Singing Pig

I was looking at these franchises and they seem to indicate average turnover of £400000 with 75% gross profit and net profit of around £74k. Anyone been involved in either of these franchises know if these figures are realistic?

Also I was looking at Subways that are up for resale on Businessesforsale.com. On average they seem to have a weekly turnover of £3k. What's the net margin in a Subway? The only reason I ask is that most people describe Subway as a licence to print money but £3k weekly turnover doesn't seem like a lot.

There is an SP member called subman. He has made some very useful contributions to the How much money is needed to buy a franchise such as Subway? thread:

 
http://www.singingpig.co.uk/forums/thread/277084.aspx 

If a Subway is only turning over 3k a week net dont touch it.  You will be buying a job as a sandwich maker.  Ive got three Subways and make a very good living.  No one can say a shop will turnover x in a year, they are all different.  You can make an educated guess but thats all it is - a guess.  Gross profit quoted in ads are all fairy tales.  Ask for net profit.

 As for 74 k from 400 - its is possible with the right location, no financing costs and work 60-80 hours a week but i would say that is unrealistically optimistic.

 Gross profit I would say is net turnover less food and labout costs.  Food in most Subways is about 30% and labour 20-25%.  Royalties 8% Advertising 4.5% so a GP of about 32.5%.

Hi Subman, I sent you a private message (with my phone number) I don't know if it got to you, I am actually in the process of opening a SUBWAY franchise in London and as Part of my research I am asked to speak to a few owners, would you be kind enough to send me a message with your number so I can give you a Call and discuss a few things with you?

Hi Subman,

I saw your topics on Singing Pig. I am interested in opening Subway store in London.

Read most of your posts, on one post you have stated that food cost is around 30%, staff cost around 25%, and royalties 8%, advertising 4.5%, Gross Profit around 32.5% (including rent, rates and any bank cost).

Can I please know, is A1 licence ok for a subway? And I heard with A1 licence you can’t sell hot food, so how come subway sell hot food to customers operating on A1 licence? Is there a trick or loophole?

To open a subway, whom can I contact for more details?

Yours help appreciated. Many Thanks

Ray

Subways operate under A1.  The rules are not straight forward but it has been deemed that A1 is ok.  Some councils object but so far as I am aware no Subway has had to change use from A1 to A3.  There are plenty that are operating under A3 but this is because the site already had that permission.

 Go to the Subway website and reaquest a franchisee prospectus and you should get the contact details.

A1 class is general retail, and hot food is A3.

So how do you do hot food on an A1 class?

Simple. The hot food element is ancillary to the main business - which is sandwiches/rolls - it is not the core business, unlike say indian or chinese takeaway. Hot food is allowable, but a rule of thumb used by many councils is a max of 30% of turnover.

As an owner you can really muddy the waters if you are near the 30% barrier. For example, bacon is cooked. Who is to know if you served it hot or cold at the time of service?