I pulled together some numbers of required royalty and advertising fees for sandwich franchises:
|Required Royalty and Advertising Fees for Sub & Sandwich Franchises|
|Jerry’s Subs and Pizza||9%|
|Charley’s Grilled Subs||8.25%|
|Hungry Howie’s Pizza and SUbs||8%|
|Great Outdoors Subs||7%|
|Lenny’s Sub Shops||7%|
|Moe’s Italian Sandwiches||7%|
|Pickerman’s Soup & Sandwiches||7%|
|Port of Subs||6.5%|
|Sub Station II||6%|
|Baldinos Giant Jersey Subs||5%|
An 8% difference in the fees for a franchise with $500,000 in sales is $40,000. Many would die to have that extra $40,000 to hire a qualified manager, enabling the franchisee be more of an absetnee owner.
Lower doesn’t necessarily mean better. I would want required pooling of local (maybe regional) funds for collective advertising and promotions.