In this FDD Talk 2017 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 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Cousins Subs franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Cousins Subs’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average gross receipts for the 21 affiliate-owned traditional Cousins Subs Shops that were open the entire 2016 fiscal year

• 2016 average gross receipts for the 66 franchised traditional Cousins Subs Shops that were open the entire 2016 fiscal year

• 2016 average gross receipts for the 11 franchised non-traditional Cousins Subs Shops that were open the entire 2016 fiscal year

• 2016 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 2016 fiscal year

• growth in average unit volume for all Cousins Subs Shops between fiscal year 2011 and fiscal year 2016

• system-wide annual net sales in fiscal years 2011 and 2016 for the 66 traditional franchised Cousins Subs Shops, 10 non-traditional franchised Cousins Subs Shops, and 21 traditional affiliate-owned Cousins Subs Shops that were open during both the entire 2011 fiscal year and the entire 2016 fiscal year

• percentage growth in net sales in the 1st, 2nd, 3rd, and 4th quarters of 2016 as compared to the previous year for all Cousins Subs Shops that were open for both of the full comparison periods

Section I – Background Information

16 Things You Need to Know About the Cousins Subs Franchise

Expanding Franchise System

1.  In 2016, Cousins Subs announced that it would be undergoing a rebranding initiative, committing to streamlining its locations’ look and feel, which has set the company up for its next phase of growth.

2.  As a result of last year’s growth plan, Cousins announced in early April 2017, that it was ready to expand in other areas of the Midwest, specifically in the Chicagoland area. Cousins has signed new agreements with three franchise groups: The OM Group; multi-unit owners Chad Ellett and Randy Fusch from Reedsburg, Wisconsin, along with Mike Gilbertson of South Beloit, Illinois; and father-son business owners John Stewart Sr. and John Stewart Jr.

3.  Ellet, Fusch, and Gilbertson have signed a development agreement to open two new stores over the next two years between Madison and Rockford, Illinois. The Stewarts, who have purchased the two Cousins franchise locations in Sheboygan, Wisconsin, have shown interest in continued growth with Cousins in both Wisconsin and the Chicagoland area.

New Limited-Time Pork Items

4.  At the start of May, Cousins Subs invited fans to “Go Hog Wild” with the release of the Cubano and Wisconsin BBQ Pork Sandwich. The Cubano, which is back by popular demand, features ham, genoa salami, pulled pork, Wisconsin Swiss cheese, mayo, brown mustard, sliced dill pickles, onions, and tomatoes on Italian bread. The Wisconsin BBQ Pork is a new sandwich featuring pulled pork slathered in Sweet Baby Rays BBQ sauce, Wisconsin cheddar cheese, crispy onions, and pickles on Italian bread.

5.  Cousins Subs is encouraging customers to show their love for the sandwiches on social media by using #GOHOGWILD. Both sandwiches will be available until July 31.

Redesigned Website

6.  In late April, Cousins Subs launched a new responsive consumer website to improve the guest experience online. The new website offers a more user-friendly experience through more dynamic features that reduce the number of navigation clicks and increase functionality in the areas of product information, online ordering, and restaurant information.

7.  Customers can visit the Cousins website from a PC, tablet, or mobile device to see the site’s new features, which include:

• Detailed nutrition information
• Improved order customization process
• Access to detailed product and restaurant information
• Efficient online ordering process
• Enhanced interactive experience – image-based, added video, and frequently updated stats

Partnered with Milwaukee Bucks to Support Local Food Pantries

8.  Last March, Cousins Subs locations in Wisconsin partnered with the Milwaukee Bucks to collect healthy nonperishable food items for 40 local Wisconsin food pantries through Cousin Subs’ second annual “Block Out Hunger” campaign.

9.  In addition to collecting food, for every Bucks blocked shot, Cousins’ Make It Better Foundation donated $45 to Hunger Task Force in honor of the franchise company’s upcoming 45th anniversary—a total that amounted to $19,665 by the campaign’s end.

10. Since the start of the Block Out Hunger campaign in 2015, Cousins Subs and the Milwaukee Bucks have raised a total of $29,665 and 10,137 pounds of food to support Hunger Task Force and pantries statewide.

11.  Cousins and the Bucks have chosen to work with Hunger Task Force because it is Milwaukee’s only Free & Local food bank, is Wisconsin’s leading anti-hunger organization, and has a strong network of partnering pantries.

Company History

12.  Cousins Subs was founded in 1972 by cousins Bill Specht and James Sheppard in Milwaukee, Wisconsin after the two were unable to find a suitable sub sandwich option in Milwaukee like they had when they lived in New Jersey. Soon after opening the first shop, Specht and Sheppard partnered with a local baker to make their own unique bread.

13.  Cousins Subs continued to expand throughout the Milwaukee area and began franchising in 1985. Although Cousins Subs has been in business for over 40 years, the company has mostly remained in Wisconsin with only a few locations outside of the state, particularly in Arizona.

14.  The sandwich chain is currently seeking new franchise units in other areas of the U.S. including Arkansas, Florida, Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Midwest, North Dakota, Oklahoma, South Dakota, and Texas.

15.  Today, there are over 80 franchised Cousins Subs locations in Wisconsin and Arizona and over 20 corporate-owned Milwaukee-area stores.

Entrepreneur’s Franchise 500

16.  Cousins Subs has appeared on Entrepreneur’s annual Franchise 500 list a few times in the past decade. The company’s highest rank was No. 384 in 2012, while its lowest rank was No. 483 in 2014.

Section II – Estimated Costs

• Please click here for detailed estimates of Cousins Subs franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Cousins Subs’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis