How Much Jersey Mike's Franchise Owners Really Make Per Year
Jersey Mike's bills itself as "a sub above" and while they may not be as healthy as Subway, the New Jersey-based sandwich chain is clearly doing a lot of things right. According to The Motley Fool, Jersey Mike's was the fastest-growing sandwich chain in the United States in 2013, and it continued that trend through 2019 as well (via Nation's Restaurant News).
The Jersey Mike's story is hardly a new one since they've been making sandwiches since 1956, but with 2,000 locations open or under development, it's obviously a hot ticket for potential franchise investors (via Jersey Mike's). The brand has been highlighted by business publications like Forbes as one of the best-franchise restaurants to buy into, and with 16 percent growth between 2010 and 2017, it's easy to see why.
"We have been able to balance new franchise sales and on-going support," company president Hoyt Jones said before adding "We have 35 Area Directors who assist and support our franchisees." Those new franchise investors stand to make a good income too if they can make the Jersey Mike's cut.
Jersey Mike's owners don't make as much as franchise owners of better-known chains
According to Careerbliss, a Jersey Mike's franchise owner operator can expect to earn an annual income of around $73,000. That may be less than the six-figure incomes of franchise owners of chains like McDonald's and Five Guys, but it's still higher than what Papa John's franchise owners are pulling in. Considering that 70 percent of Jersey Mike's new stores come from existing franchisees, it's reasonable to believe that a good number of them are indeed making over $100,000 a year.
Mitch Cohen, a Long Island, New York owner, for example, has committed himself and his partners to open five Jersey Mike's locations — though he isn't ruling out more. "Jersey Mike's recognized that developing five locations for development is enough to work on and they prefer to have a cautious strategy. It's the right approach," Cohen told Forbes.
Buying into five Jersey Mike's franchises might sound like a lot, but it's nothing compared to the franchise empire Alvaro Garcia is building. In 2014, Garcia was the owner of 20 Jersey Mike's locations in California, with plans for many more, he told Entrepreneur.
Jersey Mike's initial franchise fee isn't as steep as others
Opening a franchise of a popular restaurant is often very expensive and per the company's website, investors in Jersey Mike's can expect the cost to be between $237,419 and $766,971. That's certainly not cheap, but it's a lot less expensive than the $1 to $2.2 million investment a person would spend opening another McDonald's.
Like just about every restaurant franchise, investors have to pay an initial franchise fee, and it's actually not that steep compared to others. Investors who want to jump on the burger bandwagon and get a piece of the Five Guys action will have to pony up $25,000. Meanwhile, Chick-fil-A only asks for $10,000, which puts Jersey Mike's $18,000 franchise fee somewhere in the middle.
Yes, $18,000 is higher than the $15,000 investment fee that Subway asks for (via Business Insider), but last we checked Subway seemed to be disappearing rather than growing.
Jersey Mike's franchise owners must show they have a healthy net worth
Potential investors will need to show Jersey Mike's that they have the net worth to back up the franchise startup costs. Franchisees are required to have a net worth of at least $300,000, and $100,000 of that should be in liquid assets (via Entrepreneur).
Considering how expensive it can be to get a Jersey Mike's up and running, this net worth requirement is pretty understandable. By far the most expensive part of opening your own Jersey Mike's is going to be the building of, or renovation of the restaurant's building. The "leasehold improvements" are estimated to cost around $136,000 to $384,419.
The bright side is that once you have the store built, Jersey Mike's corporate is reportedly very supportive in making sure new locations succeed. "The support has been exemplary and hasn't changed from the first location to the third," Cohen said.
Jersey Mike's franchise owners are encouraged to give back to their community
Jersey Mike's doesn't go into business with just anybody. A quick look at their steps to owning a franchise reveals that it could easily take the better part of a year to open a store. Besides the financial vetting and training, the company places a lot of emphasis on community involvement from its franchisees.
Jersey Mike's states on the company website that while it is voluntary, franchise owners are encouraged to donate 100 percent of their store's earnings on an annual day of giving. So far, the program has a 100 percent participation rate and in just three years, Garcia's locations alone raised $350,000 dollars for various community groups.