If you’re interested in franchising a Capriotti’s Sandwich Shop, you’ve come to the right place. I share a detailed breakdown of the fees, costs, and hidden expenses behind franchising a Capriotti’s Sandwich Shop based on extensive research, so you can find out if this is the right franchise deal for you.
Keep reading to learn more about this Italian-themed sandwich shop and what it takes to join the Capriotti family. Click here to take our 7-minute franchise quiz and get matched with an opportunity.
- Financial Requirements and Fees
- How Much Profit Does a Capriotti’s Sandwich Shop Franchisee Make Per Year?
- What Territories Are Available for Franchising?
- How Much Do Capriotti’s Owners Make on Average?
- Advantages of Capriotti’s Sandwich Shop
- Challenges of Capriotti’s Sandwich Shop
What Is Capriotti’s Sandwich Shop?
Founded in 1976 in Willmington, Delaware, Capriotti’s Sandwich Shop combines delicious sandwich fixings with amazing rolls for a sandwich experience that’s to die for. Their company rose out of a desire to incorporate family history and beloved recipes with innovation, resulting in the sandwich company you see today. The company began franchising as early as 1985 and has grown to a network of over 160 units as of 2021.
These sandwich shops span 26 states, with more units built every year. On top of that, this resilient business made it through the pandemic largely intact thanks to online ordering and delivery, attesting to its strong foundation and loyal customer base. So if you’re interested in running a shop where fresh ingredients and family recipes combine for amazing sandwiches, you’re in the right place.
|Industry||Food and Beverage|
Financial Requirements and Fees
Let’s look at the various financial requirements and fees associated with opening a Capriotti’s Sandwich Shop as the average annual income from these locations. Of course, these financial requirements and fees are subject to change and should be used only as a general guideline before making any financial commitments.
|Liquid Capital||$100,000 to $150,000|
|Net Worth||Approx. $475,000|
|Total Investment||$350,000 to $815,000|
|Franchise Fee||$40,000 (15% discount for military veterans)|
|Average Sales / Revenue per Year||$1.3 million for the top 25% of franchise owners|
|Systemwide Annual Sales||$108 million|
|Average Annual Sales per Unit||Approx. $850,000|
|Average Franchisee Profit||Approx. 50% of total revenue earned|
The initial liquid capital needed to start a Capriotti’s Sandwich Shop depends on a few factors. First, our numbers don’t include purchasing the location or kitchen supplies. Second, since Capriotti’s requirements fluctuate over the years, our numbers have the most recent iterations, with a tendency to err on the side of more money than you need.
Keep in mind that liquid capital is the minimum requirement, but it will take more than $150,000 to set up a location. So prepare to spend between $350,000 to $815,000 starting a Capriotti’s Sandwich Shop. You can offset this cost if you are a veteran or looking to set up multiple locations.
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Another thing to remember is that while the initial start-up fees may seem steep, this franchise is slightly cheaper than other food and beverage options as far as the initial franchise fee and has a decently high return on investment compared to other franchises. But, of course, this all depends on location popularity and overall growth.
Still, in general, many Capriotti’s franchise owners see an ROI (return on investment) of 50% yearly, not a bad percentage to go off!
|Initial Franchise Fee||$40,000 (15% off for military veterans)|
|Development Service Fee||$10,000 per restaurant|
|Shop Launch Marketing Plan||$12,000 to $30,000|
|Development Rights Agreement||$30,000 for the first location, plus $10,000 for each subsequent site (if developing three or more sites)|
|Royalty Fee||6% to 7% monthly sales|
|Marketing Fund||Up to 4% gross monthly sales|
|Technology Fee||0.65% gross monthly sales|
|Cooperative Advertising||Up to 2% gross monthly sales|
|Shop Launch Marketing Plan||$30,000|
|Team Members and Managers Training in Las Vegas||$1,000 to $5,000 per person per 5 days|
|Team Members and Managers Training at Your Location||$2,000 to $7,500 per person per 5 days|
|Extensive On-Site Training Program||$10,000|
|Copy of Manual||$1,000 for a paper copy, free virtual copy|
|Insurance (3 Months)||$1,000 – $2,000|
|Additional Funds (3 Months)||$30,000 – $40,000|
Most of the fees in this list are standard for a franchise. However, the biggest thing to consider is the employee training and renewal fees. The $30,000 franchise fee up front is somewhat typical for the industry. However, the employee training cost for each location can add up over time, especially if you elect to have employee training done in person and not on-site in Las Vegas.
The renewal fee for each year is $10,000, or ? of the initial franchise cost. Of course, if your business is doing well enough, that fee is a drop in the bucket, but be aware that it exists, so you aren’t surprised to come to the end of the year. Remember that these fees do not consider overall store stock, furniture, fixtures, deco, and more; we cover those in the next section.
It is also worth noting that while Capriotti’s website says the initial investment over four years is close to $480,000 per year, this does average out expenses, with the first year of business likely to incur more costs due to additional fees.
|Architectural/Engineering Fees & Project Management||$15,000 – $32,500|
|Professional Services||$2,000 – $8,000|
|Permits and Licensing||$3,000 – $17,000|
|Security Deposits||$3,100 – $15,000|
|Leasehold Improvements||$142,000 – $290,000|
|Furniture, Fixtures, Equipment, and Smallwares||$100,000 – $175,000|
|Interior Décor||$4,000 – $13,000|
|Exterior Signage||$5,000 – $21,000|
|Menu Boards||$800 – $2,000|
|POS (Point of Sale) System||$6,200 – $20,000|
|Opening Inventory||$7,000 – $15,000|
|Pre-Opening Mock Operations||$3,000|
Yes, Capriotti’s does have additional fees to watch out for. However, their website is upfront about the costs of setting up a Capriotti’s, and while it doesn’t include the price of real estate or the property lease, you can find everything you want to know about pre-opening costs and fees.
These fees and costs can quickly add up, so consider them when franchising this business. For example, a pre-run of the opening day costs $3,000 alone, let alone the cost of signage, furniture, and more for the company.
While having every conceivable investment available on their website is helpful, you should consider all costs and expenses before committing to a franchise.
How Much Profit Does a Capriotti’s Sandwich Shop Franchisee Make Per Year?
Capriotti’s Sandwich Shops’ average revenue varies depending on a few key factors: how old the franchise location is and the total traffic at said location. In general, the top 25% of Capriotti’s Sandwich Shop franchised locations brought in an average of $1.3 million annual sales. Given the cost of the start-up and the initial investment, this is a decent turnaround.
However, remember that this is just the top percentage of Capriotti’s locations, so it’s a good idea to measure your initial earning expectations. For example, one analysis of the 2020 fiscal year noted that the average Capriotti’s location made over $800,000 in sales, which is a decent middle range for 160 sites. It is also worth noting that businesses reported these numbers during the height of the 2020 pandemic, meaning an increase in annual sales is plausible from an economic standpoint.
While there are fees and inventory costs to keep in mind, the average Capriotti’s Sandwich Shop run by a franchisee tends to have a high average unit sale rate and can more than double the initial investment in gross sales in a single year once established.
What Territories Are Available for Franchising?
You can find Capriotti’s Sandwich Shops across the United States. While most of their units are in Nevada, their shops span from one end of the country to the other, with two units in Massachusetts and two in California. Capriotti’s Sandwich Shops are in 26 states, giving you an over 50% chance of having one in your home state. Due to employee training costs, sending employees for training at their Las Vegas location is slightly less expensive, but this cost may increase depending on several factors.
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Capriotti’s Sandwich Shops are not limited to a single territory in the United States, so applying for a franchise in your state should be theoretically possible. However, it is an excellent idea to analyze local competition in your area before applying for a franchise deal, as the location is everything in the food franchise business.
What Kind of Bread Does Capriotti’s Sandwich Shop Use?
Capriotti’s uses a traditional hoagie roll for most of their sandwiches. This Italian bread-adjacent sandwich bun is soft for those unfamiliar with the vaunted hoagie roll. Still, it has a firmer texture outside, making it perfect for sandwiches with more condiments. Those familiar with Pennsylvania and Delaware’s incredible hoagies may find themselves a new favorite sandwich at Capriotti’s.
Depending on the location, Capriotti’s works with local breadmakers to bring fresh, delicious bread to their restaurants. In California, for example, diners can enjoy bread from the Los Angeles Frisco Baking Company. This gives each Capriotti’s restaurant a local flavor and helps keep their ingredients as fresh as possible for each sandwich.
How Much Do Capriotti’s Owners Make on Average?
The amount each Capriotti’s owner makes on average is hard to calculate. While some estimates place the average revenue from each location at approximately 50% of gross units sold, these numbers are far from perfect. In general, the average money made per restaurant does not consider fees, costs, marketing, overhead, additional employee training, or stock changes.
In general, if the average location makes over $800,000 per year, the revenue earned by each owner varies depending on the cost of materials, upkeep, and more.
This is a long-winded way of saying the data for how much a Capriotti’s owner makes a year isn’t available to non-franchise members. So we can’t know how much money franchise owners make on average.
Some of the advantages of franchising a Capriotti’s Sandwich Shop include:
- Hands-on training: The company helps set businesses up for success by offering employee training either on-location or at their original shop. By running mock opening day events, your employees get a feel for working at Capriotti’s from day one without a learning curve. With managerial training on offer, your team can work as a cohesive unit from day one.
- Good success rate: Even with the complications presented by the COVID-19 pandemic, Capriotti’s on average, continued to bring in impressive revenue numbers, with over 25% of their locations averaging $1.3 million in units sold.
- Chance at high-profit margins once established: While the overall cost for starting a Capriotti’s can vary wildly depending on your initial investment, real estate costs, and setup, once your store has established itself, there is a potential for high average yearly profits.
Some of the challenges to keep in mind when starting a Capriotti’s Sandwich Shop include:
- High start-up capital: With a wildly fluctuating number for start-up capital, Capriotti’s can be daunting for the average potential franchiser. While this capital averages around $480,000 over four years, a more significant portion of these fees comes from the first year of operation.
- High training fees: Training employees, whether on-site or at the original Las Vegas location, can become expensive. Given that these fees can increase without warning, it can be hard to plot out the average investment of each employee, not to mention separate manager training.
- Unexpected fees: Not only do you need to consider the initial costs that come with starting a franchise, but there are other unexpected fees bundled into starting this franchise. While the company lists many of these fees on its site, they include furniture, signage, and even a mock opening day trail run. While some of these fees are one-time expenses, they can add up over time.
- Unknown franchisee income: As we’ve mentioned above, the total revenue for franchise owners are not disclosed, meaning it is unknown what the average return on investment is for running a Capriotti’s Sandwich Shop.
Is Capriotti’s Sandwich Shop Right for You?
Not every franchise fits every budget. While Capriotti’s Sandwich Shop is reasonably established and has shops across 26 states, the average total costs of opening a Capriotti’s may be too steep for the average investor.
If you’re looking to find out more about the associated fees for franchising a Capriotti’s Sandwich Shop, you can use their contact form to learn more. If you’re interested in learning about other franchises in the food and beverage industry, check out our other articles to learn more.