Mike Andes reviews a Subway franchise for sale in North Carolina claiming $346,000 revenue and $113,000 profit, a 30% margin he finds hard to believe. The seller's numbers omit major expenses like rent, insurance, franchise fees, and payroll, making the financials look suspiciously incomplete.
This Subway shop in North Carolina is for sale for $199,000. They say they do revenues of 346,000 and profit 113,000. I smell something fishy here because they're saying they have a 30% profit margin. And in fast food and Subway franchises, 30% profit margin is almost unheard of. Now, they have low rent, which I like, and they have an established franchise brand name like Subway, which is always a positive. But they have four employees. So let's go ahead and break this down. If they expect us to believe that they have a 30% profit margin, let's assume the other 30% consists of food costs and the other 40% the employees. What that means is where is the cost of rent, insurance, marketing, franchise fees? Just the franchise fees and the marketing co op from subway could be 10 to 15%. But I think there's something fishy here and I don't believe their profits are accurate.
