Lee’s Sandwich Shop is a must-visit quick-service restaurant that combines European and Asian cuisine in one menu. Hailed as one of the most successful Asian food franchises in the Southwest, the chain serves freshly-baked Vietnamese baguettes and coffee to over 60 locations in America and Taiwan.
How much will it cost to open a Lee’s Sandwiches? The total investment to open a Lee’s Sandwich Shop is $195,890 to $1,838,560. The wide-range in startup cost is determined by the franchise option and location you plan to open. More on this in the franchise review below. The initial franchise fee of this brand ranges from $50,000 to $75,000.
If you’re interested in becoming a part of the world’s largest Banh Mi Chain, then you should have a working capital of $20,000 to $120,000 and a net worth of $339,110. Let me walk you through the Financial requirements and performance of Lee’s Sandwiches. Take our 7-minute franchise quiz to be matched with the right opportunity for you.
Financial Requirements and Fees
You should be familiar with the financial requirements and costs of purchasing the Lee Sandwich franchise before deciding whether to buy it. I outline the essential financial requirements and any additional fees of the chain below. But before we dive in, here are some of the financial terms you’ll encounter in this section.
- Liquid capital – refers to the entire amount of cash you will need on hand and is available to use at any time.
- Net worth – refers to the value of all your non-financial and financial assets minus the value of all your outstanding liabilities.
- Total investment – is the total capital or the total money you will need to put into the franchise over time to get it up and running.
- Franchise fee – refers to the amount you must pay to the franchisor to use its brand and resources.
Here’s an overview of the financial details that you need to keep in mind if you’re interested in this franchise:
|$195,890 – $1,838,560
|$50,000 to $75,000
Lee’s Sandwich offers four franchise options: Baguette Factory Production Unit, Production Unit, Non-Production Unit, and Mall Unit. Each concept comes with a different price tag.
If you can only invest $190,830 to $398,870, you should consider choosing the Mall unit. If you’re willing to spend as much as $1,107,000 to $1,935,000, then the baguette factory production unit is a viable option for you. Depending on your choice, the cost of the franchise fee would range from $35,000 to $75,000.
The franchise agreement of Lee’s sandwich lasts for 10 years, but if you want to continue after a decade of franchising, you may renew your contract and add-on another 5 years. The renewal is not offered automatically because they require you to qualify to certain criteria before approving your application.
Aside from the mentioned fees above, you also have to include the ongoing fees on your budget allocation. The royalty fee is 6.9% of your gross sales. There are also ad fees that will cost you 2% of gross sales. Make sure you find it acceptable to hand over 8.9% of each transaction to corporate each month.
Average Sales/Revenue per Year
Here’s a brief analysis of the financial performance of Lee’s Sandwiches.
|Systemwide Annual Sales
|$32.1 Million (as of 2021)
|Average Annual Sales per Unit
|Average Franchise Profit
As of 2021, Lee’s Sandwiches earned a revenue of $32,100,000 across its locations. Currently, there are at least 60 franchise units; hence, we may assume that each of them earns an average annual sales of $535,000. At this amount of revenue, the highest profit you may gain is $339,110 which translates to 63.4% profit margin.
Nonetheless, this data does not necessarily represent the future of your business venture because the profitability of this franchise would depend on certain factors such as area management and level of optimization of operational costs. Lee’s Sandwich has been around since 1983 but they only started franchising in 2004.
How Much Profit Does a Lee’s Sandwiches Franchisee Make Per Year?
While we don’t know the exact profit numbers of a Lee’s Sandwiches, we can make an estimates based on the industry. For example, it’s not uncommon for the net-profit of a sandwich shop to be 10% – 15%.
One business listing for a Lee’s Sandwiches based in Orange County, California, fell in line with these numbers. For example, the location reported $1 million in total sales and a net profit of $100,000. This would equal a 10% profit margin on sales. The business listing also claimed a staff of 19 part-time employees to operate the business. Keep in mind these figures were not validated by an accountant, but to the best of my knowledge they are accurate.
Assuming that the business earned $535,000 in a year (my estimate for the average sales of a Lees Sandwiches), you could expect to bring in $53,500 – $80,255 after expenses operating at a profit margin of 10% – 15%. If these numbers hold true, it may need 2 – 3 locations earn a comfortable living.
Debi Manjoo sweet snack of Lee’s Sandwiches Shop.
Lee’s Sandwiches Franchise Facts
|Over 60 locations
|Quick service restaurant, Sandwich Shop
Lee’s Sandwiches is a product of pioneering strategy and family support. It began as a catering truck whose route revolves around San Jose where its founder, Chieu Lee settled in 1980. While working in the catering service, Chieu spotted a gap in the market. He realized that combining the concept of parking lots and restocking stations would bring convenience to catering trucks. In 1892, he developed the Lee Bros. Foodservices, Inc. along with his brother and started serving over 500 independently operating trucks.
A year after that, their parents, Ba Le and Hanh Nguyen, started selling Banh Mi to students and residents in San Jose. This venture led to the establishment of Lee’s Sandwiches on Santa Clara Street. Minh, Chieu’s eldest son, joined the family business and developed the concept of Euro-Asian cuisine in 2001. They started selling European sandwiches along with Vietnamese Banh mi and some beverages. When their business model succeeded, they opened their doors to franchising in 2004 and grew as the World’s Largest Banh Mi chain with over 60 locations in the United States and Taiwan.
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As of 2021, the market value of global fast food and quick service restaurants reached $232.3 Billion. At a CAGR of 4.9% in a span of five years, it’s expected to grow up to $308 Billion by 2027.
In a fast-moving world, the adoption of travel-friendly, on-the-go products will boost the outlook of this market. Another growth-inducing factor would be the emerging cafe culture and the leaning preference towards healthier fast food alternatives.
Lee’s Sandwiches has continued to innovate over the years. With their unique concept of combining European and Asian cuisine, they were recognized as one of the outstanding local businesses throughout the country as the U.S Local Business Association gave them the 2008 Best of Milpitas Award in the Subs and Sandwiches category.
Who Owns Lee’s Sandwiches Shop?
Chieu Lee founded Lee’s Sandwiches but it was his parents, Ba Le and Hanh Nguyen who paved the way to its establishment in 1983. Lee’s Sandwich was further developed by Chieu’s son, Minh, who thought about combining European and Asian cuisine in their menu. They’re a family of Vietnamese entrepreneurs who managed to raise their company to become the World’s largest Banh Mi Chain.
How Many Calories Does a Lee’s Sandwiches Have?
Lee’s Sandwich top 10 popular products have an average calorie count of 478 cal. Its top 7 sandwich called the #6 BBQ Pork Sandwich has the most calorie count with almost 700 cal per serving. Pennyworth Drink, its least popular product, has the lowest count at 90 calories. Sugarcane Juice, Small, on the other hand, is the most popular drink with a calorie count is in the lower side at only 230 cal.
#11 Special Combination Sandwich did not make it to the list but it’s worth noting that its calorie count surpassed BBQ Pork Sandwich. At a whopping 900 calories, this sandwich is composed of 15% protein, 42% carbohydrate, and 43% fat. It would take you 242 minutes of walking, 87 minutes of running, and 125 minutes of bicycling to burn it off from your body.
Can You Order Lee Sandwiches Online?
Lee’s Sandwiches famous Ham & Cheese Baguette with iced coffee.
Yes. Lee’s Sandwiches has partnered with Grubhub to make your purchase more convenient, especially in the middle of the pandemic. Lee Sandwich management knew that people prefer the hassle-free tap and food order rather than leaving their homes for a snack.
You may use their app to order the food you love from Lee’s and enjoy them fresh, and delicious at the right temperature. Some items in their menu can be customized so if you wanna be extra with your order, you may leave a note in the Special Instructions field.
Advantages Of Owning Lee’s Sandwiches
Here are some of the advantages of owning a Lee’s Sandwiches as I see it:
- Unique and Interesting Business Concept – Lee’s Sandwiches attempt at fusing two different cuisines resulted in an award-winning business model that helped the company become one of the fastest-growing restaurant chains in the west. They were able to bring harmony to two different cultures that Minh noticed that people would “come to Lee’s Sandwiches just because it’s Lee’s Sandwiches.”
- Award-winning franchise – Lee’s Sandwiches have proven its success in the market with its several recognitions. IN 2003, Chieu Le, the founder of the company was recognized as the Business of the year. In the same year, the company received the 2003 Regional Entrepreneurial Success Award. This makes the franchise a competent option for you.
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- More Opportunities for Global Expansion – Currently, the majority of locations of the business are located in the United States. In 2015, it expanded its horizon to Taiwan. This is a good indication that this business will not hinder from achieving entrepreneurial growth beyond your comfort zone. It’s also worth mentioning that it is a globally renowned fast food company that is known to be “The World’s Largest Banh Mi Chain”. Not only will it save you from struggling to establish a presence, but you may also have a chance of monopolizing the market in your chosen area.
- Four franchise options – Lee’s Sandwich has four options for you to choose from, depending on the feasibility of your business plan and the allocation of your budget. This will give you an opportunity to decide which path you want to take and which aspect of the business you’ll want to explore.
Challenges Of Franchising Lee’s Sandwiches
There are downsides to owning a Lee’s Sandwiches location and it’s important to understand these challenges.
- Low Brand Awareness – In most parts of the midwest, diners have never heard of Lee’s Sandwiches before. In much of America, consumers haven’t even heard of a banh mi sandwich. I suggest opening a new locations in places like California, Nevada or areas with a significant Vietnamese community who will be familiar with the brand.
- Negative Reviews Online – while negative comments do not necessarily represent the whole company, their presence targeting the brand online may affect the reputation of your business. People have complained about their worst experience in other branches. Some common complaints include not enough meat in the sandwich. While I understand this critique, this is a low-cost meal option so the company can only give out so much protein and maintain profit.
- Food Safety Controversy – Some of the locations of the franchise brand has a record of food safety risk way back in 2015 because of the preparation of non-USDA approved meat which resulted in cases of food poisoning. It’s been six years since that controversy yet there is still a possibility that some customers haven’t forgot. Hence, it would be best if you implemented strict food and environment safety protocols so customers feel confident about your location.
- High Calorie Count – The current market demands healthier fast food alternatives that will not make them feel guilty with every bite. The calorie count of some food items in this brand could go as high as 900 calories. The challenge here, then, is for you to innovate a recipe that your customers would still indulge too without compromising their commitment to a healthier diet.
- Limited Presence in Online Delivery Apps – As discussed above, Lee’s sandwiches can only be found on Grubhub. It’s not that bad, knowing that it is the second most-used food delivery app in the United States. As the trend of at-home consumption and mobile food delivery progresses today, the company should consider partnering with other apps food delivery hubs like Uber Eats, Postmates, and DoorDash. That way, you could establish more presence online, a factor that is now crucial to the success of your business.
Is the Lee’s Sandwiches Franchise Right For You?
Lee’s Sandwiches was not particular with the qualifications that they’re looking for in a franchise owner. You only have to be a serious banh mi and cafe sua da lover who’d introduce their concept to your community. You also need to have a working capital of $35,000, a net worth of $339,110.
When it comes to experience, they are willing to welcome you in their franchise family despite being an amateur because they offer training that will help you learn how to manage your own business. On top of that, this franchise brand requires their new franchisees to undergo ongoing training programs to ensure that they’re well-versed in the best practices within the restaurant industry.
Lee’s Sandwich encourages you to grow as an entrepreneur without leaving you helpless. Even in the marketing and advertising aspect, they got you covered to help you succeed in your venture. If the support they provide is starting to sound like the one you need, then you should consider franchising with them.
If you’re already thinking of investing, then you should start saving up $50,000 to $75,000 for the franchise fee that will grant you the license to operate their franchise. You should also start looking at their franchise options and see which of them fits your budget and passion.