affords its franchisees unique territory safety, which implies that no different franchisees can function inside the similar territory. This supplies franchisees with peace of thoughts and a better sense of safety of their funding.
Extensive Training and Support
Jersey Mike’s affords complete coaching and ongoing help to its franchisees. This help consists of the whole lot from coaching on working the enterprise to advertising and promotional help, which can assist franchisees succeed and develop their enterprise over time.
Cons of Owning a Jersey Mike’s Franchise
No Absentee Ownership
One of the drawbacks of proudly owning a Jersey Mike’s franchise is that the corporate does not permit absentee possession. This implies that franchisees have to be actively concerned in overseeing and managing the day-to-day operations of the enterprise. Additionally, the franchise can’t be run as a part-time enterprise.
This implies that if you would like to personal a Jersey Mike’s franchise, you have to be dedicated to making it your full-time job and the middle of your consideration. You can’t open them as a facet funding when you give attention to different endeavors or different companies. Jersey Mike’s have to be your predominant enterprise.
That stated, this will also be seen as a professional since it means different franchise homeowners are in the identical boat. This possible will increase the probability of success of Jersey Mike’s franchises, which is sweet for the nationwide model as a complete and your particular person storefront.
High Employee Requirements
Jersey Mike’s requires franchisees to have a minimal of 10-15 staff. This can improve the operational overhead of the enterprise, as franchisees should handle a bigger workforce and canopy the related payroll bills. It additionally means you may run a lean crew at your franchise so as to drive up income and margins.
High Royalty and Marketing Fees
Compared to related franchises, Jersey Mike’s has moderately excessive royalty and advertising charges, that are 6.5% + 5%. These charges can eat into a franchisee’s income and restrict the monetary returns of the enterprise. It is essential for franchisees to fastidiously think about these charges when evaluating the potential returns of proudly owning a Jersey Mike’s franchise.
However, excessive advertising charges additionally sometimes recommend that the nationwide franchise is investing closely in rising its buyer base and innovating when it comes to product choices and high quality. This is one thing that your franchise will profit from within the long-term possible, so it could also be value it from that perspective.
How much potential income does a Jersey Mike’s franchise supply?
A typical Jersey Mike’s Subs franchise brings in 1,220,586 {dollars} in annual income. This is the anticipated median gross sales for franchises which can be anticipated to be operated within the yr 2021.
Given that Jersey Mike’s Subs does not present data on gross sales at particular person eating places in its Franchise Disclosure Document, we have been in a position to calculate the determine by dividing whole franchise gross sales by the whole variety of franchisees. This resulted in $2 billion (2,069).
Franchise homeowners of Jersey Mike’s make annual earnings of $236,242 {dollars}. This equates to an adjusted EBITDA margin of round 19% (as a share of whole gross sales).
We talk about adjusted EBITDA since this determine takes into consideration simply COGS, labor bills, hire, royalties, and advertising charges. This determine does not bear in mind some other expenditures, similar to taxes, debt, or some other prices that aren’t associated to operations.
The 19% margin is just a little bit decrease than the trade common of 25% to 29% for franchises which can be comparable. This is a results of hire, royalties, and advertising bills which can be much better than common.
It is essential to observe that we utilized the trade common for COGS and labor bills; nevertheless, as this data shouldn’t be included within the Franchise Disclosure Document, it is probably going that these prices are considerably decrease.
Application Process
The process of becoming a Jersey Mike’s Subs franchisee begins with the completion of the web franchise software. This software will be discovered on the Jersey Mike’s Subs official web site and is easy to fill in.
To start with, you want to present your private particulars similar to title, contact data, and site. This will assist Jersey Mike’s to perceive your geographical space of curiosity and to assess the feasibility of opening a franchise in your most popular location.
After getting into your private particulars, you have to to present details about your expertise and {qualifications}. Jersey Mike’s is searching for people who’re passionate in regards to the meals trade and have expertise in enterprise operations.
This software part is essential as it will assist Jersey Mike’s decide when you’ve got the abilities and background vital to run a profitable franchise.
Once you might have stuffed in your expertise and {qualifications}, you can be requested to present further details about your monetary state of affairs, together with your web value, liquid property, and the supply of your funding funds.
This data is vital as Jersey Mike’s is searching for people with the monetary assets vital to start and maintain a franchise enterprise.
After submitting the web software, Jersey Mike’s franchisor will evaluate it and get again to you inside a few days. If your software is accepted, you can be invited for an in-person assembly or a convention name with Jersey Mike’s franchise improvement consultant.
During this assembly, you should have the chance to talk about your new franchise objectives, expectations, and the general funding course of intimately.
In addition to the web software, you too can attain out to Jersey Mike’s by way of e-mail or cellphone. Their franchise improvement crew will be reached at 732-292-8272 or by e-mail at franchise@jerseymikes.com. The crew is at all times accessible to reply any questions on franchise alternatives and give you further details about the method. It’s at all times essential to ask upfront questions earlier than agreeing to or signing something. Before signing the dotted line, you must also think about having a lawyer look over any contracts or phrases. That method, you’ll know precisely what is anticipated of you and what you can be required to uphold as a franchise proprietor.
In conclusion, the applying course of for a Jersey Mike’s Subs franchise is easy and accessible. All you want to do is full the web software, present the mandatory data, and watch for a response from Jersey Mike’s.
If your software is accepted, you can be effectively in your method to proudly owning a profitable franchise enterprise with a respected model.
Training & Support Program
Jersey Mike’s takes the coaching and help of its franchisees very severely. In order to assist its franchisees run profitable eating places, the corporate invests a important quantity of assets into offering complete coaching and help.
In 2022, Jersey Mike’s hosted quite a few coaching classes, together with regional manager-level coaching, multi-unit workshops, cultural and administration coaching classes, and city corridor conferences. These coaching classes cowl a wide selection of matters, together with management, administration, operations, and customer support.
In addition to its intensive coaching program, Jersey Mike’s additionally has a robust IT crew that gives help for a variety of proprietary methods, together with its level of sale system, on-line ordering platform, and cellular app.
The IT crew operates an in-house assist desk, which is obtainable to franchisees and their crews for 15 hours a day, 7 days a week. This degree of help permits franchisees to obtain fast and environment friendly assist with any technical points they could encounter.
The firm’s IT crew has obtained a variety of awards for its work, together with recognition as a 2021 Hospitality Technology Industry Hero and a 2021 Hospitality Technology Top Women in Technology.
In 2022, the crew obtained the ICX Association Elevate Award for Best Mobile ICX and the Technomic Consumers’ Choice Award for Highest-Rated Online Ordering Experience. These awards are a testomony to the corporate’s dedication to offering top-notch help and coaching to its franchisees.
By investing within the success of its franchisees, Jersey Mike’s is ready to preserve its place as one of many main sandwich franchises within the nation.
Franchise Financing Options
Small Business Administration (SBA) Loans
SBA loans are supplied by way of the United States Small Business Administration (SBA). These loans are distinctive in that they’re backed by the federal authorities, making them extra accessible for small enterprise homeowners throughout the nation. Lenders that work with the SBA to supply these loans are, as a consequence, uncovered to much less danger in offering the loans. This opens them up to a wider array of debtors and likewise lowers the rates of interest related to them.
Even although SBA Loans are sometimes a nice choice due to the favorable phrases, the applying is prolonged and intensive. Borrowers have to present a nice deal of documentation and be significantly diligent as they fill out the related varieties regarding their firm, credit score historical past, and extra.
The hottest mortgage supplied by the SBA is their SBA 7(a) mortgage. The SBA 7(a) mortgage is a time period mortgage that’s backed by the federal authorities and permits debtors to entry up to $5 million in funding.
One factor to consider when borrowing from the SBA for a franchise is that the SBA will solely present funds to enterprise homeowners who’re directing the cash to particular pre-approved franchises. The record of franchises which were pre-approved by the SBA and which SBA loans can be utilized for will be discovered of their online franchise directory.
Term Loan
Another financing choice for people wanting to open a franchise operation is time period loans. Term loans are a nice useful resource for enterprise homeowners as a result of they supply a set sum of money in a lump sum upfront. This cash should then be repaid over a set time frame at a set or variable rate of interest.
You can get a time period mortgage by way of both a conventional brick-and-mortar financial institution lender or by way of another lender (like Biz2Credit!). There are professionals and cons to each of those choices.
Term loans which can be supplied by conventional banks are exceptionally tough to qualify for. The software processes are lengthy and drawn out, and even after finishing the method, there isn’t any assure that your software might be accepted. However, due to the prolonged software course of, conventional financial institution lenders are in a position to supply among the lowest rates of interest accessible. This is as a result of they’re in a position to totally assess the danger of offering funds to debtors prematurely of committing to a mortgage.
Term loans which can be supplied by various lenders, then again, are much simpler to qualify for. They sometimes supply on-line functions that may be accomplished shortly and with minimal effort. Additionally, relying on the circumstances, you may obtain approval and the funds inside as little as 24 hours. However, since various lenders are taking up extra danger than conventional lenders, the rates of interest on these loans have a tendency to be greater to compensate for this.
Line of Credit
Lines of credit score are one other financing useful resource that many small enterprise homeowners – together with franchise homeowners – make use of. Lines of credit score are completely different than different sorts of loans as they’re a set sum of money that may be borrowed at any time, they usually stay open to be used indefinitely.
Borrowers can borrow up to the utmost worth on the road of credit score, sometimes at a variable rate of interest, after which pays again the mortgage at their leisure (as opposed to having a pre-defined set time period of reimbursement). Once the cash is repaid, debtors can then borrow off the road of credit score once more.
Because traces of credit score stay open indefinitely and will be borrowed from at any time, they’re usually an essential useful resource for companies to have entry to. They make shoring up money movement and coping with emergencies much simpler, as you don’t have to apply for a brand-new mortgage over again.
That stated, traces of credit score will not be ideally suited for long-term borrowing. The rates of interest are variable and have a tendency to be greater than you possibly can get with a time period mortgage. Instead, they’re higher for hole funding or interim financing you can make the most of when you seek for a long-term financing resolution that meets your wants.
Equipment Financing
Equipment financing could be very in style amongst franchise homeowners as a result of many franchises require a nice deal of business gear to be operated. Equipment financing is nice as a result of it is likely one of the simpler types of financing to get hold of, and it comes with decrease rates of interest than many different choices. This is basically due to the truth that the gear you buy with the financing serves because the collateral on the mortgage. That implies that for those who default, the lender nonetheless has one thing of worth they’ll dump to salvage at the very least a part of the cash they loaned out. This makes the loans significantly much less dangerous for lenders.
Equipment financing is a nice choice for franchise homeowners and sometimes can be utilized for many high-value gear that you could be want to buy to get your franchise off the bottom and operating.
Conclusion
Jersey Mike’s is a well-established model with a robust popularity for high quality, customer support, and dedication to their franchisees. The firm has a complete coaching and help program, which incorporates ongoing coaching, technical help, and advertising help.
This help is crucial for franchisees to develop their enterprise, keep up to date with the most recent trade developments, and preserve the excessive requirements that Jersey Mike’s is thought for.
The menu is proscribed however robust, which makes it simpler for franchisees to give attention to high quality, consistency, and buyer satisfaction. This give attention to high quality has helped to construct the model’s popularity and entice loyal clients. Plus, with a extra restricted menu, the problem of the operational logistics of offering all of the completely different menu gadgets is considerably decrease. This will be very useful, particularly for these with restricted expertise within the fast-casual eating trade.
The franchise has a strong on-line presence and makes use of a vary of know-how platforms to help franchisees. This consists of a point-of-sale system, a web based ordering platform, and a cellular app. These methods are designed to assist franchisees run their enterprise extra effectively and successfully and supply clients with a seamless expertise. Again, Jersey Mike’s works onerous to easy out any operational challenges for its franchisees prematurely.
In conclusion, proudly owning a Jersey Mike’s franchise will be a profitable enterprise alternative, particularly for these with a ardour for the meals trade, a dedication to high quality and customer support, and a willingness to work onerous and make investments time and power into constructing their enterprise. With a robust model, a well-regarded menu, and a loyal buyer base, the potential for achievement is excessive.
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