Join Australia's most dynamic and respected property investment community

Subway Franchise

Discussion in 'Small Business' started by Darlinghurst Boy, 7th Oct, 2015.

  1. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    866
    Location:
    Darlinghurst Sydney
    i notice theres a few Subway Franchises around town for sale they are priced from 80k right up to a million.
    Im a bit scared to spend 300k on a franchise or actually any business.

    I know you have to take risks in life to get anywhere .
    Anyone have any experience in Subway ?
     
  2. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,146
    Location:
    Sydney
    Ask Geoff w . He's had one .

    Cliff
     
  3. tomlemke

    tomlemke Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    362
    Location:
    Newcastle
    one at Lake Munmorah would defiantly do well.
     
  4. House

    House Well-Known Member Premium Member

    Joined:
    13th Sep, 2015
    Posts:
    774
    Location:
    Sydney
    I'd suggest talking to a few franchise owners... and then make up your mind.

    I was going to open one up on Campbell Pde in Bondi as the figures looked pretty good so went and chatted with owners (of any franchise) in nearby suburbs and most of them didn't recommend it unless you have a good few years previous experience managing a business or similar.

    The only one that admitted to actually doing well was the owner of a pizza franchise on the Upper north Shore of Syd. Great story of how everyone told him it was a terrible idea but he ended up making a killing. Poured his heart and soul into it to build the reputation and sold it as it was the bane of his life.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,589
    Location:
    Sydney or NSW or Australia
    I have avoided them to date, so I can't comment.
     
    DaveM likes this.
  6. Tony Fleming

    Tony Fleming Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    547
    Location:
    Sydney
    I love me some subway but so many in my local area have gone bankrupt or their staff is just the family of the owner. Wages have risen and prices have stayed the same. It would really need to be a good area.
     
  7. Jacque

    Jacque Buyers Agent and Bookworm, Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    519
    Location:
    Sydney
    Why? Has there been opposition in the past or do they just have something to prove LOL :D:D:D?
     
    sanj likes this.
  8. tomlemke

    tomlemke Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    362
    Location:
    Newcastle
    Darlinghurstboy was talking up that a major shopping centre and cinema was going to be built there, so all that extra foot traffic would have to be good for business ;)
     
  9. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    906
    Location:
    Melbourne
    ...and has written quite extensively of his experiences on SS.

    The Y-man
     
  10. Brian84

    Brian84 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    962
    Location:
    Sydney
    Already one there in the new shopping centre
     
  11. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,509
    Location:
    Sydney
    I have a business broker friend and I'm often sent a list of businesses for sale and they are usually takeaways, cafes and franchises. Wouldn't touch them. If you want a good location you will be up for expensive rent.
     
  12. Matty77

    Matty77 Active Member

    Joined:
    21st Sep, 2015
    Posts:
    44
    Location:
    Adelaide
    If you want to work in the business full time plus another 20 hours over that then it can be good, if you want to manage off site or get a manager in to run it then I say forget it, you just wont make any money. Really you need to be there as much as possible to help the wages and make sure everyone is going flat knacker, and that you only have peak staff during peak periods...

    Obviously though if you are in a great location you can make money, but again you really are relying on traffic, for example you could buy a subway that isn't doing so well and try and improve it, aside from cutting costs what can YOU really do to get more people in there? I don't reckon you can do much at all, you have to market the same as the other subways, price the same as the other subways, offer the same as the other subways. So if you cant cut costs you are stuffed. Location, location, location.
     
  13. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    1,660
    Location:
    Sydney
  14. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    866
    Location:
    Darlinghurst Sydney
    One in Glebe has been selling the last 8 months for 80k
    Seems a one man operation with 15 hour days though.
    Bad location on top of Glebe Point Rd.
     
  15. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    1.Franchises only make money for the company selling the franchises....

    2. If you buy a franchise you a lucky to buy a wage out of it

    3. You need multiple franchises to make any real coin.

    I've had any clients who have bought and sold them, from cold rock, subway, hungry jacks

    The only one who made any real coin was a syndicate (4 clients) who owned 10 hungry jacks, they operated them very well, reviewed them every 6 months, then offloaded the poor performing stores and picked up better ones.. From the surface it looked like they owned hamburger fast food shops, but they were actually in the business of buying and selling franchises.

    My #1 point to consider is to remember, if you are lucky you are buying a wage....
     
    fullylucky and Terry_w like this.
  16. Mumbai

    Mumbai Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    763
    Location:
    Sydney
    May be not marketed properly? If you can afford it, put your heart and soul in the business and make it successful.
     
  17. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    2,183
    Location:
    Canberra
    As people have said, I was in Subway. I bought an existing store and built a new store. The turnover was high, it was in the top 5% of stores in Australia- and the price reflected that. The rent was below the average Subway.

    It was a hard slog. I drew just a small income just to keep things afloat. Even with such a large turnover low rent store it was difficult to keep things afloat. One very big expense was the loan repayments on a big loan - a ten year p & i loan with high rates. However when we sold, we did OK because of the very small amount we had to pay back to the bank.

    Some people do very well from them but you have to be very good at it. I wasn't. For me it was eight years working 6-7 days a week, 52 weeks a year for 8 years. So the bank balance after we sold was good. It was a struggle to make it working like that.

    It's a low margin business relying on high turnover to make it work. I would certainly recommend good business and management experience before trying it.

    As has been indicated I did post in the somersoft forum.
     
    fullylucky, CDL, Ted Varrick and 5 others like this.
  18. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,603
    Location:
    Adelaide, SA
    I think the exception here is McDonalds, I've seen some financials of about 5 different WA stores. They're making a lot.
     
    Greyghost and charttv like this.
  19. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    2,977
    Location:
    Brisbane
    I know a couple who had about six (maybe eight?) franchise pizza shops. They said the only way they made money was pushing through a high volume. Pizza were cheap so they relied on quantity. They worked hard, did a lot of the prep in different stores every day, chopping, slicing - didn't see much of each other as one watched the kids while the other worked, every day tag team.

    Their marriage ended. They had made such good choices, had good assets, and it all went sour.
     
  20. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    2,183
    Location:
    Canberra
    It was very hard on our marriage. I'm very fortunate to have a wife who was determined to see things through. Many people would not have bothered. I've indicated elsewhere that alcohol was a problem for me, it was a way of coping with the constant pressure. It's no coincidence that I gave up shortly after getting out of it.
     
    Propagate, clint05, datto and 4 others like this.