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Profitable West Michigan Sub Shop Franchise Resale

SEPTEMBER 17, 2021

This is your opportunity to own a Grand Rapids location of a successful sub shop franchise. With over 300 shops across 15 states, this franchisor has a sound proof of concept and history for you to leverage.

The current owner has chosen to relocate to be closer to their multiple locations in another market. This move has triggered the sale of this single Grand Rapids (MI) location.

The Grand Rapids store has operated successfully for 10 years in a newer, fully leased strip mall. The shop, with 1900 square feet, occupies the end cap closest to the entrance off a major city street. There is ample parking at the door. The sub shop is located literally one minute from both a large suburban high school and an interchange on a major freeway. It doesn’t get any better than this.

Growing each year, the business had $570,000 in revenues in 2018, $620,000 in 2020, and a forecasted store record of $700,000 in 2021. And SDE (seller’s discretionary earnings – the cash flow available to pay the buyer and service debt) has kept pace with revenues. SDE has ranged from $113,000 in 2018 to $170,000 in 2020.

The franchisor has laser focus on food quality and franchisee support. In fact there is only a single company owned unit in the entire system. Fortunately for Praxis Business Brokers, the Grand Rapids store is conveniently located near our main office, and as such we frequently bring in subs for lunch meetings. I am pleased to report that we have always been delighted with our sub lunches.

The franchise fee for development of new stores is $25,000 with a lesser amount (which will generously be paid by the seller) for franchise resales. This shop is the only Grand Rapids location, and the seller and franchisor alike feel the Grand Rapids territory can easily handle several more stores which should appeal to a growth minded buyer.

Despite the lack of instore dining for the past year (+), the shop, aided by embracing Grub Hub as a third-party delivery service, has continued its record revenue levels. With restrictions lifting, the shop is returning to its historical seating for 54 diners. The store’s location is in a vibrant commercial area with nearby middle class housing developments, both of which bode well for future revenue streams.

The business is being offered for $424,000 which represents a 2.95x SDE and includes (a) all fixed assets ($145,000 on a cost basis), (b) approximately $10,000 of inventory, (c) the franchise transfer fee, (d) comprehensive training by the franchisor, (e) store specific training by the seller, and (f) a mid-five figure seller note.

To learn more about this attractive, cash-flowing sub shop, please contact Ryan Johnson ([email protected])

Contact information

Ryan Johnson
Asking $424,000
Cash flow $144,000
Gross $630,000
Reference ID RJ1091721