Firehousesubs Case Analysis

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Spring 2012
Firehouse Subs Case Study
Entrepreneurship 351
Monique Tyson, Simone Hunt, Umi Patterson, Courtney Cooper, Montier Kess

History
Firehouse Subs is a franchise business that serves submarine sandwiches. Robin and Chris Sorensen opened the first location in 1994 in Jacksonville, Florida. Robin and Chris are two brothers that once worked as firefighters in the state of Florida. After sampling other entrepreneurial ventures, the two brothers decided to expound on Firehouse Subs, turning it into a franchise business after a few short years. The Sorenson’s began to tackle the Southeast region of the United States in efforts to set up shops and serve sandwiches. In 2001, there were 30 Firehouse Subs restaurants operating across Florida. As of today, they have 450 locations in 29 states within the United States. Using the thematic of fire stations, the brothers pay homage to their firefighting roots and have decorated and carried on the tradition of having their restaurants emulate a firehouse and serve sandwiches specializing in “the best meats, cheeses, and toppings [they] can find.” It’s because of this recipe, and stellar customer service, that the Sorenson’s have been as successful thus far.

Financial Issues
In 2008 Firehouse Subs sales shockingly declined throughout the submarine chain by 3.4 percent. The decline in sales shocked executives because of the restaurant being in the lower priced category, where usually is positioned well enough in the market during economic downturns to attract continuing dining out customers that look for less expensive selections. So in result of this decline, co- owner Robin Sorenson wanted to figure out what other factors could have created this drop in sales and immediately implement strategies to push sales back up. Firehouse Subs charges an initial franchise fee of $20,000, a royalty of 6 percent sales and a 3 percent advertising fee (2 percent toward local advertising). He suggested...
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