In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Cousins Subs franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Cousins Subs franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Cousins Subs outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Cousins Subs franchise opportunity

Section V – Presentation and analysis of Cousins Subs’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average gross receipts for the 50 affiliate-owned Cousins Subs Shops that were open the entire 2023 fiscal year

• 2023 average gross receipts for the 36 franchised traditional Cousins Subs Shops that were open the entire 2023 fiscal year

• 2023 average gross receipts for the 5 franchised non-traditional Cousins Subs Shops that were open the entire 2023 fiscal year

• 2023 average gross receipts for the 7 franchised traditional drive thru Cousins Subs Shops and the 35 franchised traditional non-drive thru Cousins Subs Shops that were open the entire 2023 fiscal year

• 2023 average total revenue, cost of goods sold, wages, occupancy costs, telephone and utilities, advertising, employee benefits, other operating expenses, franchise fees, and shop EBITDA for the 44 affiliate-owned traditional Cousins Subs Shops that were open the entire 2023 fiscal year

• growth in average unit volume for all Cousins Subs Shops between fiscal year 2011 and fiscal year 2023

• system-wide annual net sales in fiscal years 2011 and 2023 for the 37 traditional franchised Cousins Subs Shops, 5 non-traditional franchised Cousins Subs Shops, 39 traditional affiliate-owned Cousins Subs Shops, and 3 non-traditional affiliate-owned Cousins Subs Shops that were open during both the entire 2011 fiscal year and the entire 2023 fiscal year

• percentage growth in net sales in 2017, 2018, 2019, 2020, 2021, 2022, and 2023 as compared to the previous year for all Cousins Subs Shops that were open for both of the full comparison periods

Section VI – Key ratios, comparables, computations, and analyses for the Cousins Subs franchise opportunity (exclusive content for Platinum subscribers)

Section I – Cousins Subs Franchise Costs

• Initial Franchise Fee:  $25,000
• Leasehold Improvements:  $205,000 to $600,000
• Equipment and Small Wares:  $135,000 to $190,000
• Seating Package/Millwork:  $30,000 to $75,000
• Initial Inventory and Supplies:  $6,000 to $18,000
• Point-of-Sale System/Technology:  $10,000 to $30,000
• Architectural Fees:  $9,000 to $52,000
• Rent:  $3,000 to $15,000
• Lease and Utility Security Deposits:  $0 to $15,000
• Insurance:  $700 to $1,500
• Training:  $2,500 to $15,000
• Store Marketing Fee:  $10,000
• Lease Addendum Review Fee:  $0 to $5,000
• Signage:  $8,500 to $63,000
• Additional Funds – 3 Months:  $20,000 to $50,000
• Total Estimated Cousins Subs Franchise Costs:  $464,700 to $1,164,500

Section II – Cousins Subs’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $17,500 to $25,000
• Continuing Service Fee:  6% of gross receipts of Shop
• Advertising and Development Fund Contribution:  2% of gross receipts of Shop
• Local Advertising:  3% of gross receipts of Shop
• Cooperative Advertising Program:  up to 3% of gross receipts of Shop

Section III – Number of Franchised and Company-Owned Cousins Subs Outlets

Franchised

2021

• Outlets at the Start of the Year:  65
• Outlets at the End of the Year:  53
• Net Change:  -12

2022

• Outlets at the Start of the Year:  53
• Outlets at the End of the Year:  48
• Net Change:  -5

2023

• Outlets at the Start of the Year:  48
• Outlets at the End of the Year:  41
• Net Change:  -7

Company-Owned

2021

• Outlets at the Start of the Year:  31
• Outlets at the End of the Year:  40
• Net Change:  +9

2022

• Outlets at the Start of the Year:  40
• Outlets at the End of the Year:  44
• Net Change:  +4

2023

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  50
• Net Change:  +6

Section IV – News Updates on the Cousins Subs Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Cousins Subs Franchise (Item 19, 2024 FDD)

• “Traditional Shops” means all Cousins Subs other than those “Non-Traditional Shops.” “Non-Traditional Shops” means those Cousins Subs which are (a) co-branded with a pizza establishment, (b) located within a convenience store, or (c) attached to a convenience store.

• There were 4 affiliate-owned Non-Traditional Shops operating in 2023 and those are included in the total affiliate-owned Shops.

• Each chart below includes all affiliate-owned and franchised Shops that were open the entire 2023 fiscal year. The charts do not include Shops that were opened during the 2023 fiscal year or closed for an extended period during a remodel. The charts do not include special event locations or food trucks.

• The affiliate-owned chart includes Shops that were acquired from a franchisee, or sold to a franchisee, during the fiscal year if the Shop was affiliate-owned for 6 months or longer during the fiscal year; if the Shop was not affiliate-owned for at least 6 months, it was included in the applicable Franchised Shops chart. During the 2023 fiscal year, Cousins acquired 6 Shops from franchisees, all of which are included in the affiliate-owned chart.

• The Traditional Shops were ranked according to the annual amount of gross receipts and divided into 3 equal categories. The “High” category contains the top third, the “Middle” category contains the middle third, and the “Low” category contains the bottom third.

• “Gross receipts” means the aggregate amount of all sales of food products, beverages, and other merchandise and products of every kind or nature sold from, at, or in connection with the Cousins Subs Shop or arising out of the operation or conduct of business by the Cousins Subs Shop, including any revenues from all vending machine, video game machine, and jukebox sales, less any customer refunds up to the amount of the sales price and excluding all sales, use, or service taxes collected and paid to the appropriate taxing authority.

• “Gross receipts” shall include: (a) all amounts redeemed from gift certificates, gift cards, or similar mediums, (b) all insurance proceeds received for loss of business due to a casualty or similar event at the Shop, and (c) the fair market value of any services or products received in barter or exchange for services or products.

• “Traditional Drive Thru Shops” mean all traditional Cousins Subs Shops that operated with a drive thru for the entire year of operation.

• “Traditional Non-Drive Thru Shops” mean all traditional Cousins Subs Shops that operated the entire year of operation and did not have a drive thru.

Part 1 – 2023 Average Gross Receipts of Affiliate-Owned Shops

All Shops

High

• Number of Shops in Category:  17
• Average Gross Receipts:  $1,385,538
• Number and Percent of Shops Exceeding Average:  7 (41%)
• Median Gross Receipts:  $1,383,487
• Range – Low End:  $1,168,615
• Range – High End:  $1,871,177

Middle

• Number of Shops in Category:  17
• Average Gross Receipts:  $1,003,454
• Number and Percent of Shops Exceeding Average:  9 (53%)
• Median Gross Receipts:  $1,067,020
• Range – Low End:  $871,681
• Range – High End:  $1,139,087

Low

• Number of Shops in Category:  16
• Average Gross Receipts:  $712,698
• Number and Percent of Shops Exceeding Average:  10 (63%)
• Median Gross Receipts:  $770,405
• Range – Low End:  $461,553
• Range – High End:  $864,637

System-wide

• System-wide Average of Affiliate-Owned Shops:  $1,040,321
• Number of Shops Exceeding the System-wide Average:  25 (50%)
• System-wide Median of Affiliate-Owned Shops:  $1,043,583

Part 2 – 2023 Average Gross Receipts of Franchised Shops

Traditional Shops

High

• Number of Shops in Category:  12
• Average Gross Receipts:  $1,211,829
• Number and Percent of Shops Exceeding Average:  4 (33%)
• Median Gross Receipts:  $1,062,796
• Range – Low End:  $894,262
• Range – High End:  $2,141,524

Middle

• Number of Shops in Category:  12
• Average Gross Receipts:  $798,492
• Number and Percent of Shops Exceeding Average:  8 (67%)
• Median Gross Receipts:  $824,637
• Range – Low End:  $675,711
• Range – High End:  $885,653

Low

• Number of Shops in Category:  12
• Average Gross Receipts:  $433,899
• Number and Percent of Shops Exceeding Average:  7 (58%)
• Median Gross Receipts:  $514,772
• Range – Low End:  $128,788
• Range – High End:  $623,583

System-wide

• System-wide Average of Affiliate-Owned Shops:  $814,740
• Number of Shops Exceeding the System-wide Average:  22 (42%)
• System-wide Median of Affiliate-Owned Shops:  $824,637

Non-Traditional Shops

• Number of Shops in Category:  5
• Average Gross Receipts:  $515,624
• Number and Percent of Shops Exceeding Average:  2 (40%)
• Median Gross Receipts:  $467,791
• Range – Low End:  $318,610
• Range – High End:  $780,555

Traditional Drive Thru Shops

• Number of Shops in Category:  7
• Average Gross Receipts:  $1,121,539
• Number and Percent of Shops Exceeding Average:  2 (29%)
• Median Gross Receipts:  $1,014,224
• Range – Low End:  $230,085
• Range – High End:  $2,141,524

Traditional Non-Drive Thru Shops

• Number of Shops in Category:  35
• Average Gross Receipts:  $755,029
• Number and Percent of Shops Exceeding Average:  18 (51%)
• Median Gross Receipts:  $804,397
• Range – Low End:  $128,788
• Range – High End:  $1,485,543

Part 3 – 2023 Average Annual Revenue, Expenses, and EBITDA of Affiliate-Owned Shops

• “EBITDA” means the earnings of the Shop before interest, taxes, depreciation, and amortization expenses.

• These Shops are owned and operated by Cousins Submarines, Inc. The financial information from each Shop has not been audited. No corporate overhead of Cousins Submarines, Inc. is allocated to the Shops for certain services, including accounting, legal, and human resources. None of these Shops pay a continuing service fee to Cousins.

• These charts include information on all the Shops that were open during the entire fiscal year. They do not include a company-owned food truck, a delivery only Shop, or 2 additional seasonal units which operated at multiple venues in Milwaukee, Wisconsin and at multiple venues in Madison, Wisconsin.

• The chart does not include 6 Shops that were acquired from franchisees in 2023.

• “Wages” means the base salary and wages for management and hourly employees, including taxes.

• “Advertising” includes each Shop’s contribution to the Advertising and Development Fund and an advertising cooperative, as well as other promotional expenses.

• “Employee Benefits” include bonuses, vacation pay, and health and dental insurance.

• “Other Operating Expenses” include maintenance, cleaning services, supplies, and POS software expenses.

• “Franchise Fees” include the Continuing Service Fees that would have been payable from these Shops if they were franchised Shops; however, none of these Shops pay a continuing service fee to Cousins.

Revenue From $0 to $699,999 (3 Stores)

Revenue

• Product Sales:  $622,790 (108.86%)
• Less:  Discounts – Coupons:  ($24,757) (-4.33%)
• Less:  Employee Discounts:  ($25,930) (-4.53%)
• Total Revenue:  $572,103 (100.00%)

Cost of Goods Sold

• Food and Beverage Products:  $144,541 (25.26%)
• Paper Products:  $17,864 (3.12%)
• Total Cost of Goods Sold:  $162,405 (28.38%)

Operating Expenses

• Wages:  $196,366 (34.32%)
• Occupancy:  $46,105 (8.06%)
• Telephone and Utilities:  $13,052 (2.28%)
• Advertising:  $30,665 (5.36%)
• Employee Benefits:  $7,022 (1.23%)
• Other Operating Expenses:  $67,442 (11.79%)
• Franchise Fees:  $34,326 (6.00%)
• Total Operating Expenses:  $394,978 (69.04%)

Shop EBITDA:  $14,720 (2.58%)

Revenue From $700,000 to $999,999 (16 Stores)

Revenue

• Product Sales:  $896,691 (108.82%)
• Less:  Discounts – Coupons:  ($36,428) (-4.42%)
• Less:  Employee Discounts:  ($36,245) (-4.40%)
• Total Revenue:  $824,018 (100.00%)

Cost of Goods Sold

• Food and Beverage Products:  $202,139 (24.53%)
• Paper Products:  $24,505 (2.97%)
• Total Cost of Goods Sold:  $226,644 (27.50%)

Operating Expenses

• Wages:  $258,816 (31.41%)
• Occupancy:  $62,465 (7.58%)
• Telephone and Utilities:  $20,845 (2.53%)
• Advertising:  $41,802 (5.07%)
• Employee Benefits:  $13,923 (1.69%)
• Other Operating Expenses:  $83,554 (10.14%)
• Franchise Fees:  $49,441 (6.00%)
• Total Operating Expenses:  $530,846 (64.42%)

Shop EBITDA:  $66,528 (8.08%)

Revenue Greater Than $1,000,000 (25 Stores)

Revenue

• Product Sales:  $1,403,845 (109.10%)
• Less:  Discounts – Coupons:  ($59,332) (-4.61%)
• Less:  Employee Discounts:  ($57,774) (-4.49%)
• Total Revenue:  $1,286,739 (100.0%)

Cost of Goods Sold

• Food and Beverage Products:  $313,379 (24.35%)
• Paper Products:  $37,619 (2.92%)
• Total Cost of Goods Sold:  $350,998 (27.27%)

Operating Expenses

• Wages:  $368,043 (28.60%)
• Occupancy:  $89,162 (6.93%)
• Telephone and Utilities:  $28,655 (2.23%)
• Advertising:  $63,727 (4.95%)
• Employee Benefits:  $22,104 (1.72%)
• Other Operating Expenses:  $114,456 (8.90%)
• Franchise Fees:  $77,204 (6.00%)
• Total Operating Expenses:  $763,351 (59.33%)

Shop EBITDA:  $172,390 (13.40%)

Part 4 – Growth in Average Unit Volume Between Fiscal Year 2011 and Fiscal Year 2023

• The Average Unit Volume of all Shops increased by 117% in fiscal year 2023 from the Average Unit Volume of all Shops in fiscal year 2011.

• The “Average Unit Volume” is the average of the Average Weekly Volume for all 52 weeks of the applicable fiscal year multiplied by 52.

• The “Average Weekly Volume” is the average of the Net Sales for all Shops that were open for the applicable fiscal week. To calculate the Average Weekly Volume, the franchisor combined the Net Sales of all Shops (including all franchised and affiliated-owned traditional and non-traditional Shops) that were open during the applicable fiscal week, and divided the total Net Sales by the number of Shops that had been open during that fiscal week.

Part 5 – System-Wide Annual Net Sales for Shops in Fiscal Years 2011 and 2023

• System-Wide Annual Net Sales – Fiscal Year 2011:  $45,104,572

• System-Wide Annual Net Sales – Fiscal Year 2023:  $79,726,892

• This includes the annual Net Sales of the 37 traditional franchised Shops, 5 non-traditional franchised Shops, 39 traditional affiliate-owned Shops, and 3 non-traditional affiliate-owned Shops that were open during both the entire 2011 fiscal and the entire 2023 fiscal year.

Part 6 – Yearly Growth in Net Sales

Percentage Growth in Net Sales as Compared to Previous Year

• 2017:  3.7% (99 Shops)
• 2018:  1.5% (94 Shops)
• 2019:  1.7% (90 Shops)
• 2020:  5.7% (91 Shops)
• 2021:  18.2% (90 Shops)
• 2022:  3.9% (92 Shops)
• 2023:  6.4% (91 Shops)

• For each of the above referenced fiscal years, the percentage growth is the percentage increase in Net Sales as compared to the prior fiscal year.

• The Shops included in each comparison include all of the Shops that were open for both of the full comparison periods and exclude those Shops which were not open for both full comparison periods.

• They do not include a company-owned food truck or 2 additional seasonal units which operated at multiple venues in Milwaukee, Wisconsin and at multiple venues in Madison, Wisconsin.

Section VI – Cousins Subs Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️