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I recall subway had "low" startup costs and it resulted in too many locations. What incentivizes the new location to do due-diligence in picking a good locatio
by Forge36 7y ago
I recall subway had "low" startup costs and it resulted in too many locations.
What incentivizes the new location to do due-diligence in picking a good location? If this is placed into the chain owner: What's the difference between a franchise vs single owner?
- jrs235 7y agoChick-fil-A corporate determines all new locations. Corporate cares about the success of their locations because they own the lot, own the building, own the equipment, own just about everything and lease it back to the operator. If an operator violates the franchise agreement they get evicted and or lose their equipment and can no longer operate. It's how Chick-fil-a is able to maintain quality and control. Ever wonder why a Chick-fil-a location doesn't buck corporate and open on Sundays? Because they'd lose everything they need to run their business.
- maxerickson 7y agoThe other costs are plenty of incentive to choose a location carefully. Even for a Subway. Earning back $350,000 takes a lot of sandwiches.
- virtuous_signal 7y agohttps://www.nytimes.com/2019/06/28/business/subway-franchisees.html https://www.nytimes.com/2019/06/28/business/subway-franchise... Apparently too many subways has caused bully by Subway the corporation of franchisees over good locations.
- listenallyall 7y agoOpening a Subway franchise is a great way to ensure you'll always be employed -- at a 50+ hour per week job earning about $40k per year. The business model and royalty rate generally require the owner to be an unpaid, full-time employee for the store to turn a profit.