Jersey Mike’s Franchise: Revenues, Costs & Profits (2023)
This article was updated with the 2023 Franchise Disclosure Document
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!
Key stats
| Franchise fee | $18,500 |
| Royalty fee | 6.5% |
| Marketing fee | 5.0% |
| Investment (mid-point) | $784,000 |
| Average sales | $1,113,000 |
| Sales to investment ratio | 1.4x |
| Payback period | 5 years |
| Minimum net worth | $300,000 |
| Minimum liquid capital | $100,000 |
Jersey Mike’s Franchise Business Plan
All the stats: startup costs, profits, breakeven, etc.
5-year financial projections built with the FDD
Excellent 4.8/5 based on 70 reviews
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:
Pros
- The company has a very low franchise fee of $18,500
- Franchisees get support to finance the investment costs, indeed Jersey Mike’s has relationships with 3rd party investors to help franchisees acquire funds
- A franchisee gets exclusive territory protection
- The company offers extensive training and ongoing support to help the franchisees succeed
Cons
- They do not allow absentee ownership, which means you must be overlooking and managing the day-to-day operations. In addition, they don’t allow to run the franchise as a part time business
- They require franchisees to have 10-15 employees minimum, which can increase operational overhead
- They have rather high royalty and marketing fees vs. similar franchises (6.5% + 5%)
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 Expenditure | Amount |
|---|---|
| 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 |
Jersey Mike’s Franchise Business Plan
All the stats: startup costs, profits, breakeven, etc.
5-year financial projections built with the FDD
Excellent 4.8/5 based on 70 reviews
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.
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 loss | Amount | % sales |
|---|---|---|
| Sales | $1,112,865 | 100% |
| COGS | $(278,216) | 25% |
| Gross Profit | $834,648 | 75% |
| Labor | $(322,731) | 29% |
| Marketing and royalty costs | $(127,979) | 12% |
| Occupancy | $(89,029) | 8% |
| Other OpEx | $(133,544) | 12% |
| EBITDA | $161,365 | 15% |
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.
Jersey Mike’s Franchise Business Plan
All the stats: startup costs, profits, breakeven, etc.
5-year financial projections built with the FDD
Excellent 4.8/5 based on 70 reviews
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.
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