Firehouse Subs Franchise in 2024: Costs, Fee & FDD
With over 1,200 locations, a strong community focus, and a comprehensive support system, Firehouse stands out in the quick-service restaurant sector. Dive into our detailed analysis to discover why this franchise could be your next big investment opportunity. Read the full post for insights on costs, earnings, and more!
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Firehouse Subs was founded in 1994 by former firefighters Chris and Robin Sorensen in Jacksonville, Florida. With their background in public safety, the brothers infused the brand with a unique firehouse theme, which sets it apart in the competitive quick-service restaurant industry. The franchise has grown steadily, earning a reputation for hearty, flavorful subs and a strong community focus, particularly in support of first responders through their Firehouse Subs Public Safety Foundation.
Firehouse Subs specializes in hot subs made with premium meats and cheeses, steamed to perfection, and served on a toasted roll. Their signature offerings include the Hook & Ladder, Firehouse Meatball, and New York Steamer. They also offer salads, sides, and catering services. The core customer base includes families, working professionals, and sandwich enthusiasts seeking a robust, flavorful meal. Their market spans across urban and suburban areas, appealing to those who appreciate quality ingredients and generous portions.
As of recent data, Firehouse Subs operates over 1,200 locations across 46 states in the U.S., Puerto Rico, Canada, and other international markets. The franchise serves millions of customers annually, providing a significant daily customer base that benefits from its extensive menu options and quick service. The brand’s expansion strategy has been robust, capitalizing on the growing demand for quality, convenient dining experiences.
Firehouse Subs offers a comprehensive support system for its franchisees, including initial and ongoing training programs, marketing support, and operational assistance. Franchisees undergo a rigorous training process that covers everything from daily operations to customer service excellence. Additionally, the brand provides continued support through regional business consultants, ensuring that franchisees have the resources and guidance needed to succeed. The franchise also emphasizes community involvement, encouraging franchisees to engage with and support local public safety organizations.
Firehouse Subs Franchise Insights
- Rapid Expansion: Firehouse Subs has seen impressive growth with over 1,200 locations across 46 states and several international markets, showcasing a strong and expanding brand presence.
- High Median Sales: With a median gross sales of approximately $700,000, Firehouse Subs offers a lucrative opportunity in the quick-service restaurant sandwich sector, reflecting its strong market demand and customer base.
- Strong Support System: Franchisees benefit from comprehensive training, ongoing operational support, and marketing assistance, ensuring they have the resources needed to succeed.
Firehouse Subs Franchise Key Indicators
Growth YOY (%)
2%
vs industry 0%
3-year Growth (%)
5%
vs industry 3%
Total U.S. Franchised Units
1,170
3-year Failure Rate
7%
vs industry 11%
How Much Does it Cost to Open a Firehouse Subs Franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Firehouse Subs franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Firehouse Subs franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Firehouse Subs below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Background Check Fee | $0 | $500 |
| Initial Franchise Fee | $20,000 | $20,000 |
| Mural | $3,500 | $5,000 |
| Training | $9,000 | $22,000 |
| Opening Advertising | $5,000 | $5,000 |
| Real Property Improvements | $2,000 | $20,000 |
| Leasehold Improvements | $300,000 | $800,000 |
| Deposits and Prepaid Expenses | $1,500 | $15,000 |
| Signs | $10,000 | $40,000 |
| Equipment and Fixtures | $127,000 | $275,000 |
| Opening Inventory | $6,000 | $15,000 |
| Business Licenses | $750 | $7,500 |
| Insurance | $795 | $5,500 |
| MIS System Fee | $1,200 | $1,200 |
| Accounting and Professional Fees | $500 | $2,500 |
| Additional Funds (Working Capital – 3 months) | $10,000 | $110,000 |
| Total | $497,245 | $1,344,200 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Firehouse Subs franchise, the required capital involves both the initial investment costs and a net worth requirement set by Firehouse Subs. Let’s take a closer look below:
- Initial Investment As shown above, the total estimated initial investment ranges from $497K to $1.34M. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating expenses.
- Liquid Assets and Net Worth Requirement Franchisees are usually expected to have at least $100,000 in liquid assets and a net worth of around $300,000. These figures are estimates based on industry standards and Firehouse Subs’ typical financial requirements for franchisees. For the most accurate and up-to-date information, it’s advisable to contact Firehouse Subs directly or consult their official franchise documentation.
How Much Does a Firehouse Subs Franchise Owner Make?
Calculating the salary of a Firehouse Subs franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Firehouse Subs franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Firehouse Subs Revenue & Gross Sales
In 2023, Firehouse Subs franchises achieved a median gross sales of $932,000, reflecting the brand’s strong market presence and customer base. Note that this is the figure for traditional stores as stores with drive-thru tend to have higher sales yet have a much higher investment. This solid financial performance indicates the potential for significant earnings for franchise owners. The brand’s commitment to quality and community involvement helps maintain a loyal customer base, supporting steady revenue growth.
Key Factors Impacting Revenue
Several factors impact the average revenue performance of Firehouse Subs franchisees:
- Location: High-traffic areas and visibility contribute to higher sales volumes.
- Operational Efficiency: Effective management and efficient operations can enhance profitability.
- Marketing and Community Engagement: Strong local marketing efforts and community involvement drive customer loyalty and repeat business.
- Economic Factors: Inflation and changes in consumer spending habits can influence revenue.
Firehouse Subs Franchise Operational Costs
Operational costs for a franchise like Firehouse Subs are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the business’s functionality and ensuring smooth operations. For a Firehouse Subs franchise, operational costs include:
- Real Estate Leasing or purchasing a suitable location, along with property taxes.
- Equipment Purchasing kitchen equipment, furniture, and fixtures.
- Inventory Initial and ongoing costs for ingredients and packaging materials.
- Labor Wages for employees, including kitchen staff and customer service personnel.
- Utilities Costs for electricity, water, and other utilities.
- Marketing Local advertising and marketing expenses.
- Insurance Coverage for the business, including liability and property insurance.
- Technology Point-of-sale systems and other necessary technology infrastructure.
- Miscellaneous Expenses Additional costs such as licenses, permits, and professional services (e.g., accounting).
Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Firehouse Subs franchise.
Firehouse Subs Franchise Fees
Owning a Firehouse Subs franchise is different from owning an independent, non-franchised business. All franchises tend to charge ongoing fees that franchisees are required to pay to operate. Firehouse Subs requires their franchisees to pay the below fees:
- Royalty Fee This is a monthly fee paid to Firehouse Subs, typically calculated as a percentage of gross sales. For Firehouse Subs, this fee is usually 6% of a location’s monthly gross sales.
- Advertising and Marketing Fees Franchisees are required to contribute to both national and local advertising funds. The national advertising contribution is 3% of gross sales.
- Additional Fees There are additional fees for training programs, technology, and other items provided by Firehouse Subs that may be applied.
These ongoing fees are essential to consider when planning the financial aspects of owning and operating a Firehouse Subs franchise. They cover the costs of brand support, advertising, and ongoing operational assistance provided by Firehouse Subs.
Firehouse Subs Franchise Earnings
The earnings of a Firehouse Subs franchise owner can vary significantly based on a variety of factors including location, sales volume, operational efficiency, and cost management. However, on average, Firehouse Subs franchise owners can expect to earn a significant income.
Firehouse Subs franchisees have a median gross sales of $932,000. Based on this, we can estimate a Firehouse Subs franchisee makes around $140,000 in estimated earnings (EBITDA) per year, assuming that the franchisee is an owner-operator in the location. This means that you can consider the salary of a Firehouse Subs franchise owner to be roughly $140,000 before interest, taxes, depreciation, and amortization (EBITDA).
If the franchisee is a semi-absentee, then earnings will be significantly lower based on the costs of having a hired manager.
How to Open a Firehouse Subs Franchise?
1. Initial Inquiry and Research
a. Contact Franchise: You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the Firehouse Subs franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
2. Application and Pre-Qualification
a. Submit Application: Complete and submit the franchise application form. This includes providing detailed personal, financial, and business information.
b. Pre-Qualification Review: Firehouse Subs will review your application to assess your financial qualifications, business experience, and overall suitability as a franchisee.
3. Franchise Disclosure Document (FDD) Review
a. Receive FDD: Once pre-qualified, you’ll receive the Franchise Disclosure Document, which outlines the franchise’s terms, costs, and obligations.
b. Review and Consultation: Carefully review the FDD and consult with a franchise attorney or financial advisor to ensure you fully understand the terms and conditions.
4. Discovery Day and Interviews
a. Attend Discovery Day: Visit the Firehouse Subs headquarters to meet the franchise team, tour a corporate location, and gain deeper insights into the business operations and culture.
b. Interview Process: Engage in interviews with the franchise team to discuss your business plan, goals, and how you align with the Firehouse Subs brand.
5. Franchise Agreement and Financing
a. Sign Franchise Agreement: If approved, you’ll sign the franchise agreement, which formalizes your commitment and outlines the legal and financial terms.
b. Secure Financing: Arrange the necessary financing for the initial investment, which may involve working with lenders or investors to meet the capital requirements.
6. Site Selection and Training
a. Site Selection: Work with Firehouse Subs’ real estate team to select a suitable location for your franchise. This includes site analysis, lease negotiations, and store design.
b. Training Program: Attend the comprehensive training program provided by Firehouse Subs, covering everything from operations and management to marketing and customer service.
7. Build-Out and Preparation
a. Store Build-Out: Oversee the construction or renovation of your franchise location, ensuring it meets Firehouse Subs’ specifications and brand standards.
b. Pre-Opening Preparation: Order equipment, inventory, and supplies, and prepare for the grand opening by hiring and training staff.
8. Grand Opening and Operations
a. Grand Opening: Launch your Firehouse Subs franchise with a grand opening event, supported by marketing efforts and promotional activities to attract customers.
b. Ongoing Operations: Begin daily operations with ongoing support from Firehouse Subs, including marketing, operational assistance, and access to the franchise network.
Pros & Cons
Pros
Established Brand: Firehouse Subs has a well-recognized brand with over 1,200 locations, which provides a strong market presence and customer trust. This brand recognition can lead to a higher likelihood of initial success.
Strong Support System: Franchisees benefit from comprehensive training, ongoing operational support, marketing assistance, and a proven business model. This robust support system helps new franchisees navigate the challenges of running a business.
Relatively Affordable Entry: The initial investment range of $497K to $1.34M is competitive compared to other franchises, making it a relatively accessible option for potential franchisees.
Cons
Initial Investment Costs: While relatively affordable, the initial investment can still be significant, particularly for those with limited capital. Costs include franchise fees, real estate, equipment, and other startup expenses.
Ongoing Fees: Franchisees are required to pay ongoing royalty fees (typically 6% of gross sales) and contribute to national and local marketing funds (around 3% of gross sales). These fees can impact profitability.
Market Saturation Risks: Rapid expansion may lead to market saturation in some areas, potentially affecting individual store performance and profitability due to increased competition.
Economic Sensitivity: Like all quick-service restaurants, Firehouse Subs is subject to economic fluctuations, such as inflation and changing consumer spending habits, which can impact sales and profitability.
Operational Demands: Running a Firehouse Subs franchise requires active involvement in daily operations, including staff management, inventory control, and customer service. This can be demanding and may require significant time and effort.
