Sandwich Shops

Sandwich Shops

The data below is from the 2012 Business Reference Guide (coming January 2012). Sandwich shops represent a big opportunity for the business broker. If you want to start your business off on the right foot in January, send a letter, postcard, or newsletter to all of the sandwich shops in your area. You should be able to compile a list for mailing, phone calls and perhaps even personal visits. You should be planning this for all of the business types that are perfect for the first time buyer, etc.


Sandwich Shops

SIC 5812-19   .   NAICS 722211   .   Number of Businesses/Units 37,000

Rules of Thumb

  • 40 to 50 percent of annual sales plus inventory
  • 2 times SDE plus inventory
  • 3 times EBIT
  • Note: In averaging the rules of thumb for some of the larger franchised sandwich shops, it turns out that it is just about the same as sandwich shops in general—independent or franchised. However, they seem to be more saleable than independents.

Benchmark Data

Statistics (Sandwich Shops) 
Sandwich Shop Rule of Thumb Est. Annual Sales/Unit
Blimpie’s 45%–50% $185,000
Hungry Howie’s 35% $452,000
Li’l Dino’s 64% N/A
Quiznos 30%–35% $370,000
Roly Poly 35% N/A
Jimmy John’s 65%–70% $1,117,661
Jersey Mike’s 50% N/A
Subway 60%–70% $430,000

 

Start-up Costs Average $145,000 to $317,931
Average Sales Approx. $500,000 year
Average Rule of Thumb 45% of annual sales
Average Price $225,000
Average Profit $100,000

 

Expenses as a percentage of annual sales 
Cost of Goods 28%
Payroll/Labor Costs 22%
Occupancy Costs 10%
Profit (estimated pretax) 20%


Industry Trend

  • “Sandwich chains’ 37,903 units, for example, grew just 1 percent last year versus bakery-café’s 3,643 units and 3.2 percent growth rate, according to Technomic’s Top 500 Chain Restaurant report.’”
  • “A few chains have continued to struggle, leading to what some are calling a ‘shakeout’ in the sandwich segment. Quiznos lost more than 1,000 units. Blimpie, once the second-largest sandwich chain in the country and a Subway rival, has fallen to under 1,000 restaurants nationwide.”
  • “Jimmy John’s is the second-fastest-growing restaurant chain in the country, thanks in large part to its delivery system, combined with humorous radio ads promoting its ‘freaky fast’ speed.”

Source: “Spicing up a Pickle,” Franchise Times, June/July 2011