List and Sell Sandwich Shops — A Sure Winner

List and Sell Sandwich Shops — A Sure Winner

One of the constant sellers in “main street” businesses is the sandwich shop. Sandwich shops have been around forever — most likely starting with the sandwich counters in the now-gone five and dimes of yesterday. Delis go back just as far (and probably further) and they were also known for their sandwiches. But, nothing has put sandwich shops on the map as much as the franchise Subway. It has 36,000+ units just making and selling sandwiches. If we take a look at just the sandwich shop franchises listed below (and not counting the independents or other franchised sandwich shops), we suspect that sandwich shops lead the way in the number of units in the U.S.

We just have to assume that the name Subway began with the fact that they sold submarine sandwiches. The magazine Franchise Times, in their October 2014 issue listed 15 other names for the same sandwich: Hoagie, Sub, Hero, Grinder, Po-boy, Rocket, Torpedo, Dagwood, Italian, Zeppelin, Wedge, Baguette, Tunnel, Gondola, and Gatsby (in Cape Town, So. Africa). Sources: Time and Wikipedia.

(Note: If you are involved, in any way, with franchises, you should subscribe to Franchise Times – an excellent publication. Email them at info@franchisetimes.com or visit them online.)

We grew up in Philadelphia where submarine sandwiches were called Hoagies. In our years in Southern California we called them Grinders. Now during our years here in New England, we call them Subs.

Whatever you may call them, following are some rules of thumb for pricing some of the various sandwich shop franchises and sandwich shops, in general. The information is from the 2015 Business Reference Guide, available from Business Brokerage Press.

Sandwich shops have been and will remain top sellers in the small business marketplace. This includes the independents and the franchises. Just because they are small businesses for the most part, keep in mind the following benefits from a business buyer perspective:

  • They are generally easy to operate.
  • They are generally low in price.
  • Independents are generally just as successful as franchises.
  • They are popular.
  • They are successful for the most part
  • ….and the list goes on.

Sandwich Shops (in general)

  • 40 to 50 percent of annual sales plus inventory
  • 2 times SDE plus inventory
  • 3 times EBIT

Franchise Sandwich Shops

  • Blimpie—45 to 50% of annual sales
  • Lil’ Dino’s—50% of annual sales
  • Quiznos—25 to 30% of annual sales
  • Roly Poly—35% of annual sales
  • Jimmy John’s—60 to 65% of annual sales
  • Jersey Mike’s—50% of annual sales
  • Subway—60 to 65% of annual sales

All above rules of thumb are plus inventory.

Average Rule of Thumb for above franchises is 46% of annual sales plus inventory.

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 sellable than independents.

 
 
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