Jersey Mike’s Subs has become a popular choice for foodies and entrepreneurs alike. With its top-quality ingredients and a commitment to excellent customer service, it’s no wonder that many people are interested in owning a Jersey Mike’s franchise. However, before diving into this venture, it is essential to understand the financial requirements and costs associated with becoming a franchisee. In this blog post, we will provide a comprehensive overview of the costs involved in starting a Jersey Mike’s franchise, along with an insight into the application process, profit margin potential, and the pros and cons of owning a franchise.
Overview of Jersey Mike’s Franchise
Jersey Mike’s Subs is a fast-casual submarine sandwich franchise that was established in 1956. It has now grown to over 2,000 locations across the United States and has become renowned for its authentic flavor and commitment to quality. The Jersey Mike’s franchise business model allows entrepreneurs to benefit from the brand recognition and proven success of the company while still maintaining the flexibility of owning their own business.
How to apply for Jersey Mike’s Franchise
To apply for a Jersey Mike’s franchise, interested individuals need to complete a straightforward application process. Here is a step-by-step breakdown of the application process:
- Research: Before applying, conduct thorough research about the franchising opportunity. Understand the brand, their values, and the market demand in your desired location.
- Initial Inquiry: Fill out the online inquiry form available on the official Jersey Mike’s website and express your interest in becoming a franchisee. Provide your contact information, including your full name, phone number, and email address.
- Initial Screening: Once your inquiry is received, a representative from Jersey Mike’s corporate office will reach out to you to conduct an initial screening, where they will assess your qualifications and suitability as a potential franchise owner.
- Disclosure Documents: If you pass the initial screening, you will receive the Franchise Disclosure Document (FDD) to review. The FDD contains crucial information about the franchise, including its history, fees, and obligations.
- Location Selection: After reviewing the FDD and ensuring you meet the financial requirements, you will work with the Jersey Mike’s corporate team to select a suitable location for your franchise. They will consider factors like market demographics and competition.
- Franchise Agreement: Once the location is finalized, you will receive the franchise agreement. Carefully review the terms and conditions before signing.
- Training and Support: Jersey Mike’s provides comprehensive training for new franchisees to ensure they understand the brand’s standards and operations.
- Soft Opening and Grand Opening: After completing training, prepare for the soft opening and grand opening of your Jersey Mike’s franchise, where you will start serving customers and building your business.
Jersey Mike’s Franchise Cost & Investment Breakdown:
Becoming a franchisee involves several costs and fees. Let’s take a closer look at the breakdown:
- Franchise Fee: The initial franchise fee for a Jersey Mike’s franchise is $18,500. This fee grants you the right to operate a franchise location and receive support from the corporate team.
- Equipment and Décor: The cost of equipment and décor will depend on the size of the location and the specific franchise requirements. On average, expect to invest around $11,000 to $102,000 in these elements.
- Construction and Leasehold Improvements: The cost of construction and leasehold improvements can vary significantly based on factors such as location, size, and condition of the space. It is advisable to consult with contractors and obtain accurate quotes.
- Initial Inventory and Supplies: You will need to stock up on initial inventory and supplies, including bread, meats, cheeses, and condiments, which typically costs around $1,000 to $30,000.
- Rent and Security Deposit: The cost of rent and security deposit will depend on the location and the terms of the lease agreement. It is crucial to consider these expenses when budgeting for your franchise venture.
- Working Capital: It is recommended to have a budget for working capital to cover the initial operating expenses, such as employee wages, marketing costs, and utility bills, until your franchise becomes profitable. The amount required will vary based on various factors.
|One-time fee paid to Jersey Mike’s for the franchise rights.
|Real Estate & Construction Fee
|Fee paid to Jersey Mike’s for assistance with site selection and construction.
|$0 – $38,250
|Varies depending on location and lease terms.
|$4,876 – $16,000
|Cost of designing and obtaining permits for the restaurant.
|$62,299 – $349,838
|Cost of build-out and equipment for the restaurant.
|Inventory & Supplies
|$10,000 – $20,000
|Initial stock of food, beverages, and other supplies.
|Marketing & Advertising
|$5,000 – $10,000
|Initial marketing and advertising expenses to launch the store.
|$5,000 – $10,000
|Cost of attending Jersey Mike’s training programs.
|$30,000 – $50,000
|Reserve for ongoing operational expenses before turning a profit.
|Total Initial Investment
|$178,523 – $746,342
|Varies depending on factors like location, size, and build-out costs.
- Net Worth: $300,000 minimum
- Liquid Cash: $100,000 minimum
- Ongoing Fees: 6.5% royalty fee and 5% advertising royalty fee.
While the specific profit margin of a Jersey Mike’s franchise can vary, the brand has a good track record of success. It’s important to note that profitability depends on various factors, including location, local competition, operating costs, and the franchise owner’s ability to manage the business effectively.
However, several resources offer estimated profit margins for Jersey Mike’s franchises:
- SharpSheets: Estimates an average 15% EBITDA margin based on average unit volume and expenses.
- FinModelsLab: Suggests a range of 10% to 15% net profit margin for successful franchisees.
- Jersey Mike’s Franchise Website: Does not disclose specific profit margins but highlights an average unit volume of $1,049,047 (2021) and a 5-year payback period for the initial investment.
Remember: These are just estimates, and individual results may differ significantly. Conducting thorough due diligence and researching specific locations is crucial before investing in any franchise. Consider factors like local competition, market saturation, and projected sales volume to get a more accurate picture of potential profitability.
Pros and Cons
Let’s weigh the pros and cons of owning a Jersey Mike’s franchise:
- Established Brand: Jersey Mike’s Subs has a solid reputation and widespread brand recognition, which can translate into a loyal customer base.
- Extensive Support: Franchisees receive comprehensive initial training, ongoing support, and access to operational resources from the corporate team.
- Quality Ingredients: Jersey Mike’s commitment to using fresh and high-quality ingredients sets them apart from other sandwich franchises, allowing franchisees to offer a superior product.
- Initial Investment: The upfront costs associated with starting a Jersey Mike’s franchise can be substantial, making it a significant financial commitment.
- Franchise Fees: In addition to the initial franchise fee, ongoing royalty fees of 6.5% of gross sales are payable to Jersey Mike’s.
- Market Saturation: Depending on the location, there may already be a significant number of sandwich and fast-food options, increasing competition.
Becoming a Jersey Mike’s franchisee can be an exciting opportunity for entrepreneurs who are passionate about the brand and willing to invest in a proven business model. It is crucial to conduct thorough research, understand the costs involved, and carefully review the terms and conditions before committing to this venture. By aligning yourself with a recognized brand like Jersey Mike’s Subs, you can tap into a thriving market and potentially reap the benefits of owning a successful franchise.
Can I secure financing for opening a Jersey Mike's franchise?
Yes, securing financing is possible. Many entrepreneurs explore options like business loans, Small Business Administration (SBA) loans, or personal savings to fund their franchise investment. It’s advisable to consult with financial institutions and explore available options.
Is prior experience in the food industry necessary to become a franchise owner?
While prior experience in the food industry can be beneficial, it is not a strict requirement to become a Jersey Mike’s franchise owner. Their comprehensive training program is designed to equip franchisees with the necessary knowledge and skills to operate the business successfully.
Are there territorial exclusivity rights for franchisees?
Jersey Mike’s does offer territorial exclusivity rights, allowing franchisees to operate within a defined area without direct competition from other Jersey Mike’s locations.
Can I own multiple Jersey Mike's franchises?
Yes, after establishing a successful franchise, becoming a multi-unit owner and expanding your business with additional locations is possible. However, it is important to note that additional investment and management responsibilities will be required.