How to Start a Sub Shop

Part 1 - How to start a Sub Shop business - Background

Submarine sandwiches are a go-to food for many people, as they’re inexpensive, quick, tasty, and can even be a healthy meal, depending on the sub. A sub shop serves submarine sandwiches for lunch and dinner. Most also have sides, beverages and other types of sandwiches, and some serve breakfast.

Our guide is in 3 parts:

• Part 1 - How to start a Sub Shop business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a sub shop?

The startup costs associated with opening a sub shop business vary a lot. A shop may be opened for around $60,000, or it might cost hundreds of thousands of dollars.

Here’s a breakdown on some costs associated with a shop that may cost about $60,000. Major expenses that contribute to this include:

• Purchasing inventory (about $1,500)

• Acquiring equipment (about $15,500)

• Franchise costs (about $4,000)

• Three months of lease payments (about $7,500)

• Promotional expenses (about $6,300)

• Remodeling (about $8,000)

Other smaller expenses include deposits, professional fees, cash for the cash register, licensing and permit fees, supplies and incidental expenses.

Many sub shop business owners open a franchise location. Entrepreneur has a list of 10 sandwich franchises, which cost between $84,300 and $432,800.

Business owners can reduce their startup costs some by purchasing used equipment, which is often much less expensive than comparable new equipment, and opening in a small space so that rent is kept minimal. Opening a local shop can also be cheaper than a franchise, as it eliminates any franchise fees.

What are the ongoing expenses for a sub shop?

The ongoing expenses for a sub shop business include employee wages, rent, costs for supplies and costs for ongoing promotional campaigns.

Who is the target market?

Sub shop businesses appeal to many customers. Sandwiches can be adapted to many taste preferences and health requirements, and they’re convenient, affordable meal options.

How does a sub shop make money?

A sub shop business makes money by selling submarine sandwiches, other foods and beverages to customers. Some shops also cater events.

How much can you charge customers?

Submarine sandwiches typically cost less than $10. Subway, for instance, charges between $3.75 and $5.50 for 6-inch subs, and $5.50 and $8.95 for 12-inch subs. Firehouse Subs prices many of its sandwiches between $5.49 and $9.49. (These figures don’t include special sales.)

How much profit can a sub shop make?

A sub shop’s revenue depends on how many customers it serves. Because submarine sandwiches aren’t too expensive, a shop relies on a high volume of customers to make a profit. Therefore, it’s important to be in a high traffic area so that there are lots of potential customers. Signs will help draw passersby in, as will special deals.

How can you make your business more profitable?

A sub shop can increase its revenue by upselling certain toppings that cost more, sides and beverages.

Day-to-Day and Growth

What happens during a typical day at a sub shop?

A sub shop business owner spends much of their time making sandwiches for customers. This involves:

• Welcoming customers into the shop and taking orders

• Assembling sandwiches per customers’ requests

• Ringing up customers on a cash register and giving them sandwiches

In between customers, supplies must be restocked and the shop has to be cleaned.

Owners can expect to place orders for more supplies, receive orders, make schedules for any employees and perform other administrative tasks at least once a week.

What are some skills and experiences that will help you build a successful sub shop?

Sub shop business owners should be familiar with how to efficiently make sandwiches, as that is the main product their business sells. Sub shop owners can learn how to assemble sandwiches and familiarize themselves with the other aspects of serving customers by working in a shop for a few months.

Business owners should also be familiar with how to manage employees and workflows. Talking with other owners of sub shops is an easy and inexpensive way to learn about these parts of running the business.

What is the growth potential for a sub shop?

A sub shop business may be just one location, or it can be a national chain. Many successful shops grow to be regional, either establishing a local chain or opening multiple franchises in one area.

Should you consider joining a franchise?

Joining a sub shop franchise can be a good option for entrepreneurs who prefer to use a proven model rather than start from scratch. While joining one can mean slightly higher initial costs and less control, a quality franchise offers great benefits such as initial and ongoing support, marketing assistance, and brand recognition.

Opening a sub shop franchise typically requires $100,000-$1,500,000. Larger sub shop franchises like Subway and Jimmy John’s typically cost more, while more niche favorites like Togo’s often have lower startup costs.

Interested in joining a sub shop franchise? Check out our favorites.

How and when to build a team

A small sub shop business can be run with just one person, but there is a great deal of work involved and having no employees limits a shop’s growth potential. As soon as possible, you’ll likely want to hire at least one employee. Having an employee can help increase how many customers your shop can serve during peak times, like the lunch hour, and it will let you focus on tasks that will grow the business more.

Part 2 - Is a Sub Shop business the right fit for you?

Part 3 - Action plan to launch your Sub Shop business in 90 days