15 Dec 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
