Jersey Mike’s Franchise Restaurant offers a wide assortment of made-to-order submarine type sandwiches, other hot sandwiches, and related food products and beverages for on- premises and off-premises consumption. Jersey Mikes operated under the name “Mike’s Submarines” from 1956 to 2002 and then changed its name to Jersey Mike’s.
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00:00 Introduction
00:11 Locations
00:20 Jersey Mike’s
00:31 Franchise Fee, Franchise Range & Leasehold Improvements
01:15 Weekly Gross Sales
01:25 Average Franchise Sales
01:39 Estimated Profits
02:24 Growth
02:43 Competition
03:13 Subscribe!
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In 2019 Sub Above LLC was formed as an indirect wholly owned subsidiary of Jersey Mike’s Franchise Systems, Inc. JMFS was the former franchisor of Jersey Mike’s franchise system before the closing of the 2019 Securitization Transaction.
The current CEO Peter Cancro started working at Mike’s Subs in 1971 at the age of 14. At the age of 17 when he graduated high school he bought the storefront and became the owner of Mike Subs. In 1987 he began franchising the business and since then he has expanded the Jersey Mike’s Franchise to 1800+ locations across the United States. There currently are 1796 franchise stores and 51 company owned locations.
Everything is made right in front of you so you know exactly what is being put into your sub sandwich.
The initial Jersey Mike’s Franchise Fee is $18,500. This is the upfront fee that must be paid when opening a Jersey Mike’s franchise.
The estimated total investment necessary to begin operation of a Jersey Mike’s Franchise ranges from $144,668 to $786,233
Continuing Services and Royalty Fees: 6.5% of weekly Gross Sales
Cooperative Advertising and Development Fund: 1% of weekly Gross Sales
Jersey Mike’s does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. However, if you are purchasing an existing Jersey Mike’s, the company may provide you with the actual records of that Jersey Mike’s.
However, using the Franchisor income statement we can deduce from look at the income statement line item “Franchise Revenue”
Based on 1585 franchise units
Continuing Services and Royalty Fees: 6.5% of Gross Sales
In 2020 franchise revenues were $120.8 million
Estimated 2020 Total Franchise Sales: $1.85 billion
Estimated 2020 Average Franchise Sales: $1.17 million
1 – Based on a midpoint investment of $465,451 with estimated profits of $117,253 at a 10% profit margin it would take about 5 years to recoup your investment.
2 – Based on a midpoint investment of $465,451 with estimated profits of $175,879 at a 15% profit margin it would take about 5 years to recoup your investment.
3 – Based on a midpoint investment of $465,451 with estimated profits of $234,506 at a 20% profit margin it would take about 3 years to recoup your investment.
The return on your investment is quite promising for the restaurant industry.
The best case scenario for a Jersey Mike’s franchise is making your money back in 3 years and if you have lower profitability of 10% it may take up to 5 years to get a return on your initial capital.
Sub Above LLC is the franchisor of all Jersey Mike businesses and the company was profitable in 2020 with a net income of 101.8 million in 2020. The large discrepancy in net incomes from 2019 to 2020 is because in 2019 Sub Above LLC was transferred the rights to being the franchisor and only had financial information for one singular week. However, by looking at 2020 finances Sub Above LLC has a very strong profit margin with revenues totaling $124 million and expenses of only $2.4 million.
In 2020, A Sub Above LLC had cash at the end of the year of $8.07 million which is a 6% increase from the year end cash in 2019 of $7.6 million. However, some information is not comparable between 2019 and 2020 as 2019 only recorded one week of financial information. In 2020 there was $107.2 million distributed to members. This indicates the health of the financials as they only kept $480,000 of the $107.7 million they earned from operating activities.
Over the last three years the company has seen large growth in the number of new franchise units opened. Company-owned stores have declined and have been transferred to franchise locations. On average over the last three years there has been an average of 179 new franchise locations. This expresses the growth and further market penetration that Jersey Mike’s is pursuing.
Jersey Mike’s has seen consistent franchise unit increases over the last three years and their parent company posted over $100 million in net income in 2020.
You can learn more here: https://www.vettedbiz.com/jerseys-mikes-franchise/
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