Port of Subs Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$311,000

-

$528,000

LOCATIONS

130

Emily

Updated

April 11, 2024

Is

Port of Subs

a franchise?

Yes,
Port of Subs
currently
accepts
franchise
applications

Port of Subs is a well-loved American chain of submarine sandwich shops, with its roots firmly found in Reno, Nevada. While it may have started small, it has grown to become a culinary institution, especially in the Western United States.

The journey of Port of Subs began in 1972 when John Larsen opened the doors to his first "Sub Shop" in Sparks, Nevada. As the concept gained popularity, a name change was in order, and in 1975, it became Port of Subs, setting it apart from imitators.

Today, Port of Subs is known for its delectable subs, wraps, salads, desserts, and a range of beverages, providing a satisfying dining experience for its customers.

In 1985, Port of Subs embarked on its franchising journey, building upon its success from 1972 to 1985. Currently, Port of Subs proudly boasts more than 135 company-owned and franchised restaurants in the US.

How many

Port of Subs

franchises

are there?

In 2022, there were
130
outlets in
the United
States, of which
114
are franchises, and
16
are corporate-owned.

What are the

Port of Subs

franchise

fees?

Advertising fee

6.00%

Initial Franchise Fee ($25,000)

This fee is payable upon the execution of the Franchise Agreement. It is fully earned and non-refundable, covering administrative expenses and the opportunity cost of granting the franchise.

Training Fee ($5,000)

This fee is for the Principal Trainees to attend the Initial Training Program.

Royalty Fee (5.5% of Gross Sales)

This fee is due every Wednesday after the close of each Sales Week.

Advertising (3% to 6% of Gross Sales)

  • Brand Development Fund Contribution (1% of Gross Sales): Due on the 15th day of each month based on the Gross Sales for the preceding calendar month.
  • Local Advertising (2% of Gross Sales): This fee is for local advertising and marketing efforts.
  • Grand Opening ($5,000): Franchisees must spend at least $5,000 for the restaurant's initial grand opening. This amount offsets the obligation to pay for Local Advertising up to 2% of Gross Sales.

Technology Fee ($1,250 per month)

This fee covers the costs associated with the required point-of-sale software, intranet, online ordering system, streaming music software, learning management system, and a Port of Subs email address.

Transfer Fee ($10,000)

This fee is applicable if there's a transfer of the franchise.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Port of Subs

franchise?

It costs between
$311,000
and
$528,000
to start a
Port of Subs
franchise.

Port of Subs offers potential franchisees an opportunity to be a part of their growing family. As per their latest Franchise Disclosure Document (FDD), the total investment required to kickstart a Port of Subs restaurant ranges between $310,500 to $528,225.

This investment encompasses various costs, including franchise fees, equipment, inventory, and more. Below, we provide a detailed breakdown of these costs to offer a clearer picture of what potential franchisees can expect in terms of financial commitment.

Type of Expenditure Amount
Initial Franchise Fee $25,000
Site Review $0 - $1,500
Training Fee & Expenses $7,500 - $9,000
Architectural, Engineer, and Legal Counsel $12,500 - $19,750
Construction Management $12,500 - $17,500
Real Estate, Leasehold Improvements, and Construction Costs $95,000 - $196,600
Signage, Graphics, & Interior Décor Items $6,500 - $18,375
Furnishings, Fixtures, and Standard Equipment $96,000 - $145,000
POS and Technology Systems, including Initial Setup $26,500 - $38,500
Insurance $1,500 - $2,500
Initial Inventory & Smallwares $5,000 - $10,000
Grand Opening Marketing $5,000 - $7,500
Licenses, Fees, and Deposits $2,500 - $12,000
Additional Funds – Initial 3 Months $15,000 - $25,000
TOTAL $310,500 - $528,225

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Port of Subs

provide

training

to its

franchisees?

Yes,
Port of Subs
provides
training

For those considering a venture into the sandwich industry with Port of Subs, understanding their training and support offerings is pivotal. Here's a closer look at what they provide to their franchisees:

Training Program: Port of Subs offers a blended learning training program that combines internet-based, classroom, and on-site training at an approved training restaurant.

Who Needs to Attend: At least three individuals must attend and successfully complete the initial training program. This includes the franchisee's Operating Principal, a full-time General Manager, and one other employee approved by Port of Subs.

Training Content: This includes sales techniques, product orientation, accounting procedures, food preparation, and operations management.

Location and Duration: The training is provided at Port of Subs' designated locations, which may include their headquarters. The training includes pre-training videos and workbooks, classroom training, and on-the-job training.

Training Expenses: While Port of Subs covers the direct training costs, such as instructors and materials, the franchisee is responsible for all indirect training costs.  As part of the initial training for the Principal Trainees, franchisees will pay a Training Fee of $5,000 upon executing the Franchise Agreement.

Does

Port of Subs

provides

territory

protection?

Franchisees will not receive an exclusive territory. They may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands controlled by the franchisor.

However, franchisees are granted a designated location to operate their Port of Subs Restaurant.The specific boundaries and size of this territory, referred to as the "Designated Area", are determined based on various factors.

The franchisor and its affiliates reserve the right to establish and operate other outlets within the franchisee's Designated Area. These outlets can be permanent, temporary, or seasonal. Furthermore, they can market their products and services in or draw customers from the Designated Area without any compensation to the franchisee.

Can a

Port of Subs

franchise

be run as

a passive

investment?

The franchise highlights the role of an "Operating Principal," who is expected to supervise and actively participate in the day-to-day operations of the restaurant.

While personal participation in the direct operation of the restaurant is not mandatory, the designated Operating Principal must be approved by Port of Subs.

This individual, along with the franchisee, is required to attend and successfully complete the initial training program provided by the franchisor.

In essence, while Port of Subs offers some flexibility in its management structure, they emphasize hands-on management and supervision of the franchised business.

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