I'm going to buy a Subway franchise, I think...
 

Its a 13 year old store, not one of the million stores that popped up all at once 3 years ago. Sales are consistent. Looks like a conservative investment that will not require much of my time and will offer a good return. I've never pulled the trigger on anything this big before. Any thoughts? Please let it be known if you are successful and your thoughts matter while you are at it, thanks.

I manged a fast food francise for seven years for a couple. (In fact, that's how I met my wife.) Fourteen hour days were the standard. I also worked at a Subway for a year or so.

I would imagine it would be a bitch if you most trusted employee leaves. Suddenly you might find yourself with none you trust to run your store.

I know someone who owns a number of Subway francises and he lives rather well.

:1orglaugh Funniest thing I've read all day.

I managed for Taco Bell for 7 years, two brothers owned a number of stores, I remember on day the younger one turned and looked at me and said..."If there's a harder way to make a dime in this world, I don't know what it is."

A few small things you have not even begun to consider:
Turnover
Training
Loss due to spoilage, and/or theft.

Turnover and training will be your biggest killers. Sure it isn't like my store where I had 40+ people on staff, but you're dealing mainly with kids, and kids think like kids.

Nothing like thinking you're going to have a nice Friday off and finding out your crew walked out on you. Or showing up to find out your assistant manager is closing the lobby early. The list goes on.

I don't wish food service on even my worst enemies...good luck. I suggest you spend some time working in one of these places before you drop a dime.

I eat Subway every day!

14...you got it. The last Taco Bell I ran, was almost a 2 hour drive before I relocated...that's 2 hours too and from...then I would spend the 14 hour days working...so yeah 18 hour days total...and that's not including the "days off" you're fielding phone calls, or having to show up to fix some bullshit problem.

So what are the numbers? how much does it cost? what's the income, etc?

are you hiring?

I live in a pretty small town and there's 4 Subways within a 4 mile radius, all run by the same owner, so they must do well. I suppose that it depends on the location of the one you're looking at buying.

Woo Hoo !!!

Free Footlongs !!!

;-)

Asking Price $339,000
Gross Income $365,000
Cash Flow $110,000
Year Established 1994
Employees 8

The Cash flow is the profit the store owner would have had if you add back the store manager's salary. The store manager made 30k last year so the owner really only pocketed 80k. And of course, if he had to payback a loan he made even less.

One thing worth mentioning is that the EXTREMELY favorable lease will be up in 3 years and rent will go up about $10k a year.

Thanks to everyone who posted. Rochard and Eros, it only has 8 employees and if the manager needs to be replaced I have someone I trust very much so I am less worried about its needs invading my personal time but if it happens from time to time its ok. Did any of your stores ever see a major business decline? If I only put $100k down my loan payment is going to be so high I only make about $35k a year (ya know, if I pay a manager). I don't want to lose my ass.

Thanks

Most of your time will be on hiring and firing staff, training is a bitch and at that hourly rate. It's like baby sitting.

Not saying dont' do it, but any kind of food business is tough. I know, trust me. Good luck with it either way you go.

Jared would approve

I agree with alot of what's been said here.

I will say though that I think a Subway may be the most low maintenance fast food joint you could own.
You're talking two maybe three employees to run a shift instead of the 8-10 you'd need at McD's or Taco Bell.
Plus the hours are only lunch and dinner, not 24 hours like alot of McD's are now, or almost 24 like a Taco Bell is.

An asking price of 3 years net seems pretty reasonable, as long as the demographics in your area are good (the area is growing not shrinking) I think you should do it (since it's obvious that you want to)

Of course you gotta do your due diligence and make sure they didn't cook the books and that the ceiling isn't about to collapse etc...but I'm sure you know that.

Good luck

The last couple of years I was with the company, my job was taking over stores my supervisor didn't want to have to babysit the manager at. These were trouble stores in outlying areas that just were not doing well.

In our company, if you were doing 70% of plan you were successful, my 2nd to last store I was doing 114% of plan, and then my last store, I was there for about 16 months and my store was number 1 growth in the company for that entire time out of 114 other stores.

I'm saying all this for a reason, it depends upon who you have managing your store. My last store was on Kaufman, Texas about an hour east of Dallas. It was on a highway that lead into East, Texas and was only about two years old. It should have been making bank, but when I got there it was only making around $7K-$8K a week. When I left it was doing $21K - $24K a week.

How I personally changed the store around, was by spending so much time hiring and training, and staffing the store to make sure service was fast and quick.

In the beginning I caught shit because of my staffing. Taco Bell corps budget for staffing was based on an 80% productivity level, and these guys who owned these franchises were looking at 110%. In other words for every dollar they spent, they wanted $1.10 worth of work out of teenagers.

But I knew I had to build up the trust of customers again, letting them know that if they came in they would get quick fast service.
It got to a point where during lunch there would only be one car in line, and by the time they ordered their food and pulled around to pay for it, we were there with food in hand.

If you were to walk into my store, it would look like we didn't do any business in our drive thru, however business was better than the store had ever seen.

My point is, you will always have to watch over your store. You will always be involved. If someone has told you that you won't, you're setting yourself up for disaster.

Being a manager / owner is like being a parent, your toughest job is making sure everyone else is doing their job, and if you don't follow up, or have the most effective management hired to do the follow up for you, you will easily get fucked over.

some very sound advice in here, there is a lot more to running a restaurant than meets the eye.:2 cents:

I worked at wendys for 6 years.

3 years as a manager.

Unless you have a STRONG management team that is able to work without being baby sat, running a fast food franchise is extremely involved.

So involved that I don't think its even worth the profit.

The wendy's I worked at brought in as little as $2,000 profit a month at times, while grossing over $100,000 in sales that same month. Thats because of the same things everyone else mentioned. Food cost, labor, turnover, waste etc etc.

If you are serious about buying it MAKE SURE you have a STRONG management staff. Without a strong management staff your profit will be horrible.

Subway has decent, fresh food and that doesnt go out of style.

Your main thing will be job fairs/human resources obviously. You'll get tons of highschool kids applying, but you'll want someone who NEEDS the job of managing so they wont decide to not show up because some other kid has a keg party one weekend.

Do like the big boys and only hire part time, temporary staff so you never need to give them insurance or raises, lol. Except the manager.

You make sure that you check your trading area so you would know if you will have customers... If you will start the biz, have a good service.. It really count...

Can I hire only attractive high school girls? Lol, j/k. Thanks for all the info everyone.

Thats what I did for years lol. But they were flaky (duh!) so only if you dont really need to rely on them.

No Way. If you do not Have the Cash in Hand to buy this business. A loan is a Bad idea.

Great advice, eros...

Most businesses' biggest headaches come from HR issues. You've heard that over and over in this post and gotten some great advice. Just don't underestimate how much time managing people will take, even if you have a store manager.

Bingo :thumbsup

Did you do any of them? Maybe I want to work at my store after all.

I ran a computer store as manager for a year. It's tough work, and long hours. If something isn't getting done, it's YOU that has to do it.

Perhaps you should consider running it yourself (working 40 hours per week) and doing the adult stuff on the side? 80k/year is nothing to shake a stick at.

On another note, you can do more marketing/promotions/community involvement to drive my business to the restaurant, so that $365,000 per year could easily hit $500,000 in a few years if you put in conscious effort.

hire twinks, homos have more money per capita :)

You can probably get an endless line of workers for your Subway right here on GFY and they will probably settle for less money than the high school kid's ;)

My local subway just had a complete employee turnover. Within a week all new people. They musta been doing something shady. Still great sandwiches, just different drones making them.

Damn eros, you ought to partner with some investors and get a partnership running some taco bells.... :)

Before you buy you might want to read about it.

http://www.franchise.com/franchise/Subway.cfm

I think they all covered all the info that you really need

Been there, done that.
The young and cute ones pretty much think all they have to do is be cute.

The best employees I ever had in this type of pay range was middle aged black women.

LOL man, I don't know about that. I would probably do a Nick Cage Leaving Las Vegas kind of thing before I ever chose to go back to Taco Bell.

I still suffer from Post Traumatic Stress Disorder ;)