In September 2009, Firehouse Subs started an advertising campaign: If, after the first bite, a customer doesn’t agree that it’s the best sub ever, the customer gets money back.
“As far as I know,” says Don Fox, CEO at Firehouse Subs, “no one has ever asked for their money.”
Firehouse Subs, started 15 years ago in Jacksonville, Florida, by brothers Chris and Robin Sorensen (both former firefighters), has grown to 379 restaurants with a national presence.
“Our concentration is predominantly in the Southeast,” says Fox, “but we have new markets as far west as Las Vegas. Our northernmost restaurant is in Frederick, Maryland, and we are aggressively expanding in the Washington, DC, market.”
The company aims to have 3,500 restaurants open in the next 15 years. “The challenge will be in maintaining our operations excellence,” says Fox, “which is at the root of our success. The key is having the right area representatives.”
Area representatives (ARs) set Firehouse Subs apart from the crowd. ARs are franchisees who own a training restaurant and the rights to a territory and act on the company’s behalf as they cultivate franchisees in their designated markets.
“They provide the support services on our behalf,” says Fox. “They solicit for franchisees and help develop our brand in their area. They are our anchor and ensure the continuity of the brand, and the quality and consistency we need to be successful.”
ARs recommend potential franchisees and have confidence in candidates sent to Jacksonville—they have to since the partnership lasts the life of the franchise agreement. “In other systems, where a corporate employee provides support service, there’s an inherent degree of turnover,” says Fox.
“We have a rigid system of ongoing support and service standards that ARs provide,” says Fox. “We’re unwavering in this. They do one operations visit per month and a business review to go over financial statements, provide coaching, and help the franchisee optimize profitability. It’s a fundamental part of their role.”
For their efforts, the company splits royalties and franchise fees 50/50. If the average unit volume (AUV) is $600,000, the AR stands to make $18,000 from each restaurant in the area, building a great business as the market grows.
Firehouse Subs franchisees conduct site selection within the company’s parameters and with approval from the corporate real estate team. Minimum requirements are 20,000 people in a three-mile radius, a median household income of $35,000, good parking availability, and the ability to display the company’s sign and logo without restriction.
Growth for Firehouse has been steady. “We have a goal every year of making sure our new restaurants meet or exceed current AUVs for the system, and over the past five years [since this goal was established], we’ve never missed the mark,” says Fox.
Financing growth is one of the biggest challenges for Firehouse. “We have so much demand, with more people coming through ‘Day of Discovery’ than ever before, existing franchisees wanting to expand, and real estate opportunities at a premium,” says Fox. “Even though working with the banks is a challenge, it’s not keeping us from our goals.
“The message I would get out to potential franchisees is that even in the current economy, we’ve stayed the course. We’ve made no changes to our product or recipes, the portions or quality. We haven’t compromised on key attributes. We have remained focused on the strengths that have served us well for 15 years,” says Fox.
For more information about franchising opportunities with Firehouse Subs, visit www.firehousesubs.com
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