How Much Does It Cost To Open A Sandwich Franchise?

The sandwich franchise industry has exploded in the past few years. With so many options and new franchises popping up every day, it can be hard to know where to start and the required investment cost for a sandwich franchise. The cost of opening a sandwich franchise depends on a variety of factors, such as the type of franchise company you choose, the geographic location of your restaurant, and the type of cuisine offered. Most costs will vary depending on which specific franchise you choose; nevertheless, the total cost of buying a sandwich franchise ranges between $400,000 to $1,500,000. It’s therefore important to do your research when selecting a franchise and consider the cost of a franchise relative to the potential profits you can make from it. 

In franchising, there are some general costs that most sandwich franchises have in common. Read on to learn more about the breakdown of the costs to open a sandwich franchise business.

A Breakdown of the Cost of Buying a Franchise

Franchise Fees

Franchise fees are a one-time payment that the franchisee pays to the franchisor for the right to enter into a franchising agreement. The franchise fee gives the franchisee the right to use the franchisor’s trademark, logo, brand name, method of operation, and other intellectual property of the franchisor. The franchise fees for a sandwich shop range from $15,000 to $50,000, depending on the brand of the sandwich company.

Restaurant Setup Costs

The cost to open a sandwich franchise depends on the size of the space you lease. Most franchise agreements require you to open a minimum of one and a maximum of three locations. This means you must also lease a minimum of one and a maximum of three locations. The cost to lease a restaurant space depends on the location and size of the property. The cost to lease a space in an urban area may be more expensive than a suburban space. However, the cost to lease a restaurant also depends on the type of space and building. If you lease a property in a traditional shopping center, the cost will be higher than if you lease a space in a mixed-use building with residential units above the restaurant.

Equipment and Supplies

Sandwich equipment is another added cost of opening a sandwich franchise. You’ll need to invest in equipment that includes refrigeration, a bread maker, a meat slicer, and a toaster. These items may cost between $100,000 and $200,000. You’ll also need to invest in a kitchen and related equipment. In addition to the cost of buying equipment, you’ll need to buy supplies such as napkins, condiments, fresh ingredients, cooking utensils, and more.

Marketing Costs

When you buy a franchise, you’ll be required to pay between 2% to 3% of your revenue to the franchisor. The purpose of the payment is for the franchisor to include your franchise location in the company’s marketing campaign. In addition to the general marketing strategy, you can also market your sandwich franchise personally. One option is to use online marketing, such as social media platforms, to optimize your website. You can also use in-person marketing, such as providing samples at food festivals and local events. 

Employee Training and Living Expenses

In franchising, the franchisor must train the franchisee to understand the mode of operation of the franchisor. In sandwich franchises, the franchisor will teach franchisees their recipes, customer service strategy, and other things that make the franchisor stand out from the competition. Usually, the franchise fees cover the training; however, you’ll be required to cater for the accommodation, travel, and living expenses for yourself and your employees.

Training may last from a few days to one or two weeks with some franchisors. In contrast, in some more complicated franchise systems, the training could last for several months and include classroom instruction followed by virtual workshops or seminars.

Accounting and Legal Fees

Before signing your franchise agreement, it’s best to hire a lawyer that understands franchising. Your lawyer will help to review Franchise Disclosure Document FDD. The attorney’s fee is dependent on the rate charged by your lawyer, but it should be between $1,500 to $5,000. You’ll also need to hire an accountant to start the record-keeping of your sandwich outlet as soon as you start running the business. The rate charged for record-keeping and accounting will depend on your accountant’s hourly rate.

The bottom line is that the cost of buying a franchise covers several aspects of starting a new business and it varies based on the size of the franchise, the type of franchise company, and the number of locations you wish to own.

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