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Jersey Mike's Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What is the Initial Investment for a Jersey Mike's Franchise?
To open a Jersey Mike's franchise, you will need to prepare for a significant initial investment ranging from $203,583 to $1,317,005. This includes an initial franchise fee of $18,500, along with various startup costs. It's important to have access to liquid capital within this range to ensure you can cover all expenses associated with launching your franchise location. Additionally, you'll need to meet a net worth requirement of $500,000 to $1,000,000, making financial readiness a key aspect of the franchise process.
What Are the Ongoing Fees for Jersey Mike's Franchisees?
As a Jersey Mike's franchisee, you will be subject to ongoing fees that include a royalty fee of 6.5% of your gross sales and a marketing fee of 1.00%. These fees are essential for maintaining brand standards and supporting national marketing initiatives. Understanding these costs is crucial for budgeting and financial planning, as they will impact your overall profitability and cash flow in the long run.
What is the Average Revenue Potential for Jersey Mike's Franchise Units?
The average annual revenue per Jersey Mike's franchise unit is approximately $1,302,781, with a median revenue of $1,272,804. This strong revenue potential is supported by a range of performance metrics, including the lowest recorded revenue of $492,695 and the highest at $3,793,060. This range indicates that while many franchisees can achieve significant sales, performance may vary based on location, management, and market conditions.
What is the Breakeven Time for Jersey Mike's Franchisees?
Jersey Mike's franchisees can expect to reach their breakeven point within 12 months of opening. This relatively quick return on investment is appealing for many entrepreneurs, as it allows for faster financial recovery and reinvestment opportunities. Additionally, the investment payback period aligns with the breakeven timeframe, making it a potentially lucrative option for aspiring franchise owners looking for a robust business model.
Jersey Mike's Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Jersey Mike's Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1818 | 2095 | 2389 |
| Net Change YoY | 277 | 294 | |
| Franchised Units | 1796 | 2069 | 2361 |
| Net Change YoY | 273 | 292 | |
| Corporate Units | 22 | 26 | 28 |
| Net Change YoY | 4 | 2 |
Investment Overview
Jersey Mike's franchise opportunity requires a significant financial commitment, with initial investments ranging from $203,583 to $1,317,005. The franchise fee is set at $18,500, while ongoing royalty fees are 6.5% of gross sales. Additionally, franchisees contribute 1% of their revenue towards marketing efforts, making it essential for potential owners to have a solid financial foundation, with a net worth requirement between $500,000 and $1,000,000.
Revenue Potential
Jersey Mike's franchises have demonstrated strong financial performance, with an average annual revenue of approximately $1,302,781 per unit. The median annual revenue stands at $1,272,804, showcasing the brand's ability to generate substantial income for its franchisees. Notably, some units have reported revenues as high as $3,793,060, indicating the potential for significant profitability within this franchise model.
Operational Efficiency
Franchisees can expect a breakeven period of around 12 months, which is relatively quick for the food service industry. Investment payback is also achieved within the same timeframe, making Jersey Mike's an attractive option for those looking to recoup their initial investments swiftly. This efficiency highlights the brand's operational effectiveness and market demand.
Franchise Growth
Jersey Mike's has experienced consistent growth in its franchise network, expanding from 1,796 units in 2021 to 2,361 units in 2023. This growth trajectory reflects the brand's popularity and strong franchisee support, making it a compelling choice for aspiring entrepreneurs looking to join a thriving franchise system.
Cost Structure
The average cost of goods sold (COGS) for Jersey Mike's is approximately 30% of revenue, leading to a robust gross profit margin of around 70%. Operating expenses, estimated at about $600,000, account for roughly 46% of revenue. This favorable cost structure allows franchisees to achieve an EBITDA of approximately $311,947, translating to about 24% of total revenue, which underscores the potential for healthy profit margins.
Franchise Support
Jersey Mike's provides comprehensive support to its franchisees, including training, marketing resources, and operational guidance. This support is crucial for new franchisees, helping them navigate the complexities of running a successful sandwich shop while benefiting from the brand's established reputation and customer loyalty. The ongoing assistance ensures franchisees are well-equipped to maximize their business potential.
Frequently Asked Questions
The initial investment for a Jersey Mike's franchise ranges from $203,583 to $1,317,005. This includes the franchise fee, equipment, leasehold improvements, and other startup costs.