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Jersey Mike’s Franchise: Revenues, Costs & Profits (2023)

With 2,401 stores in the US alone, Jersey Mike’s is one of the most popular sandwich franchises in the US. But should you start a Jersey Mike’s franchise? With an investment of $784,000 and an Average Unit Volume of $1,113,000 it does look like a profitable franchise.

Indeed, in order to assess whether this sandwich chain is a good investment from a financial standpoint, you must read between the lines in their Franchise Disclosure Document.

Don’t worry, that exactly what we did here. We’re looking at Jersey Mike’s franchises’ financial performance to assess whether this is a profitable business as a franchisee. Let’s dive in!

a financial plan for a franchise
a financial plan for a franchise

About Jersey Mike’s

Headquartered in Manasquan, New Jersey, Jersey Mike’s Subs is an American multinational submarine sandwich chain.

The chain offers made-to-order submarine sandwiches in which meat and cheese is sliced as required. Toppings include shredded lettuce, sliced onions, oregano, tomatoes, salts & spices, and mixture of olive oil and red wine vinegar.

According Jersey Mike’s website, there are 2,401 stores operating in the US and a total of 2,403 stores operating worldwide. Another 260 locations will be opened soon.

Jersey Mike’s franchise: pros and cons

Owning a Jersey Mike’s Subs franchise store comes with some pros and cons. Here is what you must be aware of:

The Pros:

  • Exclusive territory protection: Jersey Mike’s grants its franchisees the right to operate their restaurants in a protected territory. Under the agreement, the franchisor or its affiliates do not establish any other franchise or operate a competing business in the designated area.
  • Pre-opening training and support: The franchisor provides its franchisees with detailed online and classroom training to help them run their franchises successfully. Its initial training consists of 500 hours of on-site training, 40 classroom hours, as well as continuous training and support.
  • Third-party financing: The franchisor offers its franchisees funding through third-party lenders to fund their startup costs, equipment, inventory, and payroll.
  • Marketing support: Jersey Mike’s has solid marketing and advertising strategies to help its franchisees create awareness and improve their sales. Franchisees can leverage national media, digital, and social media marketing campaigns to reach a wider geographical area.
  • Site selection and development: The franchisor provides its franchisees with site selection assistance to identify viable locations in terms of foot traffic. In addition, it helps them with lease negotiations and development.
  • Small franchise footprints: The desired size for the franchise is 1200–1800 square feet, which can fit into most available real estate opportunities, giving franchisees an opportunity to get started quickly.

The Cons:

  • Not a home-based business: The franchise cannot be run from home or a vehicle. Franchisees must have an established office space, retail facility, or warehouse.
  • Not a passive investment: The franchise does not allow for absentee ownership. Franchisees must be actively involved in the day-to-day running of their restaurants.
  • Not a part-time business: The franchisor requires restaurants to be open on a full-time basis.
  • Competition: The franchise faces competition from brands such as Jason’s Deli, Subway, Jimmy Johns, etc.

How much does a Jersey Mike’s franchise cost?

You would need to invest $784,000 on average to become a Jersey Mike’s Subs franchisee.

Yes, this investment amount will vary based on the location, size, or type of restaurant you are willing to open. As per the latest FDD, the investment amount ranges from $214,000 to $1,353,000.

In addition to the initial franchise fee of $18,500, the total investment covers all types of expenses that occur during the opening of a restaurant:

  • Formation costs: real estate and construction fees, rent, leasehold improvements, equipment, furniture, exterior signage, interior branding, licenses and permits, etc.
  • Operating expenses: initial inventory, insurance, training, grand opening advertising, additional funds to cover for the first 3 months of business, etc.
Type of ExpenditureAmount
Initial franchise fee$18,500
Formation costs$163,249 – $1,197,577
Grand opening$12,500
Operating expenses$20,200 – $124,003
Total$214,449 – $1,352,580
Source: Franchise Disclosure Document 2023
a financial plan for a franchise
a financial plan for a franchise

How much can you make with a Jersey Mike’s franchise?

The average Jersey Mike’s Subs franchise makes $1,113,000 in sales per year (the Average Unit Volume).

This amount is the median sales of franchises operated in 2022. As you can see traditional restaurants generate more revenue than the non-traditional restaurants.

Source: Franchise Disclosure Document 2023

How profitable is a Jersey Mike’s franchise?

We estimate that the average Jersey Mike’s franchise makes $161,000 in profits per year. This corresponds to a 15% EBITDA margin.

Note that Jersey Mike’s doesn’t provide any detailed information about the financial performance of its franchises in its latest Franchise Disclosure Document. Instead we had to make assumptions which we have summarized below.

Profit and lossAmount% sales
Sales$1,112,865100%
COGS$(278,216)25%
Gross Profit$834,64875%
Labor$(322,731)29%
Marketing and royalty costs$(127,979)12%
Occupancy$(89,029)8%
Other OpEx$(133,544)12%
EBITDA$161,36515%
Source: Franchise Disclosure Document 2023, Estimates

Is a Jersey Mike’s franchise a good investment?

Even though Jersey Mike’s has a 15% EBITDA margin as per our estimates, it doesn’t tell us much about whether it’s a good investment.

In order to assess that, we need to look at the investment payback period: the time it takes a franchisee to recoup the initial investment.

As per our estimates, Jersey Mike’s has an excellent payback of 5 years. In other words, it takes you on average about 5 years to reimburse your original investment of $784,000: this is a great investment.

Of course, these numbers are based on averages, as we discussed earlier. Your restaurant may have very different numbers instead. For example, your restaurant may have higher sales due to its location, size, etc.

That’s why, in order to form a solid opinion on whether you should invest in a Jersey Mike’s franchise, prepare a financial plan.

a financial plan for a franchise
a financial plan for a franchise

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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