In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Erbert & Gerbert’s Sandwich Shop franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for an Erbert & Gerbert’s Sandwich Shop franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Erbert & Gerbert’s Sandwich Shop franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Erbert & Gerbert’s Sandwich Shop outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Erbert & Gerbert’s Sandwich Shop’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 average, median, high, and low annual revenues for the top tier, mid tier, and low tier of the 60 franchised Erbert & Gerbert’s Sandwich Shop businesses that were open for all 12 months during the 2017 calendar year
- 2017 average, median, high, and low annual food cost for the top tier, mid tier, and low tier of the 44 franchised Erbert & Gerbert’s Sandwich Shop businesses that were open for all 12 months during the 2017 calendar year and who delivered financial reports to the franchisor showing food costs
Section I – Background Information
16 Things You Need to Know About the Erbert & Gerbert’s Sandwich Shop Franchise
On Track to Become One of the Fastest-Growing Sandwich Chains in the United States
1. In recent years, Erbert & Gerbert’s Sandwich Shop has grown in number of units and, according to the company, is poised to become one of the fastest-growing sandwich chains in the U.S. The company’s momentum is being driven by president and CEO Eric Wolfe who made some key changes within the organization. Among the changes was bringing aboard, in late 2017, Jeremy Burke, who led design and strategic direction for Buffalo Wild Wings for a decade.
2. Wolfe said, “We are doing both traditional and nontraditional sites such as our Minnesota Zoo and General Mills locations. We are looking for franchisees to partner with who really get the business. Savvy investors and multi-unit restaurant operators appreciate the difference between us and other sandwich shops.”
3. After Burke joined Erbert & Gerbert’s, he partnered with new L.A.-based ad agency, Party Land, led by former Arby’s “We Have the Meats” creative director and writer Matt Heath. Along with his two partners, creative director Matt Rogers and former K-Swiss president David Nichols, Heath’s shop is hitting the ground running on a roster of eclectic brands such as Erbert & Gerbert’s Sandwich Shop.
4. Heath added, “We’ve got big plans for E&G’s. They’re a true product innovation brand, which is really exciting in an industry that’s full of brands with more functional positioning like fast delivery or crispier lettuce. We get to appeal to our audience in a much more emotional, visceral way. It’s going to be a lot of fun helping Erbert & Gerbert’s take their legacy and new sandwich flavors to the next level.”
5. Along with the addition of Party Land to the team, Burke has also brought aboard USIM, the fast-growing independent media agency that provides integrated media solutions. Also Los Angeles-based and led by chairman and CEO Dennis Holt, the group will handle E&G’s media efforts with a primary focus on digital services, working on both national messaging and across the chain’s local cooperative franchise groups.
6. According to Burke, “Lots of fun, growth and new flavors coming as part of our new ‘Bold Between the Breads’ brand campaign. This is an exciting brand with a lot of R&D on new, great tasting sandwiches always appearing. Our newest one will be the Caribbean Sriracha Chicken Sandwich and it’s going to be a flavorful adventure, just like Erbert & Gerbert’s Sandwich Shops.”
Launches “Almost Free Sandwich Day”
7. At the end of October 2018, Erbert & Gerbert’s Sandwich Shop announced that it would be holding an “Almost Free Sandwich Day” on November 3, where customers could enjoy 50 percent off sandwiches between 2:00 and 6:00 pm. November 3 is National Sandwich Day and Erbert & Gerbert’s once again participated with its “Almost Free Sandwich Day.”
8. Some of the sandwiches that customers could enjoy on November 3 were the Spartan, which features chicken, cherrywood smoked bacon, and Peppadew mustard; and the Quatro, which features chicken and bacon, as well as cranberry wasabi that combines the tangy sweetness of cranberries with the heat of horseradish.
Celebrating 30th Anniversary
9. This year, 2018, marks the 30th anniversary of Erbert & Gerbert’s Sandwich Shop. The franchise hit a major milestone in late 2017 with the opening of its 100th location and continues to grow across the country. To celebrate the brand’s 30th birthday, Erbert & Gerbert’s is offering special deals for customers.
10. According to president and CEO Eric Wolfe, customers should be on the lookout for trivia games based on the stories that inspired the Erbert & Gerbert’s Sandwich Shop founders, the Schippers family; and scratch-off coupons that can win customers some free food.
11. Erbert & Gerbert’s also launched a contest in early May until June 24, where customers could win free sandwiches for a year. To participate in the contest, customers received a scratch-off coupon for any combo meal. Thirty lucky customers won the grand prize of free sandwiches for a year.
12. The first Erbert & Gerbert’s Sandwich Shop was opened in 1988 by Kevin and Beth Schippers in Eau Claire, Wisconsin. The Schippers developed the concept for the sandwich shop the year before and based its name on the stories that Kevin’s father told him throughout his childhood.
13. The stories revolved around two boys named Erbert & Gerbert Herbert who traveled through time and space learning about science, history, and how to be a good friend. The Schippers decided to name each of the sandwiches after characters that Erbert and Gerbert met throughout their travels.
14. In 1990, the Schippers opened a second Erbert & Gerbert’s corporate location in St. Cloud, Wisconsin. The Schippers grew their executive team and decided to start franchising the Erbert & Gerbert’s Sandwich Shop concept. The first franchised shop opened in 1992 in Duluth, Minnesota.
15. Over the next decade, Erbert & Gerbert’s continued to expand in Wisconsin, Minnesota, and North Dakota. In 2003, Eric Wolfe, who is now the company’s president and CEO, purchased Erbert & Gerbert’s Sandwich Shop from the Schippers. Today, Erbert & Gerbert’s Sandwich Shop has locations across 16 states, mainly in areas near college campuses.
Entrepreneur’s Franchise 500
16. Erbert & Gerbert’s Sandwich Shop ranked No. 312 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Erbert & Gerbert’s Sandwich Shop franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Erbert & Gerbert’s Sandwich Shop’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 79
- Outlets at the End of the Year: 86
- Net Change: +7
- Outlets at the Start of the Year: 86
- Outlets at the End of the Year: 93
- Net Change: +7
- Outlets at the Start of the Year: 93
- Outlets at the End of the Year: 95
- Net Change: +2
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 3
- Net Change: +2
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 4
- Net Change: +1
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 5
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
- Erbert & Gerbert’s financial performance representation consists of two parts. Part 1 presents the actual 2017 annual revenues of the franchised Erbert & Gerbert’s Restaurants that were open for all 12 months during the 2017 calendar year.
- Part 2 presents the actual 2017 food costs of the franchised Erbert & Gerbert’s Restaurants that were open for all 12 months during the 2017 calendar year and who delivered financial reports to the franchisor showing food costs.
- Franchised outlets that were not open for the entire 12 months of 2017 have been excluded from the representation as their partial year performance is not indicative of the performance the franchisor would reasonably expect to see over an entire calendar year.
- This financial performance representation is based on the reports submitted to the franchisor by its franchisees. This information has not been audited and may not be based on generally accepted accounting principles.
- All figures are based on full-service outlets. No Non-Traditional Location outlet’s performance is included. This performance representation is no indication of what a Non-Traditional Location outlet may experience.
- The actual average annual revenue numbers do not reflect the costs of goods sold, operating expenses, or other costs or expenses that must be deducted from revenue to obtain net income or profit.
Part 1 – Annual Revenues (January 1, 2017 – December 31, 2017) for Franchised Restaurants Open All 12 Months