This article is based on a video originally recorded on Vetted Biz Youtube Channel
Firehouse Subs offers hot submarine-style sandwiches at affordable prices in a unique fire-fighting-themed atmosphere. Their popular menu items include the Barbecue Cuban Sub, Italian Sub, and Hook and Ladder Sub.
Firehouse Subs was founded by brothers Chris and Robin Sorenson who come from a line of police officers and firefighters and previously served as firefighters themselves. Their first location opened in Jacksonville, FL in 1994, and since they began offering franchises in 2005, they have grown to over 1,180 locations across 46 states, Puerto Rico, and Canada. The Current CEO is Don Fox, who has held that position since 2009. Before becoming CEO, Fox served as Chief Operating Officer.
As of 2020, there were 1,114 franchised outlets and 38 corporate outlets. Of the franchised outlets, the vast majority (over 1,000) were traditional restaurants, as opposed to end-cap strip mall restaurants with a drive-thru or free-standing restaurant with a drive-thru.
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How is Firehouse Subs Franchise Positioned in the Limited-Service Restaurant Industry?
Firehouse Subs competes in the limited-service restaurant industry, competing with other fast-casual restaurants like Chipoltle, Panera Bread, and Panda Express. It most directly competes in this space with other restaurants specializing in submarine-style sandwiches like Subway, Jersey Mike’s, and local sub shops. It sets itself apart by emphasizing its flavorful meats and hearty portion sizes – big enough to satisfy a firefighter’s appetite.
How Much is a Firehouse Subs Franchise?
The initial Firehouse Subs Franchise Fee is $20,000. You have to pay this upfront fee when opening a Firehouse Subs franchise.
The more Firehouse Subs franchises you invest in, the greater the opportunity for profit.
Firehouse Subs Franchise Cost
The estimated total investment necessary to begin operation of a Firehouse Subs varies depending on the characteristics of the restaurant site, as summarized below:
- Traditional restaurant: $189,574 to $917,299
- End-cap strip mall restaurant with a drive-thru: $309,013 to $801,280
- Free-standing restaurant with a drive-thru: $349,420 to $997,320
Franchise ranges from $189,574 to $997,320
The following costs are part of the upfront costs included in the initial investment for a Firehouse Subs location. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Firehouse Subs franchise in 2021.
Firehouse Subs Franchise Cost (Detailed, by Site Type)
Traditional Restaurant
| Type of expediture | Low Amount | High Amount | To whom payment is to be made |
|---|---|---|---|
| Deposit | $2,500 | $2,500 | Us |
| Balance of Initial Franchise Fee (Less any Deposit) | $17,500 | $17,500 | Us |
| Mural | $2,600 | $4,300 | Artist |
| Travel and Living Expenses during Training | $0 | $5,000 | Third Parties |
| Opening Advertising | $5,000 | $9,600 | Third Parties |
| Rental of Site (3 months) | $7,000 | $89,880 | Third Parties |
| Real Property Improvements | $0 | $31,477 | Third Parties |
| Leasehold Improvements | $100,642 | $343,982 | Third Parties |
| Deposits and Prepaid Expenses | $0 | $45,525 | Third Parties |
| Signs | $2,690 | $23,500 | Third Parties |
| Equipment and Fixtures | $44,292 | $150,000 | Third Parties |
| Opening Inventory | $7,000 | $20,000 | Third Parties |
| Business Licenses | $350 | $19,298 | Third Parties |
| Insurance | $0 | $5,837 | Third Parties |
| Additional Funds (Working Capital — 3 months) | $0 | $75,000 | Third Parties |
| MIS System Fee | $0 | $1,900 | Us |
| Accounting System Fee | $0 | $12,000 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE UNIT FRANCHISE PROGRAM (EXCLUDING REAL ESTATE PURCHASE COSTS) | $189,574 | $917,299 | |
| Development Fee (based on actual 2019 data) | $20,000 | $50,000 | Us |
| Vehicle | $12,000 | $18,000 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE AREA DEVELOPMENT PROGRAM | $221,574 | $985,299 |
End-Cap Strip Mall Restaurant with Drive Thru
| Type of expediture | Low Amount | High Amount | To whom payment is to be made |
|---|---|---|---|
| Deposit | $2,500 | $2,500 | Us |
| Balance of Initial Franchise Fee (Less any Deposit) | $17,500 | $17,500 | Us |
| Mural | $3,000 | $5,000 | Artist |
| Travel and Living Expenses during Training | $0 | $22,000 | Third Parties |
| Opening Advertising | $5,000 | $8,000 | Third Parties |
| Rental of Site (3 months) | $13,125 | $16,500 | Third Parties |
| Real Property Improvements | $0 | $0 | Third Parties |
| Leasehold Improvements | $164,390 | $287,645 | Third Parties |
| Deposits and Prepaid Expenses | $0 | $8,000 | Third Parties |
| Signs | $7,920 | $13,126 | Third Parties |
| Equipment and Fixtures | $84,384 | $205,883 | Third Parties |
| Opening Inventory | $10,044 | $33,100 | Third Parties |
| Business Licenses | $0 | $1,500 | Third Parties |
| Insurance | $550 | $12,326 | Third Parties |
| Miscellaneous Expenses (3 months) | $0 | $90,000 | Third Parties |
| Additional Funds (Working Capital — 3 months) | $0 | $75,000 | Third Parties |
| MIS System Fee | $600 | $1,200 | Us |
| Accounting System Fee | $0 | $2,000 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE UNIT FRANCHISE PROGRAM (EXCLUDING REAL ESTATE PURCHASE COSTS) | $309,013 | $801,280 | |
| Development Fee (based on actual 2019 data) | $20,000 | Us | |
| Vehicle | $12,000 | $18,000 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE AREA DEVELOPMENT PROGRAM | $341,013 | $869,280 |
Free Standing Restaurant with Drive Thru
| Type of expediture | Low Amount | High Amount | To whom payment is to be made |
|---|---|---|---|
| Deposit | $2,500 | $2,500 | Us |
| Balance of Initial Franchise Fee (Less any Deposit) | $17,500 | $17,500 | Us |
| Mural | $2,400 | $3,500 | Artist |
| Travel and Living Expenses during Training | $0 | $7,728 | Third Parties |
| Opening Advertising | $5,000 | $8,500 | Third Parties |
| Rental of Site (3 months) | $13,496 | $23,000 | Third Parties |
| Real Property Improvements | $0 | $100,000 | Third Parties |
| Leasehold Improvements | $169,700 | $495,600 | Third Parties |
| Deposits and Prepaid Expenses | $0 | $10,756 | Third Parties |
| Signs | $2,500 | $48,000 | Third Parties |
| Equipment and Fixtures | $132,774 | $132,774 | Third Parties |
| Opening Inventory | $6,900 | $27,092 | Third Parties |
| Business Licenses | $250 | $1,000 | Third Parties |
| Insurance | $500 | $7,000 | Third Parties |
| Miscellaneous Expenses (3 months) | $15,000 | $35,000 | Third Parties |
| Additional Funds (Working Capital — 3 months) | $0 | $75,000 | Third Parties |
| MIS System Fee Based on only 1 Restaurant that paid the full $1,200 prior to opening in 2019 | $900 | $1,200 | Us |
| Accounting System Fee | $0 | $1,200 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE UNIT FRANCHISE PROGRAM (EXCLUDING REAL ESTATE PURCHASE COSTS) | $349,420 | $997,320 | |
| Development Fee (based on actual 2019 data) | $20,000 | $50,000 | Us |
| Vehicle | $12,000 | $18,000 | Third Parties |
| TOTAL ESTIMATED INITIAL INVESTMENT UNDER THE AREA DEVELOPMENT PROGRAM | $381,420 | $1,065,320 |
Firehouse Subs Franchise Requirements
In addition to the fees associated with opening a franchise, the Firehouse Restaurant Group requires that franchisors have a minimum of $80,000 to invest, a credit score of at least 650, along with a strong inner drive for excellence, devotion to the Firehouse Subs business, community-mindedness, and a love of subs.
See the complete franchise requirements provided on the franchisor’s webpage.
Owning a Firehouse Franchise Requires Ongoing Fees
- Royalty: 6% of gross sales (reduced to 3% of gross sales during first two years of operation)
- Local Advertising: 4% of gross sales
How much do Firehouse Subs franchise owners make?
2019 Weekly AUV / Franchisees Traditional Development. FYE December 29, 2019
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 185 | 276 | 353 | 204 | 34 |
| Total # of Restaurants | $1,052 | $1,052 | $1,052 | $1,052 | $1,052 |
| % of Franchise Restaurants | 17.6% | 26.2% | 33.6% | 19.4% | 3.2% |
| Average Unit Weekly Sales Volume | $20,007 | $15,339 | $12,519 | $9,884 | $7,328 |
| Number and percentage exceeding average | 71/38% | 131/47% | 174/42% | 111/54% | 21/62% |
| Median | $19,235 | $15,283 | 12,508 | 9,94 | 7,328 |
| High | $38,214 | $16,941 | $13,987 | $10,996 | $7,328 |
| Low | $17,017 | $14,012 | $11,024 | $8,008 | $5,367 |
2019 Weekly AUV / Franchisees Free-Standing w/Drive Thru Development. FYE December 29, 2019
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 8 | 7 | 5 | 3 | 0 |
| Total # of Restaurants | 23 | 23 | 23 | 23 | 0 |
| % of Franchise Restaurants | 34.8% | 30.4% | 21.7% | 13.0% | 0% |
| Average Unit Weekly Sales Volume | $22,138 | $15,044 | $12,098 | $9,255 | $0 |
| Number and percentage exceeding average | 4/50% | 5/71% | 2/40% | 2/67% | 0/0% |
| Median | $21,300 | $14,915 | $12,005 | $9,088 | $0 |
| High | $33,561 | $15,895 | $13,077 | $9,947 | $0 |
| Low | $18,242 | $14,024 | $11,309 | $8,161 | $0 |
2019 Weekly AUV / Franchisees End-Cap Strip w/Drive Thru Development. FYE December 29, 2019
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 16 | 6 | 10 | 1 | 1 |
| Total # of Restaurants | 34 | 34 | 34 | 34 | 34 |
| % of Franchise Restaurants | 47.18% | 17.6% | 29.4% | 2.9% | 2.9% |
| Average Unit Weekly Sales Volume | $22,177 | $15,400 | $12,473 | $9,646 | $6,740 |
| Number and percentage exceeding average | 7/44% | 3/50% | 4/40% | 0/0% | 0/0% |
| Median | $20,453 | $15,458 | $12,448 | $9,646 | $6,740 |
| High | $35,900 | $16,675 | $11,246 | $9,646 | $6,740 |
| Low | $17,040 | $14,118 | $11,246 | $9,646 | $6,740 |
2019 Average Sales: $730,711.54
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $ 593,447 | 10% | $ 73,071 | 8 years |
| 15% | $ 109,607 | 7 years | |
| 20% | $ 146,142 | 5 years |
2020 Weekly AUV / Franchisees Traditional Development. FYE December 27, 2020
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 212 | 261 | 307 | 219 | 43 |
| Total # of Restaurants | $1,042 | $1,042 | $1,042 | $1,042 | $1,042 |
| % of Franchise Restaurants | 20.3% | 25.0% | 29.4% | 21.0% | 4.1% |
| Average Unit Weekly Sales Volume | $20,066 | $15,261 | $12,542 | $9,799 | $6,966 |
| Number and percentage exceeding average | 77/36% | 118/45% | 158/51% | 123/56% | 24/56% |
| Median | $19,741 | $15,549 | 12,787 | $9,999 | $7,221 |
| High | $42,690 | $16,972 | $13,999 | $10,999 | $7,977 |
| Low | $17,039 | $14,014 | $11,019 | $8,001 | $4,961 |
2020 Weekly AUV / Franchisees Free-Standing w/Drive Thru Development. FYE December 27, 2020
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 12 | 4 | 6 | 1 | 1 |
| Total # of Restaurants | 24 | 24 | 24 | 24 | 24 |
| % of Franchise Restaurants | 50.0% | 16.6% | 25.0% | 4.1% | 4.1% |
| Average Unit Weekly Sales Volume | $24,231 | $15,337 | $12,890 | $10,848 | $6,515 |
| Number and percentage exceeding average | 5/42% | 2/50% | 4/67% | 0/0% | 0/0% |
| Median | $22,660 | $15,609 | $13,227 | $10,848 | $6,515 |
| High | $42,289 | $16,348 | $13,702 | $10,848 | $6,515 |
| Low | $17,163 | $14,172 | $11,901 | $10,848 | $6,515 |
2019 Weekly AUV / Franchisees End-Cap Strip w/Drive Thru Development. FYE December 27, 2020
| $17,000+ | $14,000—$17,000 | $11,000—$14,000 | $8,000—$11,000 | $0—$8,000 | |
|---|---|---|---|---|---|
| # of Restaurants | 22 | 7 | 10 | 0 | 0 |
| Total # of Restaurants | 39 | 39 | 39 | 39 | 39 |
| % of Franchise Restaurants | 56.4% | 18.0% | 25.6% | 0% | 0% |
| Average Unit Weekly Sales Volume | $24,325 | $15,872 | $12,681 | $0 | $0 |
| Number and percentage exceeding average | 9/40.9% | 4/57% | 5/50% | 0/0% | 0/0% |
| >Median | $22,414 | $16,672 | $12,846 | $0 | $0 |
| High | $52,691 | $16,975 | $13,714 | $0 | $0 |
| Low | $17,013 | $14,218 | $11,061 | $0 | $0 |
2019 Average Sales: $739,072.75
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $ 593,447 | 10% | $ 73,907 | 8 years |
| 15% | $ 110,861 | 5 years | |
| 20% | $ 147,815 | 4 years |
Is the Company Franchise Profit Worth the Franchise Cost?
When Firehouse Subs owners sell their franchise based on the median valuation multiple for the industry of 0.31 and the average sales total from 2019 and 2020 of $734,892, the franchise would sell for $227,817. This is only about 38% of the midpoint investment of $593,447.
However, owners of multiple Firehouse Subs franchises are able to sell them at a profit. Owners of 7 Firehouse Sub franchises receiving $5,144,245 can sell their franchises at a multiple of 0.86 for $4,424,050. This is greater than their initial investment amount of $4,154,129. So, the more Firehouse Subs franchises you invest in, the greater the opportunity for profit.
Firehouse of America, LLC. Statements of Income. Years Ended December 27, 2020 and December 29, 2019
| 2020 | 2019 | |
|---|---|---|
| Revenues: | ||
| Royalty Fees | $43,007,886 | 47,678,756 |
| Franchise fees | $1,371,750 | $2,800,750 |
| Area representative fees | $421,403 | $436,960 |
| Other fees | $3,949,688 | $3,531,437 |
| Total revenues | $48,750,727 | $54,447,903 |
| Costs and expenses: | ||
| Royalty expense | $18,196,469 | $20,502,344 |
| Franchise fee expense | $368,188 | $735,251 |
| License fee expense | $11,200,010 | $12,725,119 |
| Employee wages and benefits | $8,884,021 | $9,439,277 |
| Telephone and utilities expense | $49,891 | $67,499 |
| Travel and entertainment expense | $266,533 | $651,537 |
| Marketing expenses | $404,216 | $736,598 |
| Occupancy expense | $1,697,371 | $1,702,801 |
| Area franchise development expense | $56,250 | $276,250 |
| Professional fee expense | $1,953,457 | $1,907,242 |
| Depreciation and amortization | $248,626 | $236,711 |
| Other operating expenses | $1,536,716 | $1,976,707 |
| Total costs and expenses | $44,861,748 | $50,957,336 |
| Operating income | $3,888,979 | $3,490,567 |
| Other income (expense) | $23 | $(152,276) |
| Net income | $3,889,002 | $3,338,291 |
Income Statement Key Insights:
Firehouse Subs has been a profitable business for the franchisor Firehouse of America, with profit margins of 6% and 8% in 2019 and 2020, respectively. They were able to increase profitability from 2019 to 2020 in large part because they were able to cut costs by 12%.
How many Firehouse Subs units have opened and closed?
Over the last three years, Firehouse Subs has been growing at an average of 21 franchises a year. One franchise closed in 2020, but that is not surprising in a year that many restaurants across the country were forced to close due to the pandemic.
Units opened and closed from 2018 to 2020
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2018 | 1,051 | 1,093 | +42 |
| 2019 | 1,093 | 1,115 | +22 | |
| 2020 | 1,115 | 1,114 | -1 | |
| Company-Owned | 2018 | 37 | 37 | 0 |
| 2019 | 37 | 38 | +1 | |
| 2020 | 38 | 38 | 0 | |
| Total Outlets | 2018 | 1,088 | 1,130 | +42 |
| 2019 | 1,130 | 1,153 | +23 | |
| 2020 | 1,153 | 1,152 | -1 |
Conclusion
Firehouse Subs has seen franchise unit increases over the last three years, and average franchise revenues have increased as well. However, there are high initial costs of opening a franchise, and based on the industry multiple, it will be difficult to sell the franchise at a profit. You are more likely to make a profit if you invest in several Firehouse Subs franchises instead of just one.
While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in Food and Beverage Industry.
