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 2021 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 2021 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 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Erbert & Gerbert’s Sandwich Shop’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, median, high, and low annual revenues for the top tier, mid tier, and lower tier of the 40 franchised Erbert & Gerbert’s Sandwich Shop outlets that were open for all 12 months during the 2020 calendar year

• 2020 average, median, high, and low annual food cost for the top tier, mid tier, and lower tier of the 40 franchised Erbert & Gerbert’s Sandwich Shop outlets that were open for all 12 months during the 2020 calendar year and who delivered financial reports to the franchisor showing food costs

Section I – Background Information

12 Things You Need to Know About the Erbert & Gerbert’s Sandwich Shop Franchise

Awards Triple Points to Rewards Members on National Sandwich Day

1.  At the end of October 2020, Erbert & Gerbert’s Sandwich Shop announced that it would be holding a Triple Points offer on November 3, 2020 when customers could earn triple points on everything by downloading the Erbert and Gerbert’s app. Customers could simply download the app and order from their rewards account on National Sandwich Day, November 3, 2020, to automatically earn triple the points.

2.  Loyalty customers receive ½ off a sandwich once they join, and earn points every day of the year on their orders. Once customers bank 50 points, they get $5 to use toward an order. Loyalty customers also have access to exclusive rewards-only offers.

Ensuring Safety While States Open Up Dining

3.  On June 1, 2020, Erbert & Gerbert’s Sandwich Shop released a statement discussing the brand’s plans for handling re-opening. Erbert & Gerbert’s said that customer safety was its top priority and that the brand took its time to establish an ordering and dining experience to keep everyone safe. The company implemented the following procedures:

4.  Continued Best Practices for Sanitation and Training – Erbert & Gerbert’s has always imposed stringent sanitation and food safety procedures. Many of its procedures go beyond what is enforced by health authorities. In addition, the company has retrained all team members with these procedures, posted additional health and hygiene practice reminders, increased sanitization frequency throughout the store, and added hand sanitizer for customer use. Erbert & Gerbert’s similarly provided training and resources to heighten awareness of health and safety best practices so the brand can do its part to reduce the spread of COVID-19. Depending on local regulations, fountain soda machines may be closed and team members may be wearing masks.

5.  Social Distancing Reminders – Erbert & Gerbert’s has included social distancing reminders throughout its stores to ensure customers are able to stay a safe distance from other customers, and closed off any tables to comply with capacity restrictions and social distancing mandates. There may be plexiglass barriers and separate entrances and exits or guest flow guidance to avoid bottlenecks.

6.  Delivery and Pickup – Erbert & Gerbert’s has expanded its delivery and pick-up capabilities via the brand’s website and mobile app to meet the need. Team members will deliver to households or places of work with contact-free delivery on request with a securely closed sandwich bag.

7.  On a final note, Erbert & Gerbert’s said, “This has unfortunately increased the distance we are from each other, but it has also allowed us to focus on what’s most important to our operations – keeping our team members, our customers, and your families safe. Please be assured we are taking all steps necessary to ensure a safe and secure experience when ordering from Erbert and Gerbert’s. Be Bold. Be Safe.”

Company History

8.  Erbert & Gerbert’s Sandwich Shop was founded in 1988 by Kevin Schippers and his wife Beth in Eau Claire, Wisconsin. The Schippers chose to open a sandwich shop because the area did not have a good specialty sandwich shop. The name and theme of the sandwich shop come from Kevin Schippers’ childhood. Schippers’ father made up elaborate bedtime stories called the Adventures of Erbert & Gerbert Herbert. Through the stories, Schippers’ father taught his kids about science, history, adventure, and being a good friend.

9.  Following the success of the first Erbert & Gerbert’s Sandwich Shop, the Schippers opened a second location in 1990. Two years later, the Schippers began franchising the Erbert & Gerbert’s Sandwich Shop concept and opened locations primarily around Minnesota and Wisconsin.

10.  In 2003, Kevin Schippers decided to pursue a career in ministry work and the Schippers sold the company to investors led by primary owner Eric Wolfe. However, the Schippers continue to own and operate the original Erbert & Gerbert’s.

11.  Today, Erbert & Gerbert’s Sandwich Shop is still a fairly small franchise, with locations in Arizona, Colorado, Georgia, Indiana, Iowa, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. The sandwich shops are typically located near college campuses.

Entrepreneur’s Franchise 500

12.  Erbert & Gerbert’s Sandwich Shop did not rank on Entrepreneur’s 2021 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 2021 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  95
• Outlets at the End of the Year:  88
• Net Change:  -7

2019

• Outlets at the Start of the Year:  88
• Outlets at the End of the Year:  90
• Net Change:  +2

2020

• Outlets at the Start of the Year:  90
• Outlets at the End of the Year:  73
• Net Change:  -17

Company-Owned

2018

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  3
• Net Change:  -2

2019

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  2
• Net Change:  -1

2020

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  3
• Net Change:  +1

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• Erbert & Gerbert’s financial performance representation consists of two parts. Part 1 presents the actual 2020 annual revenues of the 40 franchised outlets that were open for all 12 months during the 2020 calendar year. These 40 outlets represent approximately 55% of the 72 total franchised outlets that were open as of December 31, 2020.

• Franchised outlets that were not open for the entire 12 months of 2020 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 performance representation is no indication of what a Non-Traditional Location outlet may experience.

• Part 2 presents the actual 2020 food costs of the 40 franchised outlets that were open for all 12 months during the 2020 calendar year and who delivered financial reports to the franchisor showing food costs. These 40 outlets represent approximately 55% of the 72 total franchised outlets that were open as of December 31, 2020.

• 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.

• 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, 2020 – December 31, 2020) for Franchised Outlets Open All 12 Months

Top Tier

• Number of Outlets:  14
• High Annual Revenue:  $1,467,788
• Low Annual Revenue:  $628,768
• Median Annual Revenue:  $778,837
• Average Annual Revenue:  $825,946
• Number At or Above Average:  5
• Percentage At or Above Average:  36%

Mid Tier

• Number of Outlets:  13
• High Annual Revenue:  $627,449
• Low Annual Revenue:  $485,743
• Median Annual Revenue:  $511,141
• Average Annual Revenue:  $523,417
• Number At or Above Average:  5
• Percentage At or Above Average:  38%

Lower Tier

• Number of Outlets:  13
• High Annual Revenue:  $466,592
• Low Annual Revenue:  $264,063
• Median Annual Revenue:  $423,551
• Average Annual Revenue:  $392,583
• Number At or Above Average:  9
• Percentage At or Above Average:  64%

Part 2 – Annual Food Cost (January 1, 2020 – December 31, 2020) for Franchised Outlets Open All 12 Months

Top Tier

• Number of Outlets:  14
• Low Annual Food Cost:  23.53%
• High Annual Food Cost:  26.07%
• Median Food Cost:  24.68%
• Average Food Cost:  24.87%
• Number At or Above Average:  8
• Percentage At or Above Average:  57%

Mid Tier

• Number of Outlets:  14
• Low Annual Food Cost:  26.19%
• High Annual Food Cost:  27.65%
• Median Food Cost:  26.70%
• Average Food Cost:  26.79%
• Number At or Above Average:  8
• Percentage At or Above Average:  57%

Lower Tier

• Number of Outlets:  13
• Low Annual Food Cost:  27.88%
• High Annual Food Cost:  32.69%
• Median Food Cost:  28.82%
• Average Food Cost:  29.24%
• Number At or Above Average:  8
• Percentage At or Above Average:  62%

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