Subway Franchise...

stephenni1971

I could try and follow their Business Model and make my own store identical to their's but just under a different brand-name? I could start small without much funds and work myself up in Business.

To be honest I think you are in a bit of a dream world...

Have you any idea the cost of signage & fit out for a new subway store? Overs, blast grills, chiller cabinets, counters etc? I reckon its well to the £30k + mark, and that is before you sell a sandwich.

Starting more modestly, a second hand chiller, some worktop from B&Q and a couple of fridges from Currys and you could be up and running for £3-4 grand.

My local sandwich shop fill theirs so full you can barely squeeze them into the triangle boxes, on the other hand I was made to wait at Subway for over a minute because 2 bits of ham were stuck together and she refused to give me both. Everything they make is portioned, oh and by the way where do you think you have to buy your supplies from, the cheapest provider... oh no, SUBWAY approved of course!!!

And please be realistic in that if you do spend a couple of years working in the industry, you will have exactly the same level of experience and tens of thousands of others who do it as well, approaching a bank on the basis 'I worked in McDs for two years so I know all about the business' is not likely to impress anyone.

Start small, set realistic goals, and dont be afraid to quit if it does not work.

Dreaming about borrowing 100k at the age of 20 and getting on the road to riches = waste of your time and effort.

kittiej

Do you actually have any idea of the actual costs involved for your business idea?

Would you want a sandwich round or premises? Either way you need somewhere properly kitted out to H&S standards. Would you need staff? Uniform wages etc. Then there's ingredients where would you get those from and how much would you be paying? What would your running costs be? Utilities, rent, service charges, rates? What about initial planning permission anyway?

Then there are your banking costs, the time to do the accounts etc.

If it were me I'd start with something like a burger van that is already certificated for food, get yourself on a food hygiene course and see what happened. Better to waste a few grand than forty.

RobertoMoir

Amit92 wrote: »

Thanks alot for your useful posts. But the franchise offers look so attractive in the long-term when you can expand.

Of course offers look attractive. They're trying to get you to buy something. They're not going to get many takers for "franchise on its last legs for sale to new franchisee. Last year's figures look good but since the town bypass went in and the council offered free weekend parking over the other side of town, passing "foot" trade is projected to decline 30%, and weekly trade from office workers buying lunches remains uncertain in this recession" are they?

ramenkid

Yes, you are in the dream world, it is not as easy as you think. Otherwise there would be lots of people doing it. To make a Subway successful, it takes more than the money & energy you invest, most of the times you can only do so much. Lots of things are not in your control - I'd say it's down to luck too. Yeah it probably sound good that you own a Subway franchise, but at the end of the day you may not take home with much money & you work stupidly lots of hours.

I'm speaking as a long suffering girlfriend of an ex Subway franchisee.

stephenni1971

I've just run a few figures on this fantastic thriving business...

Turnover £4000
Gross Profit 70% = £2800 ( Turnover less cost of sales, bread, ingredients etc)

Less franchise fee 8% of GP = £224
Less rent & rates = £442
Less Heat Light & Insurance at say £100 pw
Less van and insurance for the deliveries at say £100 pw
Less wages - given the hours open and requiring 2 staff at any one time you need 5.5 staff - rounding up to 6.5 to allow for prep time/sickness etc.
This comes in at around £1700 assuming basic wages + emp NI contributions

This leaves YOU £234 per week.

From that you need to deduct your hours ( will be lots ) advertising, unexpected costs, breakdowns, professional fees, accountants, legal costs, staffing & HR.

Will you do the payroll or farm that out?
Will you do the weekly accounts or farm that out?


What's listed above are the essentials only - there may be other costs I have not factored.

Added to that as other posts have said what about other environmental factors in the area, competition etc?

Amit92

stephenni1971 wrote: »

I've just run a few figures on this fantastic thriving business...

Turnover £4000
Gross Profit 70% = £2800 ( Turnover less cost of sales, bread, ingredients etc)

Less franchise fee 8% of GP = £224
Less rent & rates = £442
Less Heat Light & Insurance at say £100 pw
Less van and insurance for the deliveries at say £100 pw
Less wages - given the hours open and requiring 2 staff at any one time you need 5.5 staff - rounding up to 6.5 to allow for prep time/sickness etc.
This comes in at around £1700 assuming basic wages + emp NI contributions

This leaves YOU £234 per week.

From that you need to deduct your hours ( will be lots ) advertising, unexpected costs, breakdowns, professional fees, accountants, legal costs, staffing & HR.

Will you do the payroll or farm that out?
Will you do the weekly accounts or farm that out?


What's listed above are the essentials only - there may be other costs I have not factored.

Added to that as other posts have said what about other environmental factors in the area, competition etc?

Thanks alot for all the advice I have received from this thread. I can see more clearly why there are alot of Subway Franchises forsale. I think its better to start small and independently than franchise? I think its wise to stay in Higher-Education for the time being . I think seeing these Subway franchises turnover and gross profit...did put me into a dreamworld simulation!

wuckfit

stephenni1971 wrote: »

To be honest I think you are in a bit of a dream world...

Have you any idea the cost of signage & fit out for a new subway store? Overs, blast grills, chiller cabinets, counters etc? I reckon its well to the £30k + mark, and that is before you sell a sandwich.

Starting more modestly, a second hand chiller, some worktop from B&Q and a couple of fridges from Currys and you could be up and running for £3-4 grand.

My local sandwich shop fill theirs so full you can barely squeeze them into the triangle boxes, on the other hand I was made to wait at Subway for over a minute because 2 bits of ham were stuck together and she refused to give me both. Everything they make is portioned, oh and by the way where do you think you have to buy your supplies from, the cheapest provider... oh no, SUBWAY approved of course!!!

And please be realistic in that if you do spend a couple of years working in the industry, you will have exactly the same level of experience and tens of thousands of others who do it as well, approaching a bank on the basis 'I worked in McDs for two years so I know all about the business' is not likely to impress anyone.

Start small, set realistic goals, and dont be afraid to quit if it does not work.

Dreaming about borrowing 100k at the age of 20 and getting on the road to riches = waste of your time and effort.

You're not far off. the Subway website has a breakdown of all the costs.
these include
A Franchise fee (nearly £10k)
2 months rent deposit (at least £2k)
Improvements to leasehold, or more accurately, a shop refit (up to 18k)
Equipment (at least 20k, up to 45k depending on size of unit)
Security system (at least another £1k)
Outside signage (between £1.5k and 4.5k)
There's more too. total cost between c. 71k and £175k depending on unit size.

And yet for around £3-5 k as stephenni says, you could get up and running on your own.
Personally I think it might cost a little bit more including your own signage. I had a new sign done when my old one came down in high winds, just a vinyl transfer onto perspex with logo, and website and telephone number and it was around £500. I think this is an area where it's best not to cut corners. A professional sign will catch people's attention and make you stand out. Additionally, advertising when you open is vital. leaflet drops are ideal, also a discount coupon is a good way to gauage how effective your leafleting is, especially if you put a code on the coupon. If you distribute 10,000 leaflets with coupons, and only 10 people take advantage, then it gives indications of how to proceed next time. However if you get 9000 customers taking you up then you know your advertising is effective.
Having your own business with your own ideas is far more rewarding than being a franchisee of a big brand. There's not much point in being forced into participation in a promotion involving triple-ham and chicken subs, if it co-incides with a local vegetarian craft fair/bypass demonstration. If you're your own boss, you can tailor your business to local needs. what sells in Cardiff might not sell in Canterbury.

paulwf

Savvy_Sue wrote: »

Yes, get a job in one. Any one will do, heck, a working in a Subway or MacDonalds will do, any of the chains, or in an independent sandwich shop. Make friends with the manager / owner, and see what they say about the profit to be made.

Also learn how to treat staff, or not, and the myriad regulations which go with food hygiene, employing staff, health & safety, and dealing with the Great British Public.

Then see if you're still so keen, and think there's a fortune waiting to be made.

Plus point: you can do the above at the same time as getting your degree.

As ever Savvy Sue offers excellent advice straight to the point.

Being at uni doesn't have to be a waste of 3 years, you could do a degree relevant to the subject (catering & hospitality) or business studies. TBH just go for the degree you enjoy most, you'll still learn lots of skills useful for business and will gain lots of useful life experiences.

Everyone is different, but IMHO to be a shop owner rather than just a shop manager you are better off being 30 than 19. Dealing with part time teenage staff on min wage on one side and sales reps wanting to take all your money on the other requires certain skills that only come with age.

At 17 you should be keeping your options open, getting a degree will do this, if you still have your heart set on a catering business you will only be 21 and have plenty of time to work your way up. And as others have pointed out the chances of being lent £100K at 19 are slim.

Savvy_Sue

wuckfit wrote: »

Additionally, advertising when you open is vital. leaflet drops are ideal,

I misunderstood this the first time I read it, but no matter, what I 'read' is worthy of comment.

If you run a cafe or a bar or a takeaway or ANYTHING with set opening hours, you HAVE to be open when you say you will, especially in the early days, or you WILL lose trade, again especialy in the early days.

That means that even if all your staff phone in sick, your g/f is moaning she hasn't seen you for 6 weeks, your dog just died and you're going down with flu, YOU STILL HAVE TO OPEN. And you have to do more than put a brave face on all of the above, you have to be cheerful, friendly, alert and ready to listen to your customers' moans and groans, because they're surely not particularly interested in your woes.

You could do worse than listen to the latest few episodes of The Archers (Radio 4, 7 pm Sunday - Friday, repeated 2 pm the next day), where someone is planning to open a bar. He's been running a caff, but that's not punishment enough, even though he had huge staff problems when his most reliable staff member gave notice a while back. He's still at the research stage, but I predict he won't have a g/f much longer, and as he lives with her THAT's going to be 'interesting'.

IRL, I have a friend who used to run a cyber-cafe in France, in the early days before the world and his wife had a pc at home. It never made much of a profit, but it was getting there, until his wife was hospitalised (nearly died) and he had 2 children to get to and from school, as well as a cafe to open. Just couldn't be done.

paulwf wrote: »

And as others have pointed out the chances of being lent £100K at 19 are slim.

The OP could ask himself (I'm guessing he's a he, apologies if not!) "Would I lend myself this much money at my age and with my (lack of) experience to do this? What would I have to do to convince myself I'm a safe bet?" :rotfl::rotfl:

nexuss

Subway cannot compete with mcdonalds regarding breakfasts especially and their costs.Look at how many subway franchises are closing down all over the UK.
I have seen a lot of subway staff 'microwave' coffee latte instead of using the normal coffee machines in front of the customer which made me laugh simply to speed things up.