SUBWAY Franchise Horror Stories: How Not to Become One.
October 10, 2012
SUBWAY franchise horror stories are not that hard to find. If you’re thinking of buying an existing Subway franchise, following a few common sense insider tips can keep you from becoming one more cautionary tale.
Heard any good Subway franchise resale horror stories lately?
If not, here are a few for you:
> A buyer decides to purchase an existing Subway franchise without getting professional advice. He overpays for the store by approximately $60,000. When his cash flow cannot support him or his debt service, he asks a business broker to sell it for what he paid for it (ie, find another sucker to stick it with). The broker refuses to list it, as it’s clearly overpriced.
> A seller assures the buyer not to worry about the franchisor’s remodel requirement. It will be very cheap, he says. He had a friend who just remodeled his store for $15,000, he says. When the time comes to remodel, the price tag is $60,000. The new buyer is stuck, as he the remodel is required in his agreement.
> A seller assures the buyer not to worry about a new Subway store opening in the same market. “It won’t affect you at all,” he says. Once the nearby Subway opens his sales drop 30%. If he wants to sell, his asking price will be determined by the lower sales volume.
> A buyer purchases a Subway restaurant from his uncle. The uncle claims cash flow will be 25% of sales. The new buyer learns that cash flow is actually 12% of sales, and that his rent is too high. He tries to sell, but cannot get near what he paid for it.
> A buyer contacts an experienced consultant and tells him he has the “combo report” from the Subway he’s thinking of buying. The consultant offers to analyze the report and advise him on the health of the franchise location for somewhere between $495 – $995. The buyer balks at paying for advice, then invests $100,000 – $150,000, takes out a loan with a personal guarantee and signs a long-term lease. UnhappyFranchisee.Com awaits his arrival and participation.
Are you familiar with the SUBWAY franchise opportunity? Please share a comment below.
5 Things You Should Know Before Buying a Subway Franchise
Fayaz Karim (BSc, MBA, CA), is a franchise consultant, broker and Subway specialist with 25 years of experience.
He also publishes the Mr. Franchise Man website, and contributed the horror stories above.
We asked Mr. Franchise Man Fayaz Karim to share the 5 things every Subway franchise resale buyer should know.
Here they are:
1. You must know if the price you are paying is a fair price and the only way to find that out is with a Valuation or a second opinion from an industry expert. To give you an example: I had a call from an unknown person who said he had found a store with weekly sales of $2700 and a rent of $2000 a month, should he buy it? I did not need much more information. I said “run” and do not waste your time.
2. Make sure you know what the estimate is for a remodel if it is coming up in 12 months. It could be $6,000 or $30,000. You don’t need a surprise. Better still, get the seller to do it before transferring the store to you.
3. Calculate cash flows accurately and consider all expenses, even the pest control charges and costs for uniforms.
4. Ask for the COMBO sales report and get someone independent to interpret it for you. This is the most crucial report for analysis. It is like a blood test is to a doctor – he knows what it all means and can diagnose a sickness and order further tests to judge the health of the store.
5. Ask if there is another Subway store opening nearby in the future that could affect your sales and profitability.
According to Fayaz, most Subway owners, by and large, are happy. The fact that there are relatively few existing stores for sale, he contends, is proof of that.
However, Fayaz also acknowledges that many sad stories arise out of mistakes buyers make when getting into the system, such as the lack of due diligence, erroneous assumptions and cash flows, and overpayment for stores in a desperation to get in the Subway system.
He also states “There is no doubt that the ‘culture’ at Subway can be Gestapo-like, but it is not so everywhere; only in isolated areas and instances… The main question is how much of this ‘culture’ are you willing to put up with and for how long while you are making money?
“Why are there over 8000 franchisees in the system, and why are they yearning for and buying more stores?
“If the system was that bad, many more would be bailing out. Not so.
Thanks to Fayaz Karim for sharing his insights and advice on buying a Subway franchise.
Also read:
SUBWAY: What Do Franchisees Make on $5 Footlongs?
Are SUBWAY Franchise Owners Happy?
SUBWAY: Send Jared to Gitmo! Parody Press Release
ARE YOU A SUBWAY FRANCHISE OWNER OR FORMER FRANCHISEE? ARE YOU FAMILIAR WITH THE SUBWAY FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
TUBBY’S Franchise Owner Arrested for Attempted Bomb-Making
September 10, 2012
TUBBY’S Franchise Owner Arrested for Attempted Bomb-Making.
Alaa Manuel Qasawa of West Bloomfield, MI, the franchise owner of a Lake Orion Tubby’s Sub Shop, faces federal charges after an FBI investigation and raid at the Tubby’s Wednesday.
According to a report in the Oakland Press, the FBI had several conversations with a witness who spoke directly with Alaa Manuel Qasawa about purchasing blasting caps and other bomb-making components.
The Oakland Press story states:
Agents concluded from the calls that Qasawa already possessed explosives, including an M228 — which is a pyrotechnic delay igniting fuse used in conjunction with an M69 grenade body…
The FBI said they concluded Qasawa — who is not licensed to have explosives by the Bureau of Alcohol, Tobacco, Firearms and Explosives or the Oakland County Sheriff’s Office — is attempting to manufacture explosive devices.
Customers and Tubby’s franchise executives were surprised by the allegations made against Alaa Manuel Qasawa:
“Tubby’s is surprised and shocked by this development, given Mr. Qasawa’s history as a good franchisee/store operator,” stated CEO of Tubby’s Grilled Submarines. “Should there be substance to the allegations leveled against Mr. Qasawa, Tubby’s will take all actions necessary to protect its brand and reputation.”
Tubby’s has 65 franchised locations in Michigan.
ARE YOU AN TUBBY’S FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH ALAA MANUEL QASAWA?
SHARE A COMMENT BELOW.
OBEE’S SOUP SALAD SUBS Franchise Complaints
July 13, 2012
What happened to Obee’s Soup Salad Subs and Peter Brown?
The Obee’s Soup Salad Subs franchise has a shockingly high SBA loan default rate of 64%.
Are you familiar with the Obee’s Soup Salad Subs franchise opportunity? Please share a comment below.
According to the Small Business Administration, Camille’s Sidewalk Cafe franchisees have received 46 SBA-guaranteed loans to date; more than half of those loans have been defaulted on by Obee’s franchise owners.
The Obee’s Soup Salad Subs Franchise has a failure rate of 64% for SBA-backed franchise loans
It’s likely that Obee’s franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and more than half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Obee’s Soup Salad Subs franchise opportunity?
What do you think accounts for the SBA loan failure rate of Obee’s Soup Salad Subs franchise owners?
What steps should Obee’s and Peter Brown have taken to stop franchise failures?
There aren’t many discussions about Obee’s online, but Guest commented on BlueMauMau.org:
They Suck
I would not ever buy one of the Franchises, I have friends who did and they lost everything, Peter Brown is a big fat LIER!!!!
Guest 2 wrote:
Obees
I agree they SUCK what an a-hole Peter Brown if anyone has any contact info for him I please send it to me.
Please share a comment, opinion or insight below.
ARE YOU A OBEE’S SOUP SALAD SUBS FRANCHISE OWNER OR FORMER OBEE’S FRANCHISEE? ARE YOU FAMILIAR WITH THE OBEE’S FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Obee’s Soup Salad Subs, Obee’s Soup Salad Subs franchise, Obee’s franchise, Obee’s failures, Obee’s lawsuits, soup franchise, Obee’s Soup Salad Subs complaints, Obee’s complaints, fast casual franchise, café franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information, Peter Brown
CAMILLE’S SIDEWALK CAFE Franchise Complaints
July 13, 2012
The Camille’s Sidewalk Cafe franchise has a shockingly high SBA loan default rate of 58%.
Are you familiar with the Camille’s Sidewalk Cafe franchise opportunity? Please share a comment below.
Camille’s Sidewalk Café franchise is owned by Beautiful Brands, franchisor of the Freshberry and Rex’s Chicken franchises. (Also read: BEAUTIFUL BRANDS Franchise Complaints) It was founded by Camille and David Rutkauskas.
According to the Small Business Administration, Camille’s Sidewalk Cafe franchisees have received 66 SBA-guaranteed loans to date; more than half of those loans have been defaulted on by Camille’s Sidewalk Cafe franchise owners.
The Camille’s Sidewalk Cafe Franchise has a failure rate of 58% for SBA-backed franchise loans
Camille’s Sidewalk Café franchise website lists 32 US locations currently open. It claims “With hundreds territories in development worldwide Camille’s Sidewalk Cafe continues to grow…”
What Camille’s Sidewalk Café doesn’t mention is that it’s likely that Camille’s Sidewalk Café franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and more than half were unable to repay those franchise loans… despite serious incentive to do so.
The Camille’s U.S. franchise network has shrunk 60% since 2008
In 2007, Beautiful Brands claimed that it had 100 Camille’s Sidewalk Cafés open and “more than 800 franchise agreements worldwide.”
The Camille’s Sidewalk Café 2011 Franchise Disclosure Document (FDD) indicates that in the beginning of 2008 there were 81 Camille’s franchises open in the U.S..
By the end of 2010, that number had dropped to just 41 U.S. franchises.
As of June, 2012, there are 32 Camille’s U.S. locations listed on their website. The Camille’s U.S. franchise network has shrunk 60% since 2008.
Are you familiar with the Camille’s Sidewalk Café franchise opportunity?
What do you think accounts for the SBA loan failure rate of Camille’s Sidewalk Café franchise owners?
What steps should Camille’s Sidewalk Café and Beautiful Brands be taking to stop further franchise failures?
Have Camille and David Rutkauskas taken serious action to address the problems that led to the 58% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A CAMILLE’S SIDEWALK CAFE FRANCHISE OWNER OR FORMER CAMILLE’S FRANCHISEE? ARE YOU FAMILIAR WITH THE CAMILLE’S SIDEWALK CAFÉ FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Camille’s Sidewalk Café, Camille’s franchise, Camille’s Sidewalk Café franchise, Camille’s Sidewalk Café complaints, fast casual franchise, café franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information, Camille, Rutkauskas, David Rutkauskas
TOGO’S Franchise Complaints
July 13, 2012
The Togo’s franchise has a high SBA loan default rate of 24%.
According to the Small Business Administration, Togo’s franchisees have received 74 SBA-guaranteed loans to date; nearly a quarter of those loans have been defaulted on by Togo’s franchise owners.
Are you familiar with the Togo’s franchise opportunity? Please share a comment below.
The Togo’s Franchise has a failure rate of 24% for SBA-backed franchise loans
It’s likely that Togo’s franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Togo’s franchise opportunity?
What do you think accounts for the SBA loan failure rate of Togo’s franchise owners?
What steps should Togo’s be taking to stop further franchise failures?
Has Togo’s taken serious action to address the problems that led to the 24% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A TOGO’S FRANCHISE OWNER OR FORMER TOGO’S FRANCHISEE? ARE YOU FAMILIAR WITH THE TOGO’S FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Togo’s, Togo’s franchise, Togo’s complaints, sub franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information
ROLY POLY Franchise Complaints
July 13, 2012
The Roly Poly franchise has a disturbingly high SBA loan default rate of 42%.
According to the Small Business Administration, Roly Poly franchisees have received 86 SBA-guaranteed loans to date; nearly half of those loans have been defaulted on by Roly Poly franchise owners.
Are you familiar with the Roly Poly franchise opportunity? Please share a comment below.
The Roly Poly Franchise has a failure rate of 42% for SBA-backed franchise loans
It’s likely that Roly Poly franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Roly Poly franchise opportunity?
What do you think accounts for the SBA loan failure rate of Roly Poly franchise owners?
What steps should Roly Poly be taking to stop further franchise failures?
Has Roly Poly taken serious action to address the problems that led to the 42% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A ROLY POLY FRANCHISE OWNER OR FORMER ROLY POLY FRANCHISEE? ARE YOU FAMILIAR WITH THE ROLY POLY FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Roly Poly, Roly Poly franchise, Roly Poly complaints, wrap franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information
MURPHY’S DELI Franchise Complaints
July 13, 2012
The Murphy’s Deli franchise has a high SBA loan default rate of 34%.
According to the Small Business Administration, Murphy’s Deli franchisees have received 42 SBA-guaranteed loans to date; more than one-third of those loans have been defaulted on by Atlanta Bread franchise owners.
Are you familiar with the Murphy’s Deli franchise opportunity? Please share a comment below.
The Murphy’s Deli Franchise has a failure rate of 34% for SBA-backed franchise loans
It’s likely that Murphy’s Deli franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Murphy’s Deli franchise opportunity?
What do you think accounts for the SBA loan failure rate of Murphy’s Deli franchise owners?
What steps should Murphy’s Deli be taking to stop further franchise failures?
Has Murphy’s Deli taken serious action to address the problems that led to the 34% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A MURPHY’S DELI FRANCHISE OWNER OR FORMER MURPHY’S DELI FRANCHISEE? ARE YOU FAMILIAR WITH THE MURPHY’S DELI FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Murphy’s Deli, Murphy’s Deli franchise, Murphy’s Deli complaints, sub franchise, cafe franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information
GREAT STEAK & POTATO Franchise Complaints
July 12, 2012
The Great Steak & Potato franchise has a very high SBA loan default rate of 29%.
The Great Steak & Potato is owned by Kahala, franchisor of Cereality, Cold Stone Creamery, Frullati Café & Bakery, Blimpie, Johnnie’s, Nrgize, Ranch 1, Rollerz, Samurai Sam’s, Surf City Squeeze and TacoTime.
Great Steak & Potato franchisees have received 49 SBA-guaranteed loans since 2001; nearly a third of those loans have been defaulted on by Great Steak & Potato franchise owners.
Are you familiar with the Great Steak & Potato franchise opportunity? Please share a comment below.
The Great Steak & Potato Franchise has a failure rate of 29% for SBA-backed franchise loans
In 2008, according to Entrepreneur, Great Steak & Potato had 190 U.S. franchises.
By 2011, Great Steak & Potato had just 122 U.S. franchises.
That’s a decline in size by 68 franchises, a reduction by 36% of its entire chain.
It’s likely that Great Steak & Potato franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Great Steak & Potato franchise opportunity?
What do you think accounts for the SBA loan failure rate of Great Steak & Potato franchise owners?
What steps should Great Steak & Potato and Kahala be taking to stop further franchise failures?
Has Kahala taken serious action to address the problems that led to the 29% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A GREAT STEAK & POTATO FRANCHISE OWNER OR FORMER GREAT STEAK & POTATOFRANCHISEE? ARE YOU FAMILIAR WITH KAHALA & THE GREAT STEAK & POTATO FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Great Steak & Potato, Great Steak & Potato franchise, Great Steak & Potato complaints, sub franchise, cheesesteak franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information, Kahala Corporation, Kahala Cold Stone
BLIMPIE Franchise Complaints
July 12, 2012
The Blimpie Subs & Salads franchise has an alarmingly high SBA loan default rate of 46%.
Blimpie is owned by Kahala, franchisor of Cereality, Cold Stone Creamery, Frullati Café & Bakery, Great Steak & Potato, Johnnie’s, Nrgize, Ranch 1, Rollerz, Samurai Sam’s, Surf City Squeeze and TacoTime.
Blimpie franchisees have received 203 SBA-guaranteed loans since 2001; nearly half of those loans have been defaulted on by Blimpie franchise owners.
Are you familiar with the Blimpie franchise opportunity? Please share a comment below.
The Blimpie Franchise has a failure rate of 46% for SBA-backed franchise loans
In 2009, according to Entrepreneur, Blimpie had 1,089 U.S. franchises.
By 2012, Blimpie had just 738 U.S. franchises.
That’s a decline in size by 351 franchises, a reduction by 32% of its entire chain.
What Blimpie doesn’t point out in its franchise marketing is that it’s likely that Blimpie franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Blimpie franchise opportunity?
What do you think accounts for the SBA loan failure rate of Blimpie franchise owners?
What steps should Blimpie and Kahala be taking to stop further franchise failures?
Has Blimpie taken serious action to address the problems that led to the 46% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A BLIMPIE FRANCHISE OWNER OR FORMER BLIMPIE FRANCHISEE? ARE YOU FAMILIAR WITH KAHALA & THE BLIMPIE FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Blimpie, Blimpie Subs & Salads, Blimpie franchise, Blimpie complaints, sub franchise, salad franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information, Kahala Corporation, Kahala Cold Stone
JERRY’S SUBS Franchise Complaints
July 12, 2012
The Jerry’s Subs franchise has an alarmingly high SBA loan default rate of 50%.
Jerry’s Subs franchisees have received 33 SBA-guaranteed loans; half of those loans have been defaulted on by Jerry’s Subs franchise owners.
Are you familiar with the Jerry’s Subs franchise opportunity? Please share a comment below.
The Jerry’s Subs Franchise has a failure rate of 50% for SBA-backed franchise loans
Despite it’s high SBA loan default rate, Jerry’s Subs & Pizza not only continues to recruit franchise owners, it boasts and how fast they can put you in business:
Jerry’s has been famous for ‘The World’s Best Cheesesteaks’ and NY Style Pizza since 1954…
If you are a prospective new franchisee with prior experience in the Delivery business, we are currently offering a "special opportunity" for you to ‘Own Your Own Jerry’s’ with a low initial investment and the ability to be in business in as little as 45 days!
But how long will you stay in business, especially if you are relying on a brand-new delivery based business?
What Jerry’s Subs doesn’t point out is that it’s likely that Jerry’s Subs franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and more than half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Jerry’s Subs franchise opportunity?
What do you think accounts for the SBA loan failure rate of Jerry’s Subs franchise owners?
What steps should Jerry’s Subs be taking to stop further franchise failures?
Has Jerry’s Subs taken serious action to address the problems that led to the 50% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A JERRY’S SUBS FRANCHISE OWNER OR FORMER JERRY’S SUBS FRANCHISEE? ARE YOU FAMILIAR WITH THE JERRY’S SUBS FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
Tags: Jerry’s Subs, Jerry’s Subs franchise, Jerry’s Subs complaints, sub franchise, pizza franchise, sandwich franchise, franchise opportunity, restaurant franchise, food franchise, franchise failure rate, worst franchise, sba failure rates, SBA franchise loans, franchise information, unhappy franchisee,
