Subway franchise as a business in Sheffield?

[alko27 10]

Or maybe the Broomhill one?

 

Doing some rough back of the envelope calculation:

 

Say you put down £50k of the £129k.

Say that the £6000 gross per week doesn't change.

Say 90% of that goes to Subway HQ, bank loan interest, staff wages, rent, supplies, what have you.

That leaves you with £600 per week before taxes. So that leaves you earning about £31.2k per year.

 

Considering you put in £50k, earning £30k per year is equal to 60% interest! More than 12 times savings rate of banks....

 

Warning: the above is just a very rough calculation based on pure desktop research.

 

 

That's why there aren't any in the city centre; Rent. Your 31.2k will soon drop unless you really drive the turnover.

Price has gone up, I remember enquiring years ago its was only 90k, Maccies was 250k.

If you offer a delivery service that could be your USP different from the competition. (And you can put your prices up when it snow's)

[corgigasman 10]

Or maybe the Broomhill one?

 

Doing some rough back of the envelope calculation:

 

Say you put down £50k of the £129k.

Say that the £6000 gross per week doesn't change.

Say 90% of that goes to Subway HQ, bank loan interest, staff wages, rent, supplies, what have you.

That leaves you with £600 per week before taxes. So that leaves you earning about £31.2k per year.

 

Considering you put in £50k, earning £30k per year is equal to 60% interest! More than 12 times savings rate of banks....

 

Warning: the above is just a very rough calculation based on pure desktop research.

 

You can not compare it to bank interest......you are working for the £30k and have the responsibility of running a successful business for the £30k...not really the same thing

[corgigasman 10]

I know they were 'rough calculations' but I would want very solid figures when basing a business deal on it. Also the Ad makes it sound like you can 'sit back and relax' whilst turning over £6k a week.....which responsible investor is going to do this? Or someone more 'hands on' may lift the turnover back to the glory days of £12k a week??! If it were that easy then why is someone 'getting out' and why is £12k per week not still been achieved ?? Not having a go just bit of a sceptic when business ventures sound too simplistic.........if I could invest £50k and sit back and 'earn' £30k then I would want a string of the things. Good luck anyway

[anywebsite 10]

I'd be more sceptical/realistic too. There will be a reason the current owners are selling. There are pros & cons to buying an established business vs setting up a new one. Not saying don't do it, but make sure you plan well & prepare for a lot of hard work.

 

There's a much higher risk with any business vs a bank account, as well as the extra work, which explains the higher reward (if things go to plan).

 

I don't like the tone of 'say 90% is costs', it sounds like a guess, what if it isn't? What if it's 95%, or 105%?

Edited December 7, 2010 by anywebsite

[ismangil 10]

Agree whole heartedly that proper due diligence is needed when investing 50k of your money. Putting in a bank is much safer, because we're all (you and me included) guaranteeing to pay me back my 50k whatever happens!

 

The figure 90% costs it's not that guessing, I got it from reading postings of Subway franchisees on business forum that a realistic margin is 12% - 18%. So I cut it down further to 10%.

 

Proper due diligence will start on 13th Dec, where I will get a list of franchisees and talk to them directly.

[ParisLauren 10]

Hi all,

 

What does people generally think about Subway as a sandwich shop? Mulling the idea of getting a franchise.

 

I've heard Subway's student-driven, so does that mean non-students won't go there? I mean if I put it in non-student areas like Banner Cross for example. Personally I (40 yr old!) like Subway. So does my family in general.

 

Note this is not about franchise vs independent, there's quite a lot said about that already!

 

One is needed in the Crystal Peaks area!

I know loads of people who agree with me. The rumours one was opening on Birley Moor Road left people disapointed. Dont like town and dont really go to meadowhall anymore.

[ismangil 10]

One is needed in the Crystal Peaks area!

I know loads of people who agree with me. The rumours one was opening on Birley Moor Road left people disapointed. Dont like town and dont really go to meadowhall anymore.

 

Do you mean Crystal Peaks Shopping Centre/Retail Park? That's a good idea. There's already quite a few food destinations there so I suppose people go there to eat/buy takeaway.

[ParisLauren 10]

Yep I'd say Drakehouse as thats open til 8pm and crystal peaks shuts 5.30pm most days. but it would be good inside crysta peaks too as its a long way to walk up to drakehouse and i dont go up unless ive got the car.

[ismangil 10]

Yep I'd say Drakehouse as thats open til 8pm and crystal peaks shuts 5.30pm most days. but it would be good inside crysta peaks too as its a long way to walk up to drakehouse and i dont go up unless ive got the car.

 

Good news, I heard from the Subway Development Agent for this area there is one currently in preparation to open soon in Crystal Peaks!

[ismangil 10]

As promised here are some notes from a seminar held by the area Development Agent (DA) on 13 Dec 2010. I won't repeat things that are easily found on the website or the brochure.

 

- UK is now third largest after US & Canada.

- There are currently 63 stores owned by 16 franchisees in the Derbyshire, Notts, Lincs, and South Yorks area.

- All the current Sheffield store except Ecclesall is owned by one franchisee - the DA and his business partner.

- New franchisees opening soon for Crystal Peaks and Crookes.

- The main breakdown of running cost: Food 30%, Labour 20%, Subway 8%+4.5% advertising fund. So that's 62.5%. The rest goes to rent, insurance, etc.

- The franchise fee includes two weeks training in USA HQ. Airfares and hotel not included. Need to pass training in order to become franchisee.

- Cambridge training centre will in the future open for franchisee training.

- Ideal store size 800-1200 sq ft.

- Halal stores are possible in predominantly Muslim areas.

- Minimum opening 98 hours per week.

- Monthly inspections to maintain standards.

- Only requires A1 planning use consent (normal retail, not hot food).

- Supplies are bought from EIPC, of which all franchisees are shareholders (not Subway HQ). A co-op, basically.

- The franchisor is also rated A1 from Natwest and HSBC, essential for getting finance.

- Equipment can be Hire Purchased, owned after three years.

- No mandatory re-decoration/investment before 7 years.

- Lease is held by SRL and franchisee sub-lease from them.

- DA will assist in site selection and lease negotiation.

- It is expected that for a first store in the current market rent should be below £20k per year to be viable.

 

That's about it.

[ismangil 10]

Or maybe the Broomhill one?

 

Doing some rough back of the envelope calculation:

 

Say you put down £50k of the £129k.

Say that the £6000 gross per week doesn't change.

Say 90% of that goes to Subway HQ, bank loan interest, staff wages, rent, supplies, what have you.

That leaves you with £600 per week before taxes. So that leaves you earning about £31.2k per year.

 

Considering you put in £50k, earning £30k per year is equal to 60% interest! More than 12 times savings rate of banks....

 

Warning: the above is just a very rough calculation based on pure desktop research.

 

To continue with the Ecclesall Road example:

 

- Based on figures from the area Development agent, 62.5% will go towards food, labour, and Subway fees.

- Based on the figures from the Ecclesall road sales brochure, rent is £26k. So on a turnover of £6k per week, that equates to 8.3%, making a total of 70.8%.

- Another 10% for other costs such as insurance, business rates, waste disposal, etc that means a total of 80.8%

- Round it up to the nearest 5% and we have 85% is costs, leaving a 15% net profit before tax.

 

So on a turnover of £6,000 per week, that means £900 per week.

[cherry24 10]

Despite it not being a studenty area, I always thought that a Subway on Woodseats would do well. Domino's and Gregg's on Chesterfield Road seem to do ok and my friends always say that they would like to see one in the area. The nearest one is the London Road one.