Port of Subs Franchise Costs $311K – $528K (+ 2024 Profits)

Port of Subs, a franchise known for its made-fresh-to-order sandwiches, has carved a niche for itself in the quick-service restaurant industry since its inception in 1972. The story of Port of Subs began when two brothers from New Jersey opened a small submarine shop in Sparks, Nevada. The venture took a significant turn in 1975 when John Larsen and his family took full ownership and later rebranded it from the “Sub Shop” to “Port of Subs” through a community-wide naming contest.

Headquartered in Reno, Nevada, Port of Subs emphasizes superior service and high-quality products served in a clean and friendly atmosphere. The brand prides itself on using freshly sliced, top-quality meats and cheeses, fresh-baked breads, and zesty dressings and spices.

This dedication to quality and freshness has not only endeared Port of Subs to its customers but has also garnered recognition, with the franchise being listed among Entrepreneur Magazine’s “Franchise 500” and the International Franchise Association’s top franchising opportunities. Port of Subs began its franchising journey in 1985, responding to the demand for its distinctive taste and superior customer service in other cities.

Type of Expenditure	Amount
Initial Franchise Fee	$25,000
Site Review	$0 – $1,500
Training Fee & Expenses	$7,500 – $9,000
Architectural, Engineer, and Legal Counsel	$12,500 – $19,750
Construction Management	$12,500 – $17,500
Real Estate, Leasehold Improvements, and Construction Costs	$95,000 – $196,600
Signage, Graphics, & Interior Décor Items	$6,500 – $18,375
Furnishings, Fixtures, and Standard Equipment	$96,000 – $145,000
POS and Technology Systems, including Initial Setup	$26,500 – $38,500
Insurance	$1,500 – $2,500
Initial Inventory & Smallwares	$5,000 – $10,000
Grand Opening Marketing	$5,000 – $7,500
Licenses, Fees, and Deposits	$2,500 – $12,000
Additional Funds – Initial 3 Months	$15,000 – $25,000
TOTAL	$310,500 – $528,225

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

When you sign the Franchise Agreement, you are required to pay an initial lump sum franchise fee of $25,000.

Training Fee

Upon signing the Franchise Agreement, a training fee of $5,000 is payable for your Principal Trainees to attend the initial training program.

Grand Opening

You must spend at least $5,000 for your restaurant’s initial grand opening pursuant to a grand opening marketing plan.

Site Review

If a site review is deemed necessary by the franchisor for the proposed location of your restaurant, you must reimburse the franchisor for all costs incurred during the site visit, estimated not to exceed $1,500.

Royalty Fee

A royalty fee of 6% of Gross Sales is due weekly, calculated from the close of each Sales Week.

Brand Development Fund Contribution

A contribution of 1% of monthly Gross Sales is required for the Brand Development Fund, which may be increased up to a maximum of 5% of Gross Sales per year.

Local Advertising

A minimum of 2% of Gross Sales is to be spent on local advertising and promotion.

Technology Fee

A monthly technology fee is applicable, covering access to certain technology systems, services, platforms, and software required by the franchisor, with the current amount being $1,250 per month.

Franchise Pros and cons

The Pros:

• Exclusive territory protection: The franchisor grants its franchisees the right to operate their businesses in a designated area. It does not establish competing channels or grant any other franchises in the protected area.
• Training and grand opening support: The brand offers its franchisees detailed training programs for their management and staff teams. Its initial training of 200 hours on the job and 40 hours of classroom training provides franchisees with restaurant operations, management, and successful grand opening training.
• Real estate and construction: The franchisor has a qualified and experienced real estate team. It helps the franchisees identify a convenient business location, store design, and construction process. Also, franchisees get help with lease negotiations to minimize development and ongoing rent costs.
• Ongoing support: Franchisees benefit from a well-established and ongoing support and mentorship program. The franchisor supports its franchisees through meetings and conventions, safety and security procedures, field operations, a franchisee intranet platform, and data-driven performance analyses to monitor their expenses.
• Multiple income streams: The brand has different options to create excellent customer service. These include take-out, curbside pickup, and delivery options. Franchisees can combine these with dine-in options to add to their income streams and improve their bottom line.

The Cons:

• No absentee ownership: The Port of Subs franchise does not present a passive investment opportunity. The franchisees are required to be actively involved in the day-to-day operations of the restaurants.
• No financing: The franchisor does not offer direct or indirect financing to its franchisees for start-up or ongoing costs.
• Stiff competition: The franchisor faces rivalry from well-established brands such as Subway, Penn Station East Coast Subs and Firehouse Subs.

How to open a Port of Subs franchise

Opening a Port of Subs franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Port of Subs franchise.

1. Research and Due Diligence

• Start by gathering comprehensive information about the Port of Subs franchise, focusing on its history, business model, menu offerings, and company culture.
• Understand the brand’s commitment to quality, community involvement, and customer service to ensure alignment with your personal and business values.

2. Initial Inquiry and Application

• Reach out to the Port of Subs franchising team to express your interest and request more detailed franchise information.
• Complete the initial franchise application form provided by Port of Subs, which typically includes providing personal, financial, and business background information.

3. Attend Discovery Day

• Participate in a Discovery Day event hosted by Port of Subs, which is an opportunity to meet the corporate team, ask questions, and get a firsthand look at the operations and culture of the franchise.
• Use this opportunity to assess whether Port of Subs is the right fit for your business goals and expectations.

4. Review Franchise Disclosure Document (FDD)

• Carefully review the Franchise Disclosure Document (FDD) provided by Port of Subs. The FDD contains crucial information about the franchise system, fees, initial investment, contractual obligations, and performance of existing franchises.
• Consider consulting with a franchise attorney to help understand the legal and financial aspects of the FDD.

5. Secure Financing

• Determine the total investment required to open a Port of Subs franchise, including franchise fees, equipment costs, leasehold improvements, and working capital.
• Explore financing options if necessary. This may involve personal savings, bank loans, or partnerships. Port of Subs may offer guidance on financing options or preferred lenders experienced with their franchisees.

6. Location Selection and Lease Agreement

• Work with the Port of Subs real estate team to identify and secure an optimal location for your franchise, taking into consideration factors like foot traffic, parking, and local competition.
• Negotiate and sign a lease agreement for the chosen location, ensuring that it aligns with your business plan and financial projections.

7. Training and Store Setup

• Complete the comprehensive training program provided by Port of Subs, which covers all aspects of running the franchise, from operations and management to customer service and marketing.
• Follow the guidance provided by Port of Subs for store design, layout, and setup to ensure consistency with brand standards

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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