Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-212-3423.
As a follow up to our previous article regarding Quiznos and the importance of legal representation, the QuiznosSucks.com owner posted his (claimed) financial results from owning a Quiznos franchise:
Topic: How much a Quiznos earns
Posted by: XXXXXXX
Date/Time: in 2005I am a Quiznos franchisee. Here is a breakdown of how much a franchisee can potentially earn — or not earn.
The figures are not necessarily BAD, I guess I just wish someone gave me these hard figured BEFORE I bought one.
If a store earns $40,000 / month: 7% Royalty $ 2,800 1% Local Advertising $ 400 3% national advertising $ 1,200 20% Labor $ 8,000 29% Food $ 11,600 3% Paper $ 1,200 .3% Accounting/Payroll $ 300 10% Rent/CAM $ 4,000 2.75% Insurance / Misc. $ 1,100 5% repay SBA loan $ 2,000 4.5% misc bills (utilities, etc) $ 1,800 .5% Spoilage $ 200 1% Supplies $ 400 1% Promo Food $ 400 1% Comp Food $ 400 2.9% Credit Card Fee $ 1,160 .4% Coupons $ 160 .5% Food Waste $ 200 No one has any control over %. They are fixed and that is that. So if a store is lucky enough to earn $480,000 annual, the owner can expect to walk away with a profit of
9.4% = $45,120[edit by Ryan Knoll: I believe this should be 7.15% = $34,320 based on the numbers provided]. No one is going get rich off of that. Of course if an owner can get cheaper rent, and increase sales, it will be of great benefit.The average store seems to be about 1,500 – 1800 sq ft. and the going rate is $17.50 – $30.00 sq ft + $5.50 – $8.00 CAM.
That looks reasonable to me and should be considered by anyone buying an existing or new franchise. People often forget the expense of promos and coupons, credit card fees, insurance, and payroll expenses. The pretty picture the franchise sales rep paints for you often is the “best case” scenario.
Well, you might think, “That’s a 18% return on my investment of $250,000! I’ll take it!”. That’s not an accurate reflection of your actual return. Those results assume you are working at the franchise full-time and do not include your or your manager’s salary. So, if you think your year’s effort is fairly compensated at $45,000, then your real return on your investment is ZERO (actually it’s negative because you could be making 4-5% in bonds).
Similar Posts:
- Update to “What a Quiznos Franchisee Makes”
- More Quiznos Franchisees Can’t Turn A Profit
- Cash Discount for Customers
- Paychecks via Debit Cards
- Quiznos Sales & Profitablity – Summary Report
I don’t get how you guys are selling at least 5-6k a week and not making any money. I own a Frozen Yogurt Shop. My biggest selling month was 12k FOR THE MONTH in July. I’ve had 1 month where I sold only 2k and some 4k in the dead of winter yet I am making a profit and no where near going out of business. If I sold even 3-4k a week for the year, I would be swimming in moolah; you guys make me wonder.
the reason you dont make money with quiznos is because the corporation is very gready and there food prices is very high not allowing the franchaisee to survive …
Not even executives feel good about working at corporate Quiznos. Look at the revolving door that goes right to the top of this corrupt company, including changing the CEO FIVE times in just two years……Not a stable operation at all. Steve Schaffer booted out for Wonder Guru Greg Brennerman, who spent all his time battling lawsuits and class actions before he runs away to rebuild his reputation elsewhere. Then lowly Dave Demo is the next lamb offered up for slaughter..a mere few months later his charade is up. Now its come full circle, the original Con Man Rick Schaden is back at the helm…offering up his own damage control “” loves his hands on involvement” to any PR media that will listen to his Bull shit.
All the while, he’s just buying time to find a new leader. A few months later Ricky must have been desperate to leave his own position, put all the while there isn’t any highly toted CEO in America that would take on this train wreck. So where does Ricky look next? Canada. And brings down Greg McDonald, the corrupt Canadian equilivent and Yes man of Ricky himself. How sad. More crooked leadership to look forward too. He’s the same guy in the middle of the Canadian Class action who said to the franchisees after loosing the last round in court…..we’ll just stretch this out for years…… Nice touch from the New Leadership. Think he’s got the franchisees interests at heart??? Same old Same old. This company will go bust eventually, but only after the top dogs have squeezed out every last penny out for themselves.
A friend of mine owns a strip center ( in Florida) and currently there is a Quiznos in the center that closed 6 months ago.
The traffic count is over 90000 on this road and there is a Blockbuster in the strip but not a very vibrating store.
My friend claims that the store did $1800 daily and went down to $300.
The owner is a Doctor and it is said that he did not manage it right due to time restrains.
I believed the story until I found posts like yours.
The landlord wants $15000 to turn in the key and all equipments are fully in place.
The space is 2200 sf and the rent is $25 including cams.
I called the rep and he said they want half of the franchise fees and I will have to send in an app before they talk any further.
I am thinking to tell the rep that I am taking over the store to operate a sub shop under XYZ name. I will only consider Quiznoz if they cut me some slacks, for example on some of the fees for at least one year and no personal guarantee both for franchise and the lease. I also would want to get their guarantee not to open anything within certain distance. I think these points should not be negotiable on my part, although it is almost impossible to get them to agree.
I would appreciate if anyone could give me some advice.
Considering the low costs to start, what are my risks?
Thanks
Dude, if you’re not getting it by now, you’ve got bigger problems. Run away, R U N A W A Y from the evil doer Quiznos. Neither party (Quiznos / landlord) will cute you slack on the personal guarantee. That is how they hold you to the fire. And it will be a fire. It will be hell on earth. Quiznos to is parasite. They will latch on to whomever and suck you dry. When you are dead, they simply move on to the next victim and suck them dry (ie. take all your money). It is a evil, EVIL empire. There are no words in the English language to properly convey how evil the Quiznos organization operates their business model.
my friend i own a quiznos in miami and i am telling you do not buy a quiznos franchise…they are very greedy and would not cut any deal with you…invest in something better than quiznos…i am hearing rumors of bankrupcy…we are all crossing our fingers good luck
Hi, I’m thinking of doing a co-brand concept in NJ that includes a blimpie and potentially a water ice or ice cream (preferably Ben & Jerry’s). I know this is a Q website but the figures look very similar to the numbers posted above. My investment would be somewhere near 175K because I’m not buyign anything new and I’ve bargained the heck out of everything. My rent will be 40K / year (3333 / mos) and I’m thinking with the co-brand, my expenses would be divided and, thus, less than a single concept enterprise. I am still concerned with all the stuff you hear and read and so I wanted to get ppls thoughts.
Chad
Your numbers make no sense. You state your biggest month was $12k in sales but later state “If I sold even 3-4k a week for the year, I would be swimming in moolah; you guys make me wonder.” $3-$4K per week is well over $12k per month on the lower end. If your going to “brag” about rolling in moolah, provide some numbers or better yet, look for somewhere to post your BS. Comparing a sandwich shop to an ice shop is comparing apples to oranges.
Hi I own a quiznos in california. I want to sell it cos I am going to grad school. very nice location. close to the 210 freeway. next to walmart. sale is about 4k a month. If you are efficient aad can manage full time, you can expect about 3k net profit per month. The asking price is only 35k. If you are interested in pls email me at youngkokonut@hotmail.com thanks
Tom wrote on November 6, 2009 @ 2:47 pm:
Sure they make sense, as I stated my biggest month was 12k. After reading through these posts, It seems as though Quiznos owners sell 5,6,7k+ a week, yet are cannot make a dime.
I’m not sure where my numbers do not make sense. Obviously if my biggest month is 12k and I stated IF, emphasis on IF I sold 3-4k a week which is less then half of most Quiznos, I’D be swimming in moolah. I am not saying I am making the big bucks but I am not close to losing my shirt. I just don’t get how you can sell 300k-400k+ a year and not make a dime while in my first year of business, I’m barely hitting 100k a year and still have cash flow.
Chad
Strictly looking at food costs selling yogurt is WAY more profitable than selling sandwiches. For example you sell 1 cone of yogurt for $2.00. Your food cost is what, 0.18cents? That leaves you $1.81 cents for everything else – paper, employees, utilities whatever. I own a Quiznos. We have a 2 for $5 promotion (2 items for $5). Already with this promotion there is heavy discounting and my food costs are 37% on average BEFORE the discount so I’m left with $3.15 right? WRONG because Quiznos has sent out coupons that say 50% of 2 for $5 special – so now what does that leave me with? 0.65cents. If you think it ends there you are WRONG!!! Then there are the people who come in with the Quiznos corporate coupon that says “Get a FREE 2 for $5.00″. FREE!!!!!!!!!!!!!!!!!!!!!!! Are you friggin kidding me???!!! Is Quiznos covering the FREE food we are giving away? NO And to top it off, they didn’t give me my food rebate this quarter!!! This doesn’t include all the other coupons that are out there. If I don’t take the coupon the customer leaves my store and tells all their friends that I suck. I have increase foot traffic but how many sandwiches do I have to sell to make the same profit as 1 yogurt. Oh yeah, and because I have increased foot traffic I have to have more employees so my labor goes up too. Who benefits from inreased food costs? QUIZNOS.
I’ve had my store for 4years. I am in a decent location so I should be able to hold-on but Quiznos puts up all these obstacles. I don’t know how others are still able to make it who are not in better positions. I pray Quiznos goes bankrupt and I’m let out of my agreement.
Has anyone been successful in getting out of their franchise agreement? (without selling or going bankrupt) If so please let me know who your lawyer is! I really want to stay in my location but have my own concept.
BTW, Quiznos sucks so bad that their new tactic to get new franchisees is to get them to sign on for re-opens. They are vultures!!!!!!!!!!!!!!! Also, the franchise fee is now $12,500
Chad,
You must not be reading the posts from all the other owners. Again ice cream is not sandwiches. On an average week, I would do $8000. Food was running 30% and Labor was 18-20%. Paper cast was 3-5% and royalties were 11%. Discount percentage was 6%-10% Right there, 65%-70% of revenue is gone. Don’t forget about rent, electric, gas, accountant fees, advertising not covered by royalties pest control, and maint just to name a few cost. Not much left at the end of the day.
i own a quiznos and really sucks…
I am a classic entrepreneur, involved in numerous businesses throughout my life, some ventures have been better than others, many have been quite successful. I bought into two Quiznos stores 7 years ago and can honestly say they have turned out to be far and away the worst buiness mistakes of my entire life. I sold out this year after giving them away – and I mean giving them away – and was never happier to walk from
$ 450,000.00 of lost investment. I’m fortunate enough to have other income to off set the Quiznos fiasco. I can’t believe how a good product can be bastardized so much by corrupt management practices, evident in the mountain of ongoing litigation and class action lawsuits. Irregardless of the decreasing up front franchise fees and start up costs ( a red flag by itself) any new buyer will still be subject to a on-going system of deception. Nobody who has the opportunity to read this blog should ever consider being enticed by Quiznos – at any price. Spend your time and money elsewhere.
So your telling me after the 65-70% paid, your left with around 10k to pay rent, etc. So rent is 3k. You got 7k left for everything else. Not too shabby in my books.
Tom wrote on November 21, 2009 @ 5:00 pm:
Chad..
OK, you have $7000 left to pay electric, gas, SBA payments, etc you would be left with $2000-$3000 per month or a 6%-9% return and I was a GOOD store. It sounds like you have it all figured out that you can make a ton of money and everyone else on this site is a jacka$$. There are a lot of jacka$$ owners out there but there are also a lot of good ones that have been taken. From your retorts, I assume you work for corporate and defend Q at all cost. You seem to be so convinced that owning a Q is a profitable venture. I was in your shoes several years ago. I bought one and learn more in those 2 years than I did my 4 years in college. I also learned corporate America isn’t such a bad gig. Why take all the risk for a lot less money. Go to your local Q and offer to buy their store. Owning a Q has driven many people to bankruptcy and one know owner to suicide. Buy a store or two, sink everything you have into it and tell us how good you are doing in a year. Until you have been through the process, don’t be such an arrogant cock$ucker and think you know more than any owner on this form.
I have been involved with a few burger franchises. I must be honest I know very little about Quiznos except I don’t like their sandwiches and I have heard they have had legal trouble because franchisees are having their territories infringed upon. I recently got into a fitness franchise called illuminate gym that I am very happy with. The business model may not produce as much gross capital but the bottom line is much larger than any food franchise I have ever seen. There are undoubtedly a few rare scenarios where people make a lot of money with a single location when dealing in food. However, the initial investment is always hard to catch up with. The other issue I had owning my own burger franchise was theft which isn’t really covered in the table above. When opening a business you always have to consider who will be representing and running your business. A lot of my food loss was due to people stealing from me. Today I own a business with a skilled and educated staff in the field they now work. It has been a breath of fresh air. If you want to check out illuminate gym you can see it at http://www.illuminategym.com/franchises.php. Thanks.
Are Quiznos franchises usually profitable if you acquire the franchise at resale for basically nothing (less than $10,000)? I’ve heard people giving away Quiznos. If my cost basis is 0, are these still losers?
So I have been mass emailed about franchise opportunities with Quizos starting at 12,500$.
I thought, wow that is really low. What is the problem?
They are calling it: “re-franchising”
What does that mean and what happened to the current owners?
Sounds like they have some serious, company- franchiser relations.
Answer: the past owners went out of business, which should serve as a blaring red flag to you.
Answer: there have been and continue to be a large number of lawsuits re franchisor/franchisee relations
Why not purchase from a reputable franchisor? Do your homework.
I’ve seen a lot of post saying, “Is buying a store for $xxxxx a good deal?” or many other questions about buying a location. If you’ve read through all the post, why would you want to buy. I paid about $250,000 to open my store. I got $50,000 from the landlord to finish out, $150,000 from an SBA loan and the rest from me. I sold my sold for $180,000 and considered myself lucky. I probably broke even once you consider the money I took out of the business but overall I worked for 2 years for free. If the current owner handed me the keys today for FREE, I would not take it. It’s not worth the time and hassle. The bad stores out weigh the good by 10 to 1, at least. Take a look at a lot of the owners and you wll see the only screening Q really does is the money test. If you got enough for the initial fee, you’re in. Most people who own store are disgruntled people from the Middle East or India who are cheap to begin with. Their idea of making money is to skim on products and hire cheap employees who have bad attitudes. It ruins the overall experience. I won’t go to my local stores because both of them are run by cheap foriegners who skim and have bad service.
DON’T DO IT
Those mailing you recieve in the mail for a Quiznos oppurtunity are bull$hit. Dont be stupid people. Please. Do your reserarch and stop listening to Quiznos corporate. Of course they want to sell you a franchise and make money and earn royalties every week, but do your own research and have a god damn brain. Stay away from Quiznos, no matter how dirt cheap they offer you a franchise.
I am white and speak english. And corporate doesn’t care about any of us.
The BS own your own business in 90 days with as little as 12,500 down.
Is a rip off. They have put hundreds of owners out of business and into bk.
They will take your 12,500 and in house finance 50,000 for the business.
When it cossts them zero. They are stepping in and stealing the closed stores equipment for a penny on the dollar. If they change there ways of doing business the stores won’t have to close. But bad economy road construction and low cutomer base you have no choice. You will struggle to keep food costs at thirty percent because of the most complicated menu in all the qsr’s you have to purchase to many items at no profit. You can go to Restaurant Depot and save 50 percent on some items. But don’t get caught!
These people will get theirs some day. A store closes near your home the owner is upset his friends and family and there friends and fanily all quit going to Quiznos to eat. It just gets worse and worse. Buy a Subway the number one franchise in the world. They must know how to run this franchise.
am about to buy quiznos(reopen)advice
Dont DO IT!!!!
I have owned a store in Tx for 4 yrs, actually got online to place ad of store for sale. I now feel that that is pretty hopeless and will probably have to close soon. The last 4 yrs have been absolutely horrifying and I can not wait until the day I can walk away from it. My own area director had to close her store. Does anyone know if there is any new info on litigation against Quiznos?