Many people think of franchises as individually owned, mom-and-pop run businesses. On the contrary, many large corporate style operators with access to large quatities of capital have been in the business for a while. For example, I’ve heard a lot of about Lenny’s Sub Shop lately but haven’t been in one. The company started in 2001 and now has 63 franchises in the southeastern United States.

A few months ago we reported that Lenny’s signed a deal to open 125 Lenny’s Sub Shops in South Florida. Now the company is working on 80 franchise restaurantsin Texas. The 80 new stores will be developed in Texas’ Fort Bend, Harris and Montgomery counties. Len Moore (the “Lenny’s” in “Lenny’s Subs”) and his wife Sheila opened the first Lenny’s Sub Shop in Bartlett in 1998. Since then the company has spread like wildfire, making the move to franchising in 2001. The company currently has 63 franchise restaurants, with more than 300 franchises in nine states on the way, hoping for 500 by 2008. What were you doing in 1998? Going from 0 to 300 franchises in 4 years is quite an accomplishment. How many more sub franchises can the market handle? The founder has extensive franchise restaurant industry experience. He held management positions with a number of companies including Chick-Fil-A, TGI Friday’s, Olive Garden and Ruby Tuesday’s. We’ve mentioned Lenny’s on Franchise Pundit a few times before.

zpizza, a California Pizza Kitchen-light concept, has store sales average of $550,000. Lenny’s Subs is up to 700 franchises granted, still trailing Jimmy John’s grants of 1,000+ Meet the new U.K. Master Franchisee of Auntie Anne’s Panera Bread’s new design (Nice!):

VERY OUT OF DATE.  Do a search instead.  This was manually updated March 21, 2006 Companies Mentioned in Posts (likely incomplete):Automotive 1-800 RADIATORS Oil Butler Lube N’ Go On-Site-Lube Business & Home Services 1-800-WATER-DAMAGE Bartercard Garagetek Help-U-Sell Home Instead Homewatch Caregivers My Girl Friday PropertyGuys.com Sears Carpet & Upholstery Tax Centers of America Cleaning & Maintenance none Computer & Internet (some are listed in “Retail”) Screenz Food and Restaurant Arby’s Auntie Anne’s Blimpies Cheeburger Cheeburger Chipotle Dippin’ Dots Dream Dinners Doc Green’s Gourmet Salad Dominic’s of New York The Dugout Durango Grill Fazoli’s Fire of Brazil Fogo de Chao Goldstar Chili Jamba Juice Jerq’zine Krispy Kream Lenny’s Sub Shops Mauwi Wauwi Original Hamburger Stand Panaderia Taza Papa John’s Pizza Factory Pizza Patron Pretzel Time Quiznos Red Rock Chili San Francisco Soup Co Shane’s Rib Shack Skyline Chili Smoothie King Smotthie Planet Soup Nazi Steak-out Subway Submarina Sub Station II Super Suppers The Soup Box Supercuts Suzanne’s Kitchen We’re Rolling Pretzel Company Wetzel’s Pretzels Z Pizza Zoup! Fresh Soup Co (List all sub franchises) Health & Fitness Curves Liberty Fitness Home Building & Repair Services See “Business and Home Services” above Personnel & Staffing none Pet Retail and Services Camp Bow Wow Doody Calls The Pet Pantry Wag My Tail Interquest Detection Canines Pets Are Inn Retail Franchises Ace Hardware AuctionDrop Battery Plus Best Cuts GNC Educational Outfitters Fantastic Sams Fastframe Foot Solutions Friendly Computers Geeks on Call GNC Hair Cuttery Herman’s World of Sports Imagine This Sold Orbit Drop Play It Again Sports QuikDrop Roosters Men’s Grooming Centers Screenz Snips Its Sports Clips Stone Mountain Carpet Mill Tom’s Foods We the People Categories: eBay drop offs (generally) Hair Travel & Hotel none Industry Lists & Research 2004 Same Store Sales Growth of QSRs (quick service restaurants) Royalty and Advertising …

I pulled together some numbers of required royalty and advertising fees for sandwich franchises: Required Royalty and Advertising Fees for Sub & Sandwich Franchises Subway 12.5 % Quiznos 11 % Mr. Hero 10.5% Blimpies 10% Jersey Mike’s 10% Philly Connection 10% Togo’s Eatery 10% Zero’s Subs 10% Firehouse Subs 9% Jerry’s Subs and Pizza 9% Burger King 8.5% Charley’s Grilled Subs 8.25% Capt. Subs 8% Cousin Subs 8% Hungry Howie’s Pizza and SUbs 8% Subs Plus 8% Great Outdoors Subs 7% Lenny’s Sub Shops 7% Moe’s Italian Sandwiches 7% Nathan’s Famous 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.