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FDD Talk 2015: The Cousins Subs Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on September 28, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Sandwich Franchise, Sub Sandwich Franchise

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Cousins Subs Exterior Photo by RiPKey

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Cousins Subs franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Cousins Subs franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Cousins Subs’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales for the 20 affiliate-owned traditional Cousins Subs shops that were open the entire 2014 fiscal year
  • 2014 average gross sales for the 99 franchised traditional Cousins Subs shops that were open the entire 2014 fiscal year
  • 2014 average gross sales for the 18 franchised non-traditional Cousins Subs shops that were open the entire 2014 fiscal year
  • 2014 average total revenue, cost of goods sold, wages, occupancy costs, telephone and utilities, advertising, employee benefits, other operating expenses, and shop EBITDA for the affiliate-owned traditional Cousins Subs shops that were open the entire 2014 fiscal year

Section I – Background Information

Cousins Subs Stays in the Family

The founder of Cousins Subs stepped down in 2015 from his role as CEO, but the 43-year-old chain will stay under family leadership.

Bill Specht announced his retirement as company CEO in June 2015. His daughter, Christine Specht-Palmert, took over the leadership of the company as president and CEO; she had been president and chief operating officer since 2008. Specht remains active in the company as chairman of the board.

Specht-Palmert has worked in Cousins Subs stores since her teenage years. She became human resources manager at the corporate office in 2001.

Specht Enters Hall of Fame

Bill Specht was inducted into the Wisconsin Business Hall of Fame in April 2014. The organization recognizes the professional accomplishments of visionary people in business who have played a role in the shaping of Wisconsin’s economic landscape. The WBHF chose Specht for his strong business savvy, entrepreneurial vision and community spirit.

Bringing East Coast Subs to the Midwest

The inspiration for the chain was sparked by Specht’s homesickness for East Coast subs after moving to Wisconsin in the late 1960s with his wife, Sandy. Specht eventually got the idea for his own shop and convinced his cousin Jim Sheppard to move west from New Jersey and partner with him. The two joined forces to open the first Cousins Subs in 1972 in Milwaukee, the chain’s name born from the partnership between the two cousins.

The store, which partnered with a local baker, used the slogan “Better Bread, Better Subs.” Each location still bakes fresh bread several times each day and offers a number of different bread styles.

In addition to its fresh-bread sandwiches, the chain sells soups, french fries, chips and cookies, as well as a peanut-butter version of Rice Krispies Treats. Cousins Subs sells cheese curds at some of its Wisconsin locations.

Cousins Subs spread through Wisconsin relatively quickly after its first few stores, and eventually a handful of locations were added in Minnesota and Arizona. Cousins Subs now has more than 110 restaurants. Most locations are in Wisconsin, but the chain has plans for continued expansion into both nearby and national markets.

Sheppard died at the age of 64 in 2007 from complications from bypass surgery.

The chain, which started franchising in the mid-1980s, picked up celebrity spokesman Vincent Price, debonair star of classic horror films, during that stretch. In 2005, ESPN’s Dan Patrick took on the spokesman role, holding it until 2011, when Specht-Palmert took over to present the face of the brand within campaigns.


In October 2014, Cousins Subs embarked on a remodeling campaign to push the chain more into the fast-casual realm. Newer locations incorporate classic logos with modern branding, offer mixed seating, and highlight the chain’s Make a Better Community Foundation. The chain looks to attract a good cross-section of customers, especially Millennials, who may be a harder sell but can be fiercely loyal when they find companies that suit them well.

Limited-time items

Bringing back popular menu items for limited-time runs has been a highlight for Cousins Subs, which features several recurring favorites that find their way back to the menu regularly. For example, the Steak Mushroom Swiss sub returned in July 2015 after having been a returning item in October 2014, the Cuban and Pulled Pork & Slaw subs were back in both April 2015 and May 2014, and the Reuben and the Rachel came back for St. Patrick’s Day seasons in both 2014 and 2015.

In July 2014, a partnership between Cousins Subs and Johnsonville Sausage brought a limited-run pairing of subs that was repeated in October 2014. The Wisconsin Steak & Brat was served on Italian Bread and the Wisconsin Brat & Bacon on pretzel bread.

Section II – Estimated Costs

  • Please click here for detailed estimates of Cousins Subs franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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