Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

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Franchise Chatter News Roundup: 7 Must-Read News Stories About the Firehouse Subs Franchise

by Franchise Chatter on September 30, 2014

in Franchise Chatter Guides, Franchise Chatter News Roundup, Sub Sandwich Franchise



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Firehouse Subs Exterior Photo by gsbrown99

Compared to many of the companies that have appeared in Franchise Chatter’s News Roundups, Firehouse Subs is a relative newcomer to the market, founded in 1994 by former firefighters Robin and Chris Sorensen in Jacksonville, Florida. Their restaurants feature a firefighting theme that carries through not only on the menu with sandwich names like the Hook & Ladder and the Engineer, but also in store décor featuring firefighting equipment, memorabilia, and artwork.

In just nineteen years after its initial founding, the company currently boasts more than 800 locations in 42 states, clearly indicating that the firefighting pair of brothers have an idea that’s working very well.

When hunger hits consumers like a 3-alarm fire, it seems more and more are turning to Firehouse Subs to quench the flames. Here are 7 must-read news stories about the Firehouse Subs franchise:

Explosive Expansion

The Firehouse Subs franchise opened 155 new restaurants in 2013, finishing out that year with a grand total of 722 locations (Firehouse Subs Press Release). As of now, the company’s website says there are more than 800 locations (Our Story), which means at least 78 locations have been added in 2014.



2013 also saw the addition of four new states to the company’s roster, including Maine, Idaho, Wisconsin, and Washington, reaching a total of 38 states across the country (QSR Magazine), but that number has already increased to 42 states in 2014. The company has yet to expand beyond the US, but its domestic expansion plans aim for 2,000 restaurants by 2020.

The company calls that planned growth a “controlled burn,” but it feels more like a wildfire in the franchise world (International Franchise Association). The company has more than doubled the number of locations since 2010, when there were just 360 restaurants (Entrepreneur.com), and only around 30 of those are company-owned.

Supporting First Responders

After a white police officer shot and killed an unarmed black man in Ferguson, MO, and in the aftermath of resulting protests, there has been renewed attention in the media about the militarization of local police forces around the country. The Firehouse Subs franchise has gotten into the act as well, but on the side of supporting police and firefighters with protective equipment.

In 2005, the company established its Firehouse Subs Public Safety Foundation to support first responders in the communities in which it has restaurants.

Firehouse Subs donated approximately $13,000 in body armor kits to the Utah County Sheriff’s Department. And it’s not the only instance of Firehouse Subs donating to police and fire departments. In fact, the Firehouse Subs franchise has given upwards of $10.1 million in 41 states and Puerto Rico, including well over $137,900 in Utah alone, through its charitable arm since 2005 (The Digital Universe).

Other recent donations include $35,000 to the Seaside Heights Fire Department in New Jersey for new breathing equipment (Atlantic Highlands Herald), $30,000 to the Jacksonville Fire and Rescue Department in Florida for bailout kits that allow firefighters to rappel out of buildings on short notice (Action News Jax), and $9,600 to the Louisville Division of Fire Arson Squad in Kentucky for bullet-proof vests (WDRB.com).

Improving the Supply Chain

When it comes to successful restaurant franchising, few things are more critically important than maintaining a top-notch supply chain for fresh ingredients delivered in a timely fashion. Firehouse Subs recently announced its decision to partner with ArrowStream’s OnDemand supply chain management and analysis solution.

The OnDemand platform changes the way companies do business by streamlining the amount of time spent trying to gather and audit data, to facilitate quicker access to current information for more strategic decision-making (FastCasual.com). OnDemand is a supply chain Software-as-a-Service (SAS) package that will allow Firehouse Subs to manage food spending, contracts, inventory, and quality assurance as centralized processes within a single data platform (MarketWired.com).

Cutting-Edge Beverage Dispensers

Coca-Cola’s Freestyle beverage dispenser is a touch-screen dispenser that flavors self-created beverages in micro-doses, and is capable of dispensing as many as 146 different flavors (USA Today). Firehouse Subs is one of the few chains that has latched onto the Freestyle hook, line, and sinker, featuring the cutting-edge dispenser in every one of its more than 800 locations.

The latest flavor to be added to the Freestyle is Cherry Lime-Aid Light, a lighter version of its exclusive original recipe (Firehouse Subs Press Release). The only hang-up so far is that less savvy consumers can take a long time to figure out what they want when faced with 146 choices.



And the Award Goes to…

If the Firehouse Subs franchise were a movie, it would have walked away from the Academy Awards with a slate of Oscars. The company is racking up awards and star rankings at a mind-boggling rate.

Here’s a sampling of what Firehouse Subs has achieved in recent months: Ranked #1 in 2014 Market Force Information poll in such categories as sandwiches, friendly service, and accommodating children (QSR Magazine); #8 on the 2014 Top 10 Growth Chains (Nation’s Restaurant News); #10 on the 2014 FastCasual Top 100 (FastCasual.com); #1 in Technomic’s 2013 Chain Restaurant Consumers’ Choice Awards in such categories as Overall Rating, Quality, Taste and Flavor, Support Local Community Activities, and Pleasant/Friendly Service (International Franchise Association).

Franchise Business Review has also named Firehouse Subs #1 in franchisee satisfaction for two years running (Firehouse Subs Press Release). And those are just a few examples of what the company has achieved lately.

Lessons Learned from the Great Recession

A revealing point to examine with any franchise is how it fared during the Great Recession. Like many restaurant franchises, Firehouse Subs was suffering from a sharp decline in sales during the economic downturn. The company’s first response was to stop collecting the normal 2% marketing/advertising fee, and encouraged franchisees to spend the funds on local marketing initiatives (New York Times).

When it became clear that the strategy was not working, Firehouse made an abrupt about face, not only reinstating the marketing fee, but also asking its franchisees to double it and pay 4 percent for local advertising. It used the money to launch an ambitious $8 million marketing plan in the very depths of the recession.

Did it work? Yes it did. According to Firehouse Subs CEO Don Fox, sales turned on a dime and went positive system-wide. It’s a great case of flexibility in strategy during stressful times (RestaurantNews.com). That advertising fee has since dropped to 1%, plus 2% for local store marketing, according to their most recent Franchise Disclosure Document for 2014.

Boomers, Millennials and Xers, Oh My!

Some sandwich chains thrive by finding a particular market segment to cater to, such as Jimmy John’s catering to the college crowd. Firehouse Subs, on the other hand, has seen a very even distribution among its customer base, with a relatively uniform 33% being Baby Boomers, 33% being Millennials, and another 23% being Generation Xers.

This makes for an interesting dilemma in terms of who to try and satisfy. In the end, Firehouse Subs is coming up with ways to reach all types of customers. Its active public safety foundation shows the kind of deep community engagement that resonates with Millennials and Xers, and it recently rolled out a significant array of healthy menu options that will appeal to Boomers (QSR Magazine).

Conclusion

The Sorenson brothers went out on a limb when they started franchising their successful restaurant just a year after its initial founding. They were two entrepreneurs itching for success after several failed attempts in other lines of business, including Kris Kringle Christmas Trees, which failed to make a single sale, as well as real estate and even rock ‘n’ roll. It wasn’t until they looked at a potential sandwich franchise opportunity that they realized they could capitalize on their family’s long history of fire and police service to give it a unique twist.

By remaining flexible and being willing to change tactics mid-course to successfully weather the Great Recession, the chain has shown a tremendous ability to make quick decisions in a rapidly changing business environment (Entrepreneur.com). Of course, it helps that the sandwich chain falls in the fast-casual category, which is the only part of the restaurant industry that continues to experience strong growth in terms of units, sales, and appeal (QSR Magazine).

The 7 must-read news stories presented above serve to keep you up-to-date on the latest developments for the red-hot Firehouse Subs franchise.



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