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Jersey Mike's Franchise Cost, Fees, and Profit Potential

Writer's picture: Jack JohnsonJack Johnson

Updated: 6 days ago

Curious about owning a Jersey Mike’s franchise? We’ll cover the costs, fees, and profit potential you need to know.


Unlock the Secrets of Jersey Mike’s Franchise Success
Unlock the Secrets of Jersey Mike’s Franchise Success


Key Takeaways

  • Jersey Mike’s franchise requires an initial investment ranging from $237,419 to $766,971, with an average of $574,323, and a franchise fee of $18,500.

  • Franchise owners must manage ongoing operational costs, including inventory, insurance, employee wages, and pay a 6.5% royalty fee on gross sales for brand support.

  • Jersey Mike’s provides comprehensive training and exclusive territory protection to franchisees, enhancing their chances of success and reducing competition in the local market.





Jersey Mike's Franchise Overview

An overview of Jersey Mike's franchise opportunities.
An overview of Jersey Mike's franchise opportunities.

Jersey Mike, originally known as Mike’s Subs, was founded in 1956 near the Jersey Shore, attracting both locals and vacationers with its delicious sandwiches. The original jersey mike’s location quickly became a beloved spot for its fresh ingredients and authentic taste, laying the foundation for what would become a national sensation, including jersey mike’s subs, and earning the title of jersey shore’s favorite. Jersey Mike's prides itself on its fast and fresh approach, using only the freshest ingredients.


In 1975, Peter Cancro, just 17 years old, bought the business and began expanding its reach. His entrepreneurial spirit led to the franchising of Jersey Mike’s in 1987, starting an era of rapid growth and popularity. Cancro’s vision and dedication have been crucial in shaping Jersey Mike’s into the successful franchise it is today. Jersey Mike's began in Point Pleasant, New Jersey, where franchisees still receive some of their training.


From Humble Beginnings to a $8 Billion Private Equity Valuation: Your Chance to Be Part of the Legacy

Jersey Mike’s started as a small sandwich shop near the Jersey Shore in 1956, offering locals and vacationers freshly made subs with authentic ingredients. In 1975, a 17-year-old high school student named Peter Cancro saw the potential in the business and made the bold decision to purchase it. With determination, a vision for growth, and a passion for quality, Cancro transformed that single sandwich shop into a nationwide franchise phenomenon.

Fast forward to today, Jersey Mike’s has grown to over 2,800 locations across the United States and earned a reputation as one of the top-performing franchises in the fast-casual restaurant industry. Jersey Mike's franchises require franchisees to be fully engaged in daily operations, prohibiting absentee ownership. Jersey Mike's was recently valued at approximately $8 billion during its acquisition by private equity firm Blackstone.

according to the Associated Press. Source


What does this mean for you as a prospective franchise owner?

Peter Cancro’s story is a testament to the power of bold decisions, hard work, and the franchise model. From a teenager who took a leap of faith to a leader overseeing a billion-dollar brand, Cancro’s journey proves that with the right support system and mindset, success is within reach.

Initial Investment Requirements

Starting a Jersey Mike’s franchise requires a significant initial investment, but the potential rewards make it worthwhile. The initial franchise fee is $18,500, covering the cost of entry into the franchise system. However, this is just the beginning of the financial commitment needed to open a Jersey Mike’s location, which includes the jersey mike’s franchise cost.

The total investment necessary to open a Jersey Mike’s franchise ranges from $237,419 to $766,971, with an average investment of around $574,323. This investment includes various expenses such as leasehold improvements, equipment, signage, and initial inventory. Potential franchisees must also have a liquid net worth of at least $100,000 and a minimum net worth of $250,000 in assets to qualify.


The actual investment can vary based on factors such as location, size, and type of restaurant. While evaluating these costs, remember that investing in a Jersey Mike’s franchise also means committing to the brand’s standards and operational excellence.


Ongoing Operational Costs

After the initial investment, franchisees must manage ongoing operational costs to keep the business running smoothly. One of the first expenses is the initial inventory cost, which can range between $4,200 and $27,400 and includes the fresh ingredients and supplies needed to create the signature Jersey Mike’s subs.


Monthly insurance costs are another significant expense, ranging from $1,000 to $14,000 depending on the location and specific policy requirements. In addition to inventory and insurance, franchisees need to budget for other operating expenses, including employee wages, utilities, and maintenance costs.


Operational costs also cover training, grand opening advertising, and additional funds needed for the first three months of operation. Efficiently managing these costs is crucial for maintaining the financial health of your Jersey Mike’s franchise and achieving long-term success.

Royalty and Marketing Fees

Owning a Jersey Mike’s franchise involves recurring royalty fees and marketing fees to maintain brand consistency and visibility. Franchisees pay a 6.5% royalty fee based on their gross sales, which supports ongoing development and ensures they receive the necessary tools and resources to succeed.


Franchisees also contribute to national marketing efforts, enhancing brand visibility and attracting more customers. While these fees can add up, they are crucial in driving customer acquisition and building a loyal customer base.

However, the cumulative effect of these fees can significantly reduce overall profit margins. Careful financial planning and efficient management are key to balancing these expenses and maximizing profitability.


Revenue Potential

Potential revenue opportunities for Jersey Mike's franchise owners.
Potential revenue opportunities for Jersey Mike's franchise owners.

The revenue potential of a Jersey Mike’s franchise is a major draw for aspiring franchisees. According to Jersey Mike’s 2023 Franchise Disclosure Document (FDD), the average unit volume (AUV) for traditional locations is approximately $1,302,781. However, various factors influence profitability, including location, operational efficiency, and market conditions.


Estimated Profitability and Investment Recovery

Based on publicly available industry benchmarks, a hypothetical Jersey Mike’s franchise operating at a 15% profit margin and achieving the median gross sales of $1.1 million could potentially generate net profits of $166,000 annually. Assuming consistent performance and effective cost management, franchisees might recover their initial investment within 4 to 5 years.


Important Notes:

  • The 15% profit margin is a general industry estimate and not specific to Jersey Mike’s. Actual profit margins can vary widely depending on factors such as location, labor costs, and operational efficiency.

  • This example is provided for educational purposes only and does not constitute an earnings guarantee or financial advice.

  • Individual results will vary significantly. Prospective franchisees should carefully review the Franchise Disclosure Document (FDD) and consult with financial advisors before making investment decisions.


For comprehensive details on revenue potential and profitability, review the full 2024 Franchise Disclosure Document (FDD) or consult directly with Jersey Mike’s. Individual results will vary significantly based on factors such as location, operational efficiency, and market conditions. This information is for educational purposes only and does not guarantee earnings or constitute a franchise offer.


Prospective franchisees should carefully review the FDD and consult financial professionals before making investment decisions. With the right approach and effective management, investing in a Jersey Mike’s franchise can be an exciting business opportunity that offers both financial and personal fulfillment.



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Training and Support Programs

Jersey Mike’s offers comprehensive training and support programs to ensure franchisee success. The training spans eight to ten weeks and covers all aspects of restaurant operations, equipping franchisees with the knowledge and skills needed to run their business effectively.


The training consists of three phases: Phase 1 involves 180 hours of on-the-job training, Phase 2 includes 5-14 days of classroom training, and Phase 3 entails another 180 hours of on-the-job training. This structured approach ensures a well-rounded education in both practical and theoretical aspects of running a Jersey Mike’s store.


During the first month of operation, a franchisor representative will be present for a minimum of three full days to provide on-site assistance as a franchise consultant. This support helps franchisees navigate initial challenges and ensures a smooth start to their business.


Beyond the initial training, Jersey Mike’s offers ongoing support, including operational guidance, marketing assistance, and technical support. Franchisees also have access to refresher training programs to reinforce their skills and stay updated on best practices. The company is committed to the continuous development of its franchisees, providing the resources and support needed for long-term success.


Financial Assistance Options

Securing financial assistance is crucial for many prospective franchisees. Jersey Mike’s offers several financing options to help manage the initial and ongoing expenses of opening a new location. One popular option is SBA loans, which can be used for long-term fixed assets and operational capital. These loans offer competitive terms and are often easier to qualify for than traditional bank loans.


The maximum amount available through SBA loans ranges from $500 to $5.5 million, depending on the franchisee’s specific needs. Eligibility generally considers factors such as business size, repayment ability, and sound business purpose. Some SBA loans may even require no collateral for certain borrowers, making them more accessible.

Franchisees can also explore other financing options such as:

  • Term loans, which provide a lump sum upfront, repaid over a set period

  • Lines of credit, which offer flexibility, allowing franchisees to borrow money as needed with variable interest rates

  • Equipment financing, which uses purchased equipment as collateral, making it easier to acquire necessary assets


Established relationships with third-party investors can also provide financial support for franchisees. By exploring various financing methods, prospective franchisees can find the best option to meet their specific needs and achieve their business goals.


Exclusive Territory Protection

One key benefit of owning a Jersey Mike’s franchise is the exclusive territory protection. This ensures that no other jersey mike’s franchises can operate within a specified area, providing a significant competitive advantage. This market security allows franchisees to invest confidently, knowing their customer base will not be diluted by nearby competition. Additionally, Jersey Mike’s franchise systems offer robust support to help franchisees thrive in their business endeavors.


Exclusive territory protection encourages franchise owners to focus on building their business without the fear of internal competition. This peace of mind fosters a more dedicated and motivated approach, ultimately leading to better service and customer satisfaction.


Having a defined area free from competing franchises allows franchisees to concentrate on serving their local market effectively. This enhances the potential for market penetration and helps establish a strong brand presence within the community.





International Opportunities for Jersey Mike’s

While Jersey Mike’s is currently focusing on expanding within Canada, the company is open to exploring international opportunities in the future. This presents an exciting business opportunity for those interested in bringing the beloved Jersey Mike’s subs to new markets around the globe.


If you’re passionate about the Jersey Mike’s brand and believe it would thrive in your country, now is the time to reach out. The franchise development team at Jersey Mike’s is eager to discuss potential international expansion and explore how the brand can be successfully introduced to new regions.


Although there are no immediate plans for international franchises beyond Canada, the company’s willingness to consider global opportunities signals a promising future for potential franchisees worldwide. By contacting Jersey Mike’s franchise development team, you can be at the forefront of this potential growth, helping to bring the taste of the Jersey Shore to new audiences.


Application and Approval Process

Becoming a Jersey Mike’s franchisee starts with completing the online franchise application on the company’s website. This initial step requires prospective franchisees to provide personal information, including their name, contact details, and desired location for the new franchise.


Once submitted, the application undergoes a thorough review process. Jersey Mike’s evaluates the applicant’s financial stability, business experience, and overall suitability for franchise ownership. This ensures that only qualified and dedicated individuals are granted franchise rights, maintaining the brand’s high standards and reputation.

Franchisees can only operate at the location specified in the Franchise Agreement, making it crucial to choose a site that aligns with Jersey Mike’s strategic goals and market analysis. This careful selection process helps ensure the new franchise’s success and its alignment with the brand’s growth objectives.

Commitment to Community Causes

Jersey Mike's commitment to community causes.
Jersey Mike's commitment to community causes.

Jersey Mike’s commitment to community causes is a cornerstone of its brand identity. Since 2011, the company has raised over $113 million for various charities through its Month of Giving initiative, demonstrating a strong dedication to philanthropy. One of the popular items on the menu is the 'Jersey Shore's Favorite,' known for its fresh ingredients and refreshing taste. This initiative supports those in need and fosters a sense of community and goodwill among customers.


Significant contributions include more than $11 million donated to Feeding America, aiding in the provision of over 110 million meals. Additionally, Jersey Mike’s has partnered with the USTA Foundation to raise $4.5 million, supporting youth engagement in education and tennis.


During Jersey Mike’s Day of Giving, 100% of the day’s sales are donated to local charity partners, reinforcing the brand’s commitment to community engagement. This ongoing dedication to charitable causes not only enhances the company’s reputation but also builds customer loyalty and strengthens community ties.



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Summary

Investing in a Jersey Mike’s franchise offers a unique blend of financial opportunity and community involvement. From the extensive training and support programs to the exclusive territory protection, Jersey Mike’s provides franchisees with the tools and resources needed to succeed. Understanding the initial investment requirements, ongoing operational costs, and revenue potential is crucial for making an informed decision.


Jersey Mike’s dedication to community causes and its robust franchise system make it an attractive option for aspiring business owners. By carefully evaluating the financial aspects and leveraging the available support, prospective franchisees can embark on a rewarding journey with Jersey Mike’s. The combination of a strong brand, loyal customer base, and commitment to quality and community creates a promising pathway to success.


Conclusion and Next Steps

Investing in a Jersey Mike’s franchise is a significant decision that requires careful consideration and thorough research. To ensure this exciting business opportunity aligns with your goals, it’s crucial to review the Franchise Disclosure Document (FDD) and consult with a franchise consultant. These steps will provide you with a comprehensive understanding of the franchise agreement, including the initial franchise fee, royalty fees, and other financial commitments.


To begin your journey towards franchise ownership, visit the Jersey Mike’s website and complete the online franchise application. This application will ask for personal, professional, and financial information to assess your suitability as a franchisee. Once submitted, a member of the Jersey Mike’s franchise development team will reach out to guide you through the next steps.


As you progress, take the time to thoroughly review the franchise agreement, ensuring you understand all terms and conditions. Researching the company’s history, financial performance, and reputation will also help you make an informed investment decision.

By following these steps and conducting due diligence, you can confidently decide if a Jersey Mike’s franchise is the right fit for you. With its strong brand reputation, loyal customer base, and commitment to quality and customer service, Jersey Mike’s offers a unique and rewarding business opportunity for entrepreneurs passionate about the food industry.


Frequently Asked Questions

What is the initial franchise fee for Jersey Mike's?

The initial franchise fee for Jersey Mike's is $18,500. This investment is a crucial step towards becoming part of the brand.


What are the total investment requirements for opening a Jersey Mike's franchise?

The total investment required to open a Jersey Mike's franchise ranges from approximately $237,419 to $766,971, with an average investment around $574,323. It's essential to prepare accordingly to meet these financial requirements.


What kind of training and support does Jersey Mike's provide to franchisees?

Jersey Mike's offers an extensive training program lasting 8 to 10 weeks, which includes both on-the-job and classroom instruction, along with ongoing support in operational, marketing, and technical aspects. This comprehensive approach ensures franchisees are well-equipped to succeed in their business.


How does exclusive territory protection benefit Jersey Mike's franchisees?

Exclusive territory protection benefits Jersey Mike's franchisees by ensuring that no other franchise operates within their designated area, which provides them with market security and a competitive edge. This arrangement enables franchisees to focus on growing their business without the threat of internal competition.


What is Jersey Mike's commitment to community causes?

Jersey Mike's is deeply committed to community causes, having raised over $113 million for various charities since 2011 through its Month of Giving initiative. They also actively support local charities during grand openings, reflecting their dedication to community engagement.


Disclaimer

The information provided in this content is for educational and informational purposes only. Any figures, statistics, or examples referenced herein, including but not limited to investment costs, profit margins, and revenue potential, are hypothetical and based on publicly available industry data. They are not guarantees of performance and do not reflect specific results for any particular franchise, including Jersey Mike’s.

Individual results will vary significantly depending on factors such as market conditions, location, operational efficiency, the franchisee’s management capabilities, and other external influences. No representation or warranty is made regarding the accuracy or completeness of the information presented.

Prospective franchisees are strongly encouraged to conduct thorough due diligence before making any investment decisions. This includes but is not limited to:

  • Reviewing the Franchise Disclosure Document (FDD) provided by the franchisor.

  • Consulting with Jersey Mike’s directly for the most accurate and up-to-date information.

  • Seeking independent legal, financial, and business advice from qualified professionals.

The content is not intended to serve as financial, legal, or investment advice. The examples and projections provided are illustrative only and should not be relied upon as a basis for investment decisions. Franchise ownership involves inherent risks, and it is the responsibility of each prospective franchisee to fully understand these risks before proceeding.





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