FDD Talk 2018: Which Wich Superior Sandwiches Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the Which Wich Superior Sandwiches franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Which Wich Superior Sandwiches franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Which Wich Superior Sandwiches franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Which Wich Superior Sandwiches 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 Which Wich Superior Sandwiches’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average weekly gross sales for the 401 franchised Which Wich Superior Sandwiches Stores open and operating on December 31, 2017, regardless of the length of time the Stores operated during the year, divided into 3 groups:  the 153 franchised Which Wich Stores with average weekly gross sales of $11,000.00 and higher; the 135 franchised Which Wich Stores with average weekly gross sales from $8,001.00 to $10,999.99; and the 113 franchised Which Wich Stores with average weekly gross sales from $0.00 to $8,000.99

• 2017 average weekly net sales, cost of goods sold, labor costs, and occupancy costs for the 123 franchised Which Wich Superior Sandwiches Stores open and operating in the United States at least one full calendar year from January 1, 2017 through December 31, 2017, and submitted profit and loss statements to the franchisor, divided into 3 groups:  the 58 franchised Which Wich Stores with average weekly gross sales of $11,000.00 and higher; the 50 franchised Which Wich Stores with average weekly gross sales from $8,001.00 to $10,999.99; and the 15 franchised Which Wich Stores with average weekly gross sales from $0.00 to $8,000.99

Section I – Background Information

22 Things You Need to Know About the Which Wich Franchise

Adds Eggwiches to Menus Nationwide

1.  Around mid-March 2018, Which Wich Superior Sandwiches launched its newest menu offering, Eggwiches. All three sandwiches in the new Eggwiches line feature a sunny side up egg.

2.  Jeff Sinelli, co-founder, CEO, and chief vibe officer of Which Wich, said, “It’s been our mission since opening our first Which Wich location to provide flavors and combinations you simply cannot get at another sandwich chain. A runny egg is the perfect complement to the bold ingredients we pile onto our wiches. We spent a lot of time in the R&D kitchen to create just the right balance and to get our process right. We’re excited for our guests to get the chance to bite into a warm, runny Eggwich.”

3.  At the time of the initial launch, Which Wich released three Eggwiches:

• The Brunchwich – Rotisserie roasted beef and lamb gyro slices, smoked thick-cut bacon, American cheese, fresh tomatoes, house-made Harissa mayo, and a sunny side up egg on a toasted baguette.
• Banh Mi – Soy glazed pulled pork, sliced cucumbers, pickled carrots, jalapenos, fresh cilantro, house-made Sriracha mayo, and a sunny side up egg on a toasted baguette.
• Cheeseburgerwich – Tender sirloin, smoked thick-cut bacon, American cheese, fresh tomatoes, caramelized onions, pickles, toasted sesame seeds, special sauce, and a sunny side up egg on a toasted baguette.

4.  In addition to the new Eggwiches, Which Wich added two new dessert options to its menu, Courtney’s Cakes and Courtney’s Cookies. Developed by and named after Courtney Sinelli, co-founder and executive vice president of Which Wich, Courtney’s Cakes include options for birthday cake with buttercream icing, chocolate cake with cream cheese icing, or carrot cake with cream cheese frosting; while Courtney’s Cookies are toffee-infused and full of rich chocolate chips and yellow M&M’s.

5.  Courtney Sinelli said, “We’re introducing such an amazing savory option with our Eggwiches that we knew we needed some sweet to balance it out. Our line of Courtney’s Cakes and our new Courtney’s Cookie are the perfect indulgent snack to treat yourself to or share with family or friends.”

Honors Military With 10th Annual Flag Your Bag Campaign

6.  Between Memorial Day 2018 and Independence Day, Which Wich Superior Sandwiches encouraged guests to help the company show appreciation for active and retired men and women of the armed forces with its annual Flag Your Bag campaign. This year, Which Wich aimed to collect 25,000 bags to surpass 100,000 bags donated since the beginning of the campaign a decade ago.

7.  Jeff Sinelli, Which Wich’s founder, CEO, and chief vibe officer, said, “This is a time of year when we reflect on the liberties and freedoms that we all enjoy and want to say thank you for the dedication and sacrifice of our armed services. They give so much to us and we are proud to give back to them with our Flag Your Bag campaign for a tenth year.”

8.  From May 28 to July 4, 2018, Which Wich customers were encouraged to write their own heartfelt messages to members of the military with red and blue Sharpies on the chain’s signature brown bags and hang them on each Which Wich location’s Community Wall. At the end of the program, representatives from the brand collected the bags decorated with messages of support, patriotic art, and notes of encouragement from Which Wich locations around the country and sent them to the company’s headquarters in Dallas. The bags were then filled with non-perishable donations and sent to active and veteran U.S. servicemen and women.

9.  According to the Department of Defense, there are 1.3 million men and women on active duty, 742,000 civilian personnel, with another 826,000 serving in the National Guard and Reserve forces. Which Wich is committed to providing those men and women with tokens of appreciation and support through Flag Your Bag. Franchisees all over the U.S. support the campaign, with individual Which Wich locations contributing as many as 2,000 bags to local military bases in previous years.

10.  Which Wich also supports members of the U.S. military through the International Franchise Association’s VetFran initiative, making all honorably-discharged veterans eligible for $10,000 off their initial franchise fee to open up their first Which Wich location. Veterans own Which Wich franchises across the country, including in Louisiana, Indiana, and Texas.

11.  David Thompson, director of construction for Which Wich and a retired Marine, said, “Veterans and those who are active and stationed in the U.S. love nice gestures. Usually a simple handshake or thank you is all they need to feel loved and supported, so the Flag Your Bag program has the power to not only make their day, but their month or even their year. I’ve seen guys frame the bags we give them and hang them in their homes. Giving the troops a bag with goodies might seem small, but in reality, it means so much to them. I’m truly honored to be a part of Which Wich and the Flag Your Bag program. As a veteran, it means the world to me to help our troops.”

Opens First European Location in London

12.  In late February 2018, Which Wich Superior Sandwiches opened its first European location in the United Kingdom. The opening marks the first of 10 stores set to open throughout the country within the next four years, with the expectation of reaching 100 locations in operation by 2028. The entry into London adds to Which Wich’s expansive global footprint with more than 500 stores open or in development in 40 states and 9 countries, including Saudi Arabia, Kuwait, Mexico, the United Arab Emirates, and Qatar.

13.  According to Jeff Sinelli, founder, CEO, and chief vibe officer of Which Wich, “London is a global hub and entry point into Europe. The opening of the first European location is a major milestone for Which Wich and we’re thrilled about the larger continental expansion that’s set to follow. London is known for its mix of cuisines, and we’re excited to bring a diverse variety of quality sandwiches and the unique Which Wich vibe to Londoners for the very first time.”

14.  The UK introduction is led by brothers Rami and Nader Awada of AAA Investment House who first fell in love with Which Wich in the United States and recognized a greater opportunity to bring customizable, hot sandwiches made with fresh ingredients to the people of London.

15.  Rami Awada said, “The vibe of Which Wich is like nothing else – it’s fun, creative and fresh. Londoners love their sandwiches, and the opportunity to introduce a brand which offers endless customization and locally-sourced ingredients coupled with an innovative ordering process is extremely exciting, and a concept we feel Londoners will fall in love with.”

16.  The London Which Wich location will feature classic Which Wich menu favorites, like the brand’s signature Wicked sandwich, alongside new additions that embody the vibrant cuisine found across London. A “Favourites” category will include the Chicken Tikka Wich, Loaded BBQ Pork Wich, Super-Veggie Wrap, and Banh Mi Wich. The “Premium” category will include the Cali Chicken Club Wich, Shrimp Po’ Boy Wich, Big Italian Meatball Wich, and Beef Mushroom Melt Wich.

17.  The London Which Wich will also offer a line of fries, with the option of either regular or sweet potato to pair with a variety of house dipping sauces. The restaurant will feature sautéed mushrooms and a homemade, gourmet coleslaw made in-house daily. Additionally, the London Which Wich will feature a breakfast menu with fresh poached eggs, wiches, and six artisan coffee options made from freshly-roasted beans delivered straight from their in-house bean roasters, as well as tea and hot chocolate.

18.  The Awadas have built an extensive network of UK-based sourcing partners specializing in artisan breads, meats, and cheeses. The location will also offer a unique “Grab and Go” section where busy professionals can quickly pick up soups, salads, various dips, and breakfast porridge.

19.  Sinelli said, “Several months of planning and preparation have all led up to the culmination of this major milestone for the brand. Interweaving the Which Wich vibe with the fast-paced, upscale London feel is exciting and we’re fully supportive of the Awada brothers as they continue this journey of developing the brand’s presence across the UK and spur further development throughout Europe.”

Company History

20.  Which Wich Superior Sandwiches was founded in downtown Dallas, Texas in 2003 by Jeff Sinelli, founder and CEO of the quick-service restaurant chain Genghis Grill. The sandwich chain is known for its unique ordering system, in which customers use red Sharpie markers to fill out pre-printed menus on sandwich bags. Following the success of the first Which Wich store, franchising started in 2005 when the first franchised location opened in another part of Dallas.

21.  By 2010, there were 100 Which Wich stores open. A few years later, Which Wich opened its first international locations in Dubai, Mexico, and Panama. Around this same time, Which Wich opened its 250th store. Since then, Which Wich has continued to expand around the world.

Entrepreneur’s Franchise 500

22.  Which Wich ranked No. 204 on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Superior Sandwiches 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 Superior Sandwiches’ 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

Franchised

2015

• Outlets at the Start of the Year:  317
• Outlets at the End of the Year:  356
• Net Change:  +39

2016

• Outlets at the Start of the Year:  356
• Outlets at the End of the Year:  390
• Net Change:  +34

2017

• Outlets at the Start of the Year:  390
• Outlets at the End of the Year:  401
• Net Change:  +11

Company-Owned

2015

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  3
• Net Change:  -1

2016

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2017

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  10
• Net Change:  +7

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

Part 1 – Average Weekly Gross Sales for Franchised Stores

• The Gross Sales information below is provided by all 401 franchised Stores open and operating in the United States on December 31, 2017, regardless of the length of time the Stores operated during the year (“Franchised Stores”).

• The franchisor obtained the Gross Sales information from point of sale polling and franchisee reports. This information has not been audited or otherwise verified by the franchisor.

• The information is separated into three categories based on Gross Sales:

• Category A Stores are Franchised Stores with average weekly Gross Sales of $11,000.00 and up;
• Category B Stores are Franchised Stores with average weekly Gross Sales from $8,001.00 to $10,999.99; and
• Category C Stores are Franchised Stores with average weekly Gross Sales from $0.00 to $8,000.99.

• For each category, the franchisor provides:

• (i) the range of Gross Sales for each category and the number of Franchised Stores in the category (and the percent of all Franchised Stores those Franchised Stores represent);
• (ii) the average weekly Gross Sales for all Franchised Stores in the category;
• (iii) the number of Franchised Stores that performed above the average weekly Gross Sales for the category (and the percent of the number of Franchised Stores in that category those Stores represent); and
• (iv) the median amount of Gross Sales for all Franchised Stores included in the category.

• Since the financial performance representation below includes only Gross Sales information, this information does not reflect cost of sales, operating expenses, or other costs or expenses, such as royalty payments and advertising expenditure requirements, that must be deducted from Gross Sales figures to obtain your net income or profit.

• Some Stores have sold this amount. Your individual results may differ. There is no assurance that you will sell as much or that your costs will be the same.

Category A Stores:  Average Weekly Gross Sales of $11,000.00 and Higher