Development Agents are also expected to ensure franchisees are operating within company guidelines by having field reps that inspect stores monthly. If you are considering Subway, talk to existing franchisees in the area and ask about their satisfaction with the DA of that area. They have to be smart in their development. Therefore, they can`t just go putting Subways on every corner to meet the development numbers they need. Per their contracts, they must maintain a certain level of sales average in the market. DAs have contracts with Subway`s parent company, Doctor`s Associates Incorporated. Most DAs are very conscious of their existing franchisees.
There have been some unhappy franchisees when stores were opened close to their existing store and sales were negatively impacted. Yes, as their company given titles suggest they do focus on developing their given markets/territories. Development agents` "sole mission in life" is not just to open new stores. Subway does not have "regional managers", but does have "development agents" a.k.a. If you purchase a subway you do not have the rights to a certain territory. With over 26,000 stores we have tremendous buying power.
Some food distributors don`t want Subway`s business because the pricing leaves so little room for distributor profits. IPC (Independent Purchasing Cooperative) was formed to negotiate prices and ensures all foods/supplies meet "Gold Standard" qualities. Yes, Subway franchisees must purchase the food from one distributor, not from "the parent company". This was the 14th year Subway was rated #1. I`m not sure what article in Entrepeneur Magazine said Subway was rated one of the worst franchises? I would love to see a link to this article? Entrepeneur Magazine rated Subway the #1 franchise in their Franchise 5. Now, one or two stores are not going to make you a multi-millionaire, but you can make a comfortable living without much of a time investment. Now lets say you were lucky enough to get a great location and you store does $15k/week (the area I am in has several stores that do this and much more in sales so it is very possible), well you should be making in excess of $150k per year. If you have a store that is merely average you should profit in the ballpark of $80k/yr. But for the following estimate, lets use 20% average profit. I averaged 22.63% for the first quarter this year and I was in my stores an average of 10 hours or less per week so 20% is not that hard. It is relatively easy to pull 20% profit if you keep an eye on the business. So for easy round numbers lets say the average store does $400k/year. The average store in the US does a little shy of $8,000/week.
First off, I have been involved with Subway for 17 years, since 1989, and it is a good company. I don`t want to make anyone mad, but some things posted here are either wrong or misleading. There are some great franchises that are based on the "Subway" model that I think would be better investments. and I don`t blame them because Subway has made them multi-millionares. All the development agents care about is getting more stores built, not whether or not those new stores will be detremental to existing stores. There are way too many of them and internal competition is a major problem. Subway is not a great franchise to be involved in right now. The real key is to not rely on Subways internal marketing and do some local advertising/marketing of your own.Secondly, everyone who has posted here is correct. Keep in mind, this is not easy and most Subway owners don`t do this well. So, if you have a store averaging 10,000 a week in sales, you`ll make about 10,000 a month profit. The general rule of thumb is that if you really push it (work in the store yourself, keep food and labor costs as low as possible, and stay on top of loss prevention) you can reach a profit margin of about 25%. I was mildly involved with Subways for a while and learned a lot about operating these stores.