Finding that perfect location can be time consuming and frustrating. Luckily you have some people that will help you along the way. Subway Corporate is a great place to start and they will put you in touch with a Development Agent in your area. Development Agents are private contractors whose sole purpose it to develop their area with Subway Restaurants and oversee their overall operation, so clearly this is the best place to start to get an idea of whats available.

When I was first starting out I looked at dozens of Subway Restaurants that were on the market. I talked to owners and tried to get a rough idea of what I wanted to commit to. I found that sometimes this can be frustrating because its like dealing with a used car salesman. Most owners are up front but because they are trying to get top dollar for their business there are some things that they will naturally overlook. So there are some pitfalls that you need to look out for before you dive in. So I developed a checklist for you to use to make this process a bit more transparent.

Things to ask and look for before purchasing a Subway Restaurant.

        Sales – What are they and show me the figures. This is the easy part because there is no way for these figures to be fudged. Because Subway Franchise's pay royalty fees based on their sales these figures are accurate on both ends. The figures that the owners have and the figures that Subway Corporate have will agree. Sales a tracked by the register system and no owner that I know fudges these to make them look larger then they really are. Sure you can ring in sales that never took place but your paying royalties on those so it hardly makes sense. The owners will provide you with Control Sheets and I would ask for at least three years worth.

        Equipment – Look over everything. I can make anything in my store look brand new by just cleaning it but the last situation that you want to get into is to get stuck with a store where equipment looked nice but is now breaking down because it wasn't maintained. Owners should have routine maintenance logs for large pieces of equipment such as coolers, ice machines, sandwich unit, toaster oven and bread oven. If your not sure what your looking at pay someone to do a once over on everything, the cost of this will save you many headaches. Check the AC roof top unit, under the most common lease you are responsible for this unit so make sure its in good working order.

        How does the store look ? - A nice clean store indicates that the owner took care of things. Don't look at the areas that are easy to clean such as floors and bathrooms. Look around along the walls, under the sinks and behind garbadge cans. Are things are bit to clean ? No store is going to look like a hospital and if does then someone put a really nice shine on it before you arrived. Ask to look at the storage closet and look for droppings, rodents love food and they need to be controlled.

        Evaluations – Every Subway Restaurants gets evaluated on a monthly basis and these evaluations are perhaps one of the most important pieces of information next to sales figures. All sorts of problems are reported here and if they are not corrected they get reported again. Look for trends, does the store constantly get marked out for “Food Safety” because food isn't at the right temperature, this will point to a problem with the unit. Does the store look immaculate yet have cleanliness compliance items ? Is the store out of compliance or in arbitration ? A store in arbitration is a sign that the owner is not doing his part, however he also has to sell his store fast because hes in danger of loosing it. Use this to your advantage in negotiating a price.

        Lease – What are you responsible for and how much time is left on the lease. You don't want to commit to a location that only has two years left on their lease ? You need to get Subway Corporate to negotiate at least a ten year lease with a five year options. Have this in place before you go anywhere.

        Why is the owner selling ? - Most owners sell because they don't want to do it anymore or are simply moving on, perhaps they didn't think it was for them and are selling. You need to ask this question and make a good judgment call here. Is the owner selling because hes tired ? Great if thats the case but make sure its not because hes not making any money.

        Staffing – Talk to the staff, this is a bit more difficult because most staff don't want to say anything negative about their current employer. However its not a bad idea to come into the store when the owner isn't around and ask some questions. Yes some employees have an ax to grind but most of them will be honest if you ask.

        How long has the store been on the market ? - If the owner has been trying to sell the store for the past year with no success then hes probably asking to much. Many owners have unreasonable expectations of what their store is worth. Always negotiate, owners that want out will sell if the price is right but it doesn't have to be the asking price.

        Talk to the Development Agent – My experience has been that most development agents will be honest with you, they either own some stores or have in the past so they understand the financial commitment. If they don't think a particular location is a good idea they will most likely tell you.

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