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

• Section I – Background information on the PrimoHoagies franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a PrimoHoagies franchise, based on Item 7 of the company’s 2019 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a PrimoHoagies franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned PrimoHoagies outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of PrimoHoagies’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average and median gross sales for the 74 franchised PrimoHoagies locations that were open and paid royalties for the entire period between January 1, 2018 and December 31, 2018

• 2018 average and median cost of all provisions, cost of bread, cost of beverages, and costs of chips, as a percentage of gross sales, for the 74 franchised PrimoHoagies locations that were open and paid royalties for the entire period between January 1, 2018 and December 31, 2018

Section I – Background Information

17 Things You Need to Know About the PrimoHoagies Franchise

Appoints New VP of Marketing and VP of Development

1.  In mid-March 2018, PrimoHoagies made changes to its executive leadership team in an effort to bolster national expansion. PrimoHoagies hired Derik Beck as vice president of marketing and Adam Biedenbender as vice president of development specializing in franchise development.

2.  Rocco Fiorentino, president and CEO of PrimoHoagies, said, “We have tapped Derik and Adam to join the Primo team to help expand our brand and bring additional support to our franchisees. PrimoHoagies is built on the quality and consistency that our fans have come to expect, and we want to bring that same sense to how we brand our company and support our franchisees.”

3.  Beck comes to PrimoHoagies with a long leadership background in digital marketing promotion and strategic planning for companies like Cottman Transmission and Total Auto Care, AAMCO, New Holland Agriculture, and Mack Trucks, Inc.

4.  “I am so excited to be part of the Primo team,” said Beck. “I hope to invigorate everyone on the team from management to the franchisees and their staff so we are always making a great first impression and providing an amazing customer experience.”

5.  Biedenbender joins the PrimoHoagies team with an extensive background in franchise multi-unit development. He is well known throughout the franchise industry for creating strong relationships with franchisees and identifying great partners for franchise expansion. Biedenbender has worked with several prominent franchise organizations around the country, including Rita’s Water Ice, Dunkin’ Donuts, Quiznos, RE/MAX, Smashburger, and Papa Murphy’s.

6.  According to Biedenbender, “I’ve been a fan of Primo since I first moved to Philly in 2003. It’s really great to see the strides they have made in the Philadelphia market since then. When the opportunity came up to help the brand grow the business outside of the Philadelphia market, I jumped at the chance. When you have a product as good as PrimoHoagies with such a solid business model, it’s hard not to be excited about its potential growth. I can’t wait for the rest of the country to try this sandwich and to grow the brand to its potential.”

7.  Looking to the future, Beck is charged with increasing Primo’s online presence, increasing same-store sales, and improving the PrimoHoagies distribution process throughout the United States. He will also concentrate on expanding the brand using his unique social media strategies. Together, Beck and Biedenbender will build franchisee relations and support the marketing efforts of each individual franchise.

Targets Atlanta for Expansion

8.  In early August 2018, PrimoHoagies announced that it had signed an agreement with Brian Ottaviano for the Atlanta area. At the time of the announcement, Ottaviano planned to open his PrimoHoagies location in Atlanta in the fall of 2018. The new franchise location will be the first PrimoHoagies in Georgia and will be the first of three units that Ottaviano will be opening in the area.

9.  Ottaviano’s background in business and his roots in Philadelphia prepare him well for his new role with PrimoHoagies. Ottaviano and his business partners will be managing daily operations. Rocco Fiorentino, president and CEO of PrimoHoagies, said, “We’re proud to have Brian join our team, as he will be a great asset to our brand.”

10.  Adam Biedenbender, vice president of development for PrimoHoagies, added, “The Atlanta market will soon be able to take a bite into our tradition and become part of the buzz that has taken over the East Coast since the start of the company. We can’t wait to see the lines form at Brian’s store.”

11.  PrimoHoagies, building on the momentum from 2017, signed two multi-unit deals in Charleston and North Jersey, and a single-unit deal in Bel Air, Maryland in early 2018. At more than 90 locations across eight states (at the time of the announcement), the new locations bring excitement and authenticity to several more communities.

12.  Ottaviano added, “When we began to research different franchise opportunities, we were looking for a unique concept with a rich tradition that had the ability to bring people together. We found our perfect fit with PrimoHoagies. Nothing beats serving up a classic Italian staple that anyone can enjoy.”

Launches Hoagie-Flavored Chips for National Potato Chip Day

13.  In early 2019, PrimoHoagies announced that it was celebrating National Potato Chip Day on March 14, with the launch of its own Italian hoagie-flavored potato chips. The chips are custom made for PrimoHoagies after six months of research and development. The chips feature Italian hoagie spices with notes of sesame and PrimoHoagies’ signature meats and cheese – including prosciutto, provolone cheese, hot capicola, and natural casing genoa salami.

14.  Before launching the hoagie-flavored chips at all of its restaurants, PrimoHoagies held a soft launch at participating locations during this year’s Super Bowl. The chips will also be available at select grocery stores, drug stores, convenience stores, and independent liquor stores.

Company History

15.  PrimoHoagies was founded in 1992 by Richard and Colleen Neigre in South Philadelphia, Pennsylvania. The Neigres knew that the hoagie or sub sandwich market in Philadelphia was saturated, so they set out to make a superior product. Using gourmet meats and cheeses and baking bread every two hours paid off and the first PrimoHoagies shop was a hit with locals.

16.  After opening a few corporate-owned locations around the Philadelphia area, PrimoHoagies launched its franchising program in 2002. At that time, the company moved its headquarters from Philadelphia to Westville, New Jersey. Today, there are PrimoHoagies locations in eight states, including Pennsylvania, Delaware, New Jersey, Maryland, South Carolina, Florida, Georgia, and Virginia.

Entrepreneur’s Franchise 500

17.  PrimoHoagies did not rank on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of PrimoHoagies franchise costs, based on Item 7 of the company’s 2019 FDD.

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

• Please click here for detailed information on PrimoHoagies’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year:  87
• Outlets at the End of the Year:  88
• Net Change:  +1

2017

• Outlets at the Start of the Year:  88
• Outlets at the End of the Year:  84
• Net Change:  -4

2018

• Outlets at the Start of the Year:  84
• Outlets at the End of the Year:  85
• Net Change:  +1

Company-Owned

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  1
• Net Change:  +1

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  1
• Net Change:  +1

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Average and Median Annual Gross Sales

• The table below provides the average and median annual gross sales for the 74 franchised locations that were open and paid royalties for the entire period between January 1, 2018 and December 31, 2018 (the “Designated Restaurants”).

• As of December 31, 2018, there were 86 total restaurants open and operating.

• The Designated Restaurants do not include the 1 restaurant that was owned by PrimoHoagies’ affiliate PHAC1 as of December 31, 2018.

• PrimoHoagies has also excluded: (i) 7 restaurants that are located in seasonal beach locations and, therefore, either close or reduce their hours for significant portions of the year;

• (ii) 2 restaurants that opened during the previous calendar year and therefore were not open for the entire period between January 1, 2018 and December 31, 2018; and

• (iii) 2 restaurants that were remodeled during 2018 and were closed for a significant portion of the measurement period.