Buying A Fast Food Franchise: Subway vs Quiznos
Buying a fast food franchise no longer means you are considering a McDonald's. Today there are a lot of big competitors in the fast food franchise for sale market and one of the largest is Subway. Both Subway and Quiznos have entered a highly competitive industry and made a place from themselves by offering menu items that differ from traditional fast food items like burgers and fries.
So in the battle of fast food franchises, Subway vs. Quiznos, who would win? Let's explore the pros and cons of each and see how they stack up.
Subway has carved a place for itself among industry giants as a healthy alternative to traditional fast food. Subway has grown rapidly and today has almost 39,000 locations in 101 countries. In addition to being popular with its customers, Subway has also been successful at keeping the costs of opening a franchise relatively reasonable.
Brand -- Subway has built an extremely strong brand name through advertising campaigns. As a franchise owner, you won't have to do much more other than put a Subway sign up for potential customers to recognize your business. As a franchisee you would be required to contribute to their marketing expenses paying 4.5% of your gross sales each week back to the franchisor for advertising. This could definitely be seen as a con as well but without advertising their brand probably wouldn't be as big as it.
Cost -- Subway franchisees are required to pay a $15,000 franchise fee to get started. From there, it typically costs anywhere from $100,000 - $250,000 to get your Subway franchise open and ready to serve customers. These costs are lower than many other fast food franchises but still higher than Quiznos, which is another reasons Subway has been a popular choice for many Entrepeneaurs.
Success Rate -- Subway franchises rarely fail. According to CNNMoney, Subway franchises have a higher success rate than Quiznos franchises. Additionally, according to the U.S. Small Business Administration less than 8 percent of Subway loans backed by them end up in default.
Fees -- As I mentioned above, Subway requires their franchisees to make weekly royalty payments totaling 12.5% of weekly gross sales. 8% goes toward the franchise royalties and 4.5% goes towards advertising.
Competition -- Because there are so many Subway locations, you may find that your Subway location is in competition with another franchisee that is in close proximity.
Quiznos has also done well in the fast food franchise business by offering a sandwich alternative to traditional fast food. Quiznos is however much smaller than Subway and not as widely known. Several years ago, the franchise actually ran into some financial trouble and had to restructure in order to stay in business. Today, Quiznos has about 4,400 locations around the world.
Cost -- The costs to open a Quiznos franchise are typically less than that of opening a Subway franchise. The total cost to open ranges from $155,547 to $233,726. It covers all costs, including the franchise fee, architects, even your initial food order.
Competition -- There are less Quiznos locations so you will most not be competing with other Quiznos franchisees for business.
Fees -- Quiznos royalty payments are lower than Subway's. With Quiznos you will pay 7% of your weekly gross sales to them after discounts such as coupons. 4% of that goes toward advertising.
Brand -- The brand is not as highly recognized. While the company has had some good advertising campaigns in the past, the Quiznos brand is not as strong as Subway.
Company History -- As I mentioned earlier, several years ago the company had to do some restructuring in order to stay in business. While they seem to have things in order now, as a Quiznos franchisee you will pay 7% of your gross sales to them so you want to be sure you are working with a solid company.
In my opinion, it is a toss-up! On one hand you have Subway, which is a highly recognized fast food franchise throughout the world. They have a solid franchise system in place and the company is growing but they cost more to open and operate.
Quiznos on the other hand is not as widely recognized but is also working to grow and investing resources to do so. The cost to open and operate a Quiznos franchise is less than Subway and you will have less competition with other franchisees in your market.
Taking all this information into consideration, I'd say when buying a fast food franchise and deciding between a Subway vs. a Quiznos I would recommend looking at your own market. Is there a Subway on every corner? If so considering a Quiznos may be your best bet, but if you're in a market that hasn't been flooded by Subway locations, I think Subway is good choice based on their brand recognition and strong company history.
About This Contributor: Peter Siegel, MBA is the Founder & Senior Advisor (ProBuy & ProSell Programs) at BizBen.com (established 1994, 8000+ CA businesses for sale, 500 new & refreshed postings/posts daily) working with buyers, business owners/sellers, business brokers, agents, investors, and advisors). Reach him direct at 925-785-3118 to discuss strategies regarding buying, selling, (or financing a puchase of) California businesses.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Rick Page, Business Broker - Page Company Brokerage
Business brokerage services in the Southern California area.
|Allen Lee, Business Broker: LA, Orange Counties
Business broker services throughout LA and Orange Counties.
|Flora Chong, Business Broker, Monterey County Area
Business Team Monterey is located in the Monterey Bay Area. one hour south of San Jose. This California Central Coast location is one of the 13 offices of Business Team. We specialize in business brokerage, commercial real estate, & leasing. Flora has 14 years of experience in matching buyers ...
|Matt Sadati, Business Broker, SF Bay Area, Northern CA
I have Engineering and Law, JD degree, with over 30 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 33 businesses each having one to 30 branches.
|Ki (Chris) Kim, Business Broker, Los Angeles, Orange Counties
Business brokerage, commercial real estate services in the Orange County area.
|Dave Richards, Business Broker: Southern California
Keystone Business Advisors is Southern CA-based full-service M&A advisory firm. We specialize in managing the sale of privately-owned California-based businesses with annual revenues up to $100 million. Our firm has completed over 200+ transactions and has considerable experience in most industries.
|Joe D. Robertson, Business Broker, at Southern California Business Brokers
Southern California Business Brokers serves Orange and Los Angeles counties. We have expertise in selling a wide variety of business types from food service and retail shops to technology and construction businesses. We work closely with both business buyers and sellers, assuming a “hands-on” ...
|Vasilis Georgiou, Business Broker: Southern California
Selling These Types Of Businesses: Auto Related, Restaurant Related, Manufacturing Related, Retail Related, Service Related, Wholesale/Distribution; In These Counties: Orange County.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|Buying A Restaurant Can Be Challenging: 3 Key Tips For Restaurant Buyers
People always need to eat; there should be plenty of business. Some restaurant buyers think there is prestige to owning a popular eating establishment. But it isn't an easy business purchase. Peter Siegel, MBA (BizBen Founder, ProBuy & ProSell Program Director at 925-785-3118) reviews this topic.
|FREE Webinar: Buying Or Selling San Francisco Restaurants - Best Practices
This informative 40 minute interview/webinar about buying & selling restaurants in San Francisco with restaurant broker specialist Cheryl Maloney is a real eye opener for restaurant buyers and sellers. Cheryl gives great advice to both buyers and sellers from her years of experience in the industry.
|Why Restaurant Buyers Typically Fail: Best Pro Tips For Buying A Restaurant
Buying a restaurant (no matter what type) can have many pitfalls, and potential restaurant buyers should know how to avoid getting burned! Several restaurant intermediaries and advisors weigh in on this BizBen Discussion about the best way to find, purchase and run a restaurant successfully!
|Buying A Restaurant: 5 Myths Restaurant Buyers Should Know About
Jeff Back, Restaurant Broker & Consultant in the SF Bay area discusses myths about buying restaurant small businesses. It's not what you have been told. He includes 5 myths of the most frequently sited principles for success that are simply myths when examined over decades of his experience.
|Buying A Restaurant With Financing: 5 Options For Restaurant Business Buyers
In this Discussion, Peter Siegel MBA (Business Purchase Financing Advisor at 925-785-3118) discusses financing of purchasing a small to mid-sized restaurant business (with or without real estate). When it comes to financing a restaurant, potential restaurant buyers have many options to choose from.
|FREE Workshop: How To Value And Sell Your San Francisco Restaurant Or Bar
This live workshop by Cheryl Maloney (San Francisco Business Broker Specialist) is designed for San Francisco restaurant owners who are thinking of selling and would like to know how much their restaurant or bar is worth and how to get it sold successfully. RSVP by phoning Cheryl at 415-309-2722.
|Tips From A Restaurant Broker - Check A Restaurant For Karma Before You Buy
Jeff Back (925-736-8200), a SF Bay Area broker specialist who specializes in selling restaurants discusses what he looks for when sizing up a potential restaurant for sale. Do the restaurants you're thinking of purchasing have good Karma? See Jeff's insights into this topic on restaurant karma.
|Specialty Restaurant Broker Discusses Liquor Licenses & Working With The ABC
What you will read in this BizBen blog post you will probably not find in any manual or set of instructions provided by the ABC (liquor licenses in California). This blog post by Jeff Back (SF Bay Area Restaurant Broker Specialist) at 925-736-8200 discusses this topic of liquor licenses in detail.