How to Open a Deli Franchise in 5 Steps
Wondering what it really takes to open a deli franchise? We detail every step so you know what to expect throughout the entire franchise process.
Step 1: Research Franchisors
Choosing the right franchise is important and there are several factors to consider in the deli space. With many brands to pick, doing extensive research on what each offers and how they stand out will help you decide which franchisor is the best fit for your skills and goals. Here are a few key factors to guide you during your search:
- Brand recognition: One of the benefits of franchise ownership is the franchisor has already done considerable work to establish a brand’s presence and reputation in the marketplace. Investing in a brand where consumers already know what is offered and what to expect puts you ahead of the competition.
- Franchise fees: Initial costs and fees are typical with any franchise investment. You’ll want to compare each brand on your list to see how they stack up and if the fees fit your budget.
- Royalty fees: Ongoing fees like royalties, usually paid as a percentage of gross sales, earn you the right to use the franchise name, logo, marketing, new development, and more. The fees vary between franchisors; compare so you know what you’re agreeing to should you invest.
- Financial Disclosure Document: Be sure to explore the brand’s FDD. It’ll give you a snapshot of the franchisor’s overall financial health from the previous year.
- Return on Investment. You are investing in a franchise system to make money, and it’s important to not only understand the fees charged, but understand the purported amount you can earn. This is explained in item 19 of the brand’s FDD, and often, brands limit the financial information reported. You should explore this carefully when considering a brand.
- Franchise support: Most franchisors offer support to open new units as well as ongoing support with things like marketing and technology, giving franchisees the tools needed to build their businesses. See if the franchisors you’re exploring offer the amount and kind of support you want.
- Menu: Menu offerings and development are of special importance when considering a deli franchise. Determine whether the brand focuses on one item or offers a broader range of items to satisfy more customers. Another important factor to consider is does the brand generate customers during both lunch and dinner? A brand like Penn Station East Coast Subs caters to both the lunch and dinner dayparts by offering quality hot and cold sandwiches as well as fresh-cut fries, wraps, salads, freshly baked cookies, and more, appealing to a variety of hungry people.
Step 2: The Application Process
You’ve done your research and settled on the franchise you want to invest in. Now what, you ask? Apply! While the application process varies between franchisors, here’s typically what to expect.
The application process allows you and the franchisor to get to know each other better and decide if the partnership is a good fit. Many franchisors have their applications on their websites, or they’ll be happy to send you one. Expect questions about your financial qualifications and business experience. The franchisor will supply their FDD to qualified candidates and invite them to be interviewed or participate in Discovery Day.
Step 3: Location, Location, Location!
A major factor in any business’s success is location. You’ll often receive support from a franchisor when it comes to site selection, and many have dedicated effort to determining the prime locations for the brand. Visibility, accessibility, competition, and demographics go into deciding what locations are best.
Step 4: Development Agreement
Separate from the franchise agreement, a development agreement with a franchisor is designed to help you plan and grow your business, giving you the exclusive development rights to build a restaurant within a specific territory within a particular timeframe mutually agreed to by you and the franchisor. There may be financial advantages to opening multiple units as well as efficiencies built into owning more than one sub shop franchise at a time.
Step 5: Open Your Own Penn Station Franchise
Penn Station East Coast Subs is home to signature premium products like freshly grilled subs, cold sandwiches, fresh-cut fries, salads, wraps, fresh-squeezed lemonade, and freshly baked cookies. Unlike some brands, customers dine at Penn Station for lunch and dinner, giving our franchisees the potential to generate more revenue.
Our steps to ownership include exploring available territories, a call with a franchise specialist, and an exploratory meeting. If you’re excited to learn more about Penn Station East Coast Subs, committed to operational excellence, and dedicated to providing outstanding customer service, we’d love to hear from you. You can request more info to start the process of owning your own deli franchise.