Jersey Mike’s gets to supply sandwiches across much of the United States with nearly 500 locations.
Founder: Peter Cancro
Founded: 1956, Point Pleasant, New Jersey, United States
Headquarters: Manasquan, New Jersey, United States
Revenue: 100 crores USD (2018)
Number of locations: 1,910 (2020)
Type of business: Privately held company
Jersey Mike’s Wiki
Jersey Mike’s Franchise Systems Inc., doing business as Jersey Mike’s Subs, is an American submarine sandwich chain headquartered in Manasquan, New Jersey. The Jersey Mike’s franchise has 2,034 locations open and many more in development across the United States each week.
- Jersey Mike’s was founded in 1956 and stood out by providing the “submarine sandwich”
- They began franchising in 1987
- The number of units are over 1,500
- Industry type: QSR or quick-service restaurant
- Their headquarters is located in Manasquan, New Jersey
- CEO Peter Cancro bought the chain at age 17
How much will it cost to open a Jersey Mike’s Franchise?
You’ll need an initial investment of $178,523 – $746,342 to open a store. The company also requires $100,000 in liquid capital and a net worth of $300,000 to qualify. Take our franchise quiz to find out if Jersey Mike’s is right for you.
Jersey Mike’s Franchise Financial Requirements and Investment
To open a franchise, you need a liquid capital of $100,000, a net worth of $300,000, and be able to pay the franchise fee of $18,500. Here is a breakdown for your clarity. If you have done your research on other stores, you will know that they sometimes offer programs to lower costs, however, Jersey Mike’s does not offer such programs. Luckily, their franchise fee is more affordable than comparable franchises.
|Fees/ Expenses||Dollar Amount|
|Initial Franchise Fee||$18,500|
|Initial Total Investment||$178,523 to $746,342|
As you probably noticed, the range of the initial total investment is quite extensive. Why is that? Expenses like lease fees, architectural requirements, licenses, insurance and equipment can vary a lot depending on where you want to open.
Jersey Mike’s Franchise Fees
|Fees/ Expenses||Dollar Amount|
|Additional fund for 3 months||~ $15,000|
|Architectural fees||~ $1,100 to $17,892|
|Business licenses and permits||~ $25 to $500|
|Equipment, furniture, and small wares||~ $9,250 to $126,709|
|Grand Opening Advertising||~ $12,500|
|Initial Inventory||~ $2,000 to $26,925|
|Insurance||~ $2,000 to $12,000|
|Interior branding and graphics||~ $2,087 to $31,698|
|Leasehold Improvements||~ $92,529 to $339,567|
|POS System||~ $4,079 to $14,184|
|Professional fees||~ $500 to $15,623|
|Real estate and construction fee||~ $5,000|
|Rent/lease CAM and utility security deposits||~ $0 to $42,009|
|Signage||~ $2,210 to $30,089|
|Training||~ $1,200 to $49,974|
|Uniforms, office equipment and supplies||~ $1,021 to $45,875|
|Initial Total Investment Estimate||$178,523 to $746,342|
Hopefully, this breakdown provides insight into the reasons startup cost can fluctuate so much for this sandwich chain. If you want to save money, find a built-to-suit location to open a Jersey Mike’s. One example is a vacant space in a strip mall. You could build a store from the ground up, but that will cost more. The square footage of the store and location are variable cost factors as well.
As part of the startup cost, you’ll also need to remember the $12,500 fee to help market and promote the grand opening of your store. This money goes directly to the promotion of your store locally.
Besides the initial cost, there are some more fees to think about if you want to be a franchise owner. These numbers are not reflective of the initial cost, but it is important to think about for any future franchise owner. For every franchise, you are going to have a royalty feed, and for most, there will be an advertising / marketing fee.
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A royalty fee is an ongoing fee that you would pay to the franchise for the opportunity to run the business concept. For Jersey Mike’s, that royalty fee is 6.5%.
There’s also a 1% corporate advertising fee and 4% national media fee based on gross receipts. This means every time you sell a sandwich, the corporate entity is taking 5% off the top just for marketing. Companies charge an advertising fee to support their marketing endeavors including television, radio spots, direct mail, and online advertising. There are additional smaller fees such as fees for training, audits, technology services, etc, that you’ll want to pay attention to.
Now that we talked about the financial requirements, fees, and ongoing expenses, let’s move into the fun stuff… the sales and revenue of these stores.
Average Sales/ Revenue per Year
Jersey Mike’s systemwide annual sales are an estimated $1.34 billion. Sales volume has been steadily increasing over the years and the franchise was dubbed the fastest-growing sandwich chain in the United States a couple of years back. Jersey Mike’s experienced a 16% growth between 2010 and 2017. This is a concept that’s been appealing to new investors and experienced franchise owners alike. Especially since it is a smaller company with less than 1,000 store locations and room for expansion.
Average Annual Sales per Unit
The average annual sales per unit is roughly $600,000. Jersey Mike’s is experiencing widespread expansion and are doing it by staying competitive and providing high levels of training to new franchise owners.
Average Franchisee Profit
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The average profit of a Jersey Mike’s Franchisee is $50,000 – $200,000 per year.
It’s hard to calculate the average profit of franchises without considering the many variables that come into play that can skew the average. If you are looking to see how profitable a Jersey Mike’s sub is compared with other stores, this number is not the best measurement of success. There are many reasons one store location might make more money than another.
One could be the location as cities tend to have more traffic (gross revenue), but more cost for the lease is also higher. Compare the profit you are seeking to comparable businesses in your area.
Before we move onto the average profit a franchise owner would make, here are a few key facts that you may come across when conducting your own research about the company.
How Much Profit Does a Jersey Mike’s Franchisee Make Per Year?
A franchise owner can expect to make around $73,000 a year. These numbers look lower when compared to other chains that can bring you in 6 figures a year, but that’s not the full story.
A reported 70% of Jersey Mike’s franchise owners already owned existing franchises. If the goal is to generate a high six-figure salary, you’ll want to expand to multiple Jersey Mike’s locations. One franchise owner in California has opened 20 locations. It’s important to consider what the annual income number you’ll be happy about making before getting started.
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There’s a step-by-step process to become a franchise owner with Jersey Mike’s. First, you would need to complete an online application and take an initial phone screen. Once it is known that you meet the base criteria, you can identify your area of interest. Next, you will review the franchise disclosure documents and complete an initial interview. These all should take about 1 day to 1 week to complete. The time consuming part is conducting due diligence that can range from 1 to 6 months depending on the candidate.
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The last few steps involve a meeting with company executives. First, you will take about a week to complete your in-store training. Then you will have 1 to 3 weeks to set up a meeting with an executive team member. You finally get to enter that franchise agreement and do the trickiest part of the process, securing real estate. Depending on the real estate availability, a typical timeline looks somewhere between 3 to 6 months. In a competitive commercial real estate market the process could take longer.
Once you’ve found a location, necessary construction begins on the site and so does the training. This process will take 3 – 4 months to complete. If you choose to build from the ground up, the process could take even longer.
Once the construction is finished, you’re almost ready to open the store! You’ll take 2 weeks to allow for crew training and for some grassroots marketing. Finally, you’re ready to open up your next franchise.
The thought being your own boss is exciting, but there are some things to consider before deciding if this franchise is right for you. Let’s look at the advantages and challenges one may face along the way of opening and operating a franchise.
How to Apply for Jersey Mike’s Franchisee?
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You can apply for Jersey Mike’s Franchisee online. If you can meet the requirements, feel passionate about the sandwich food industry, and love to learn everyday this franchise could be the right fit for you. You can learn more about Jersey Mike’s ideal operator here.
Call at 732-292-8272
If you want to open a Jersey Mikes in a college town, compare it to other Jersey Mikes from other college towns of a similar size. It’s also important to take into account the cost of the land in the area you want to start your franchise. In some states, the cost may be higher simply because the cost of land is more expensive.
Advantages of Jersey Mike’s Franchise
Jersey Mike’s website is quite extensive with its information and application process. The visibility of the company is one thing to admire as you can find the most suitable information on their website. They provide in great detail what they expect and their motto. For example, Jersey Mike’s highly stresses the training process of their future owners and managers. This means that even if you are a beginner and do not know much about opening and managing a store, Jersey Mike’s will provide adequate training to you and your staff.
Jersey Mikes’ is a relatively small quick service restaurant when compared to other stores, but they are a fast-growing chain with lots of talent. They are not a common household name like McDonald’s yet, but their smaller popularity can also have its advantages.
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For starters, they probably won’t have to compete much with other Jersey Mike’s chains since they are still up and coming. The chain you open may just very well be the new, main sandwich joint in the neighborhood.
On top of that, they are one of the fastest-growing sandwich shops. This franchise is one reason competitors like Subway units have declined in recent years. With a smaller chain, there is more room for growth.
The last advantage we want to talk about is their training program. They care for their workers’ experience and want to deliver their best to the customer. After all, they are still growing. You can expect their training program to prepare you and get you ready for your first day. If you’ve ever stepped into a Jersey Mike’s sandwich shop you can tell the staff has been trained better than other stores from a customer service standpoint.
Challenges of Jersey Mike’s Franchise
Of course with all other franchises, there are specific challenges that a certain store can bring you. The first is the popularity of the franchise. Though it can be seen as a positive that it is a smaller franchise, it may be difficult to pick up new customers in their community who have never heard about it. Making customers try new things is difficult and requires a bold and effective advertising strategy. You may also need to spend more on advertising, whereas if you were to open a McDonald’s or other popular chain, people may already be loyal customers.
Another limitation is their lack of programs for minorities and veterans. If you’re a veteran, for example, you can find other franchises that offer discounts and certain benefits, but Jersey Mike’s does not offer such programs. Since they are a smaller company, they have fewer resources such as lending programs or special benefits. The upside is that they have a relatively cheap franchise fee and a diverse set of franchise owners. They are still, however, lacking in the accessibility and incentives department.
Another risk you should be aware of before joining the team. In the event you go into default (can’t pay your obligations to Jersey Mike’s), you’ll be required to pay $75 per hour plus expenses to for the company to manage the store on your behalf. There are also late fees for not paying royalty’s on time and you might even need to pay the cost of an audit if corporate decides to review your books.
Is the Jersey Mike’s Franchise Right for You?
Here are a few characteristics you should possess if you wish to open this franchise.
You must be community-focused. Jersey Mike’s takes time to foster a positive community as CEO Peter Cancro found the importance in doing so when expanding.
Jersey Mike’s training is 3 times longer than most other franchise systems. You need to be enthusiastic and ready to learn. They believe that well-trained owners, management, and workers operate stores more effectively.
Be passionate about customer service and be prepared to work in a fast-paced environment.