Erbert & Gerbert’s Franchise Costs $223K (+ 2023 AUV & Profits)

With 72 restaurants in the US today, Erbert & Gergert might not be the largest sandwich franchise yet it may very well be one of the most profitable. So if you’re looking for a sandwich franchise to buy, you should seriously consider Erbert & Gergert.

Indeed, with an initial investment of $223,000 on average yet a $612,000 turnover per year, Erbert & Gergert does seem like a great franchise investment.

In this article we are looking at Erbert & Gerbert and its Franchise Disclosure Document to find out how much it (really) costs and how much money you can realistically make as a franchisee. Let’s find out!

Key stats

Franchise fee$30,000
Royalty fee6.0%
Marketing fee4.5%
Investment (mid-point)$223,000
Average sales$612,000
Sales to investment ratio3.0x
Payback period[franchise_value_investment_payback]
Minimum net worth$300,000
Minimum liquid capital$80,000
Source: Franchise Disclosure Document 2022

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About Erbert & Gerbert’s

Erbert & Gerbert’s is a sandwich restaurant franchise headquartered in Eau Claire, Wisconsin. It offers submarine sandwiches, wraps, salads and soups with signature flavor profiles.

Erbert & Gerbert’s was founded in 1988 by Kevin Schippers and his wife Beth in Eau Claire, Wisconsin. Kevin named his shop, Erbert & Gerbert’s, after a series of bedtime stories, “The Adventures of Erbert & Gerbert Herbert” that his father told them when they were children. In addition, he gave the sandwiches on the menu the names of characters in the stories as a tribute to his family, father and those stories.

The chain has recorded great growth, opening more locations and in 2021 it announced double-digit growth through a refocused menu, new branding and shop design, store expansion and additional operational and technical leadership. Erbert & Gerbert’s franchising journey began in 1992 and currently has 75 locations in total, with 72 being franchised in the US.

How much do you need to invest?

On average, you may need to invest around $223,000 to open a Erbert & Gerbert’s franchise. 

Startup costs

Here’s the full breakdown of costs:

Type of ExpenditureLowHigh
Initial Franchise Fee$30,000$30,000
Formation Costs$133,820$376,770
Initial Marketing$10,000$10,000
Operating Costs$20,000$43,500
Total$193,820$460,270
Source: Franchise Disclosure Document 2022

What is the Erbert & Gerbert’s franchise fee?

The initial franchise fee for a Erbert & Gerbert’s franchise is $30,000

In addition to the initial franchise fee, you must pay to the franchisor a royalty fee of 6.0% of revenues, as well as a variable marketing fee of 4.5% of revenues.

What is the AUV of a Erbert & Gerbert’s franchise?

On average, a Erbert & Gerbert’s franchise generates $612,000 in revenue per year.

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Erbert & Gerbert’s franchise profits

We estimate that the average Erbert & Gerbert’s franchise generates $66,000 profits per year (that’s a 11% EBITDA margin).

Note that, luckily, Erbert & Gerbert’s provides detailed cost and profit information in its latest FDD such as COGS, labor costs and rent, which we are summarizing below to estimate EBITDA.

Profit and lossAmount% Sales
Sales$612,384100%
COGS$(170,059)28%
Gross Profit$442,32572%
Labor$(183,715)30%
Marketing and royalty costs$(64,300)11%
Occupancy$(55,115)9%
Other OpEx$(73,486)12%
EBITDA$65,70911%
Source: Franchise Disclosure Document 2022, estimates

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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