Schlotzsky’s Franchise vs. Other Sandwich Franchises: How They Compare

Sandwiches are an American staple. The quick, grab-and-go nature of a sandwich can bring customers back for a delicious bite of nostalgia. It’s no wonder IBISWorld reported in February 2024 that, based on revenue, the market share size of the sandwich and sub sandwich restaurant industry was more than $45 billion in 2023.

When exploring sandwich franchises, there are many choices for potential investors and business owners. Some investors may look at is a Schlotzsky’s franchise. However, for those considering opening a franchise, it can be important to consider other options, compare costs, support and return on investment, along with more detailed information to make the best-informed decision possible.

Schlotzsky’s Overview

The Schlotzky’s deli franchise started in 1971, with franchising beginning a few years later in 1976, according to Franchise Direct’s report on the franchise. Schlotzky’s is a quick-service restaurant (QSR) serving sandwiches, pizzas, soups, and salads. The franchise operates under the umbrella of GoTo Foods (formerly known as FOCUS Brands). According to their website, as of March 2024, there are 337 Schlotzsky’s in the U.S.

Schlotzky’s History

An April 2019 Texas Monthly article reports the deli chain got started in Austin, Texas in the 70’s and reached its peak in 2001. However, the brand filed for bankruptcy in 2004, according to the report. Its parent company, GoTo Foods has recently rebranded from FOCUS Brands. While exploring various franchise opportunities, it’s crucial to evaluate how bankruptcy and rebranding could affect your specific location if you decide to affiliate with that brand.

Schlotzsky’s Franchise Cost

The cost of a Schlotzsky’s deli may vary on a variety of factors. Franchise Direct reports these common costs of a Schlotzsky’s:

• $35,500 (Initial franchise fee)
• 4% of Net sales (Advertising contribution)
• 6% of Net sales (Royalty fee)

Franchise Direct also estimates the initial investment can range from $568,600 to $1,851,750.

Other Sandwich Franchises Compared to Schlotzsky’s

While it’s important to do your own research into any investment, we looked at some highlights to compare Schlotzsky’s to other sandwich franchises.

• Franchise cost: In a November 2023 Small Business Trends list of the 20 best sandwich franchises, many of the top ten had initial franchise fees of around $20,000, with a typical fee between $15,000 to $45,000 across sandwich franchises. The article reports some franchises with potentially lower royalty rates than Schlotzky’s. Penn Station East Coast Subs has a 2-8% variable rate royalty fee depending on sales.
• Franchise structure: Prospective franchisees may want to consider the broader implications of being part of a Private Equity conglomerate like GoTo Foods. The large corporate structure could potentially dilute the personalized support and nimbleness of franchisors without a parent company and interviewing current and existing franchisees will shed more insights into the personalized support offered to franchisees and franchise candidates.
• Franchisee training: Franchisors typically assist with marketing, operational guidance, and educational training. Many sandwich franchise companies offer extensive support services.

Comparing Schlotzsky’s to Penn Station

The investment in a Penn Station franchise may present a more attractive proposition when considering Schlotzsky’s franchise cost and operational requirements. Penn Station offers competitive costs that align with industry standards but include added value in terms of brand recognition, customer loyalty, and growth potential.

Penn Station East Coast Subs provides a compelling business opportunity with a focus on hot-grilled subs, freshly squeezed lemonade, and fresh-cut fries. Unlike Schlotzsky’s, Penn Station is a singular brand rather than a dual-concept operation, offering a more streamlined management and operational process for franchisees.

Penn Station’s training and support system is tailored to equip franchisees with the skills and knowledge necessary for success in the sandwich industry. Penn Station’s comprehensive franchisee training and support includes help with everything from site selection to financial reporting.

Franchise with Penn Station East Coast Subs

Choosing between a Schlotzsky’s sandwich franchise opportunities ultimately comes down to aligning your business and personal goals with the right franchise model. Penn Station East Coast Subs is dedicated to quality. From our freshly baked proprietary bread to our premium meats and proven business model, we offer a solid path to entrepreneurship.

Interested in exploring a franchise opportunity with Penn Station East Coast Subs? Request information today and discover why Penn Station might be the best sandwich franchise opportunity for you.