Firehouse Subs

Firehouse's $20,000 franchise fee is low for the QSR sandwich category — Jersey Mike's and similar brands run higher. The $5,000 market introduction fee is paid simultaneously and is non-refundable. Add up to $500 for a background check, and your initial commitment to the franchisor is $25,500 for a traditional location.

The buildout ranges vary dramatically by format. An inline location runs $379,650 to $795,600. An inline end-cap with drive-thru climbs to $549,650 to $1,038,100. A free-standing with drive-thru tops out at $705,650 to $1,396,100. The primary cost driver is leasehold improvements: $200K–$450K for inline, $340K–$600K for end-cap drive-thru, $490K–$940K for freestanding.

Equipment and fixtures add $112,700 to $230,000 depending on format. The brand requires a custom mural ($3,000–$5,000), which is one of those details that signals how brand-driven the concept is. Opening inventory: $10,500 to $28,500.

Ongoing fees: 6% royalty (can increase to 9% if you sign a Deferred Renovation Addendum and fail to complete renovation), 5% System Fund Contribution, and a Digital Technology Fee of $150/month plus 1% of digital sales. The 5% system fund is higher than many comparables — Domino's is 4%, McDonald's is 4%, Subway is 4.5%. Combined royalty and system fund is 11% of gross sales.

The 2026 Development Incentive Program (DIP) is worth knowing: qualifying franchisees opening in 2026 receive $75,000 cash at construction start (or $100,000 for veterans/first responders on their first through third restaurant). These are real cash contributions from the franchisor, not fee waivers — but they require repayment if you don't open by the deadline.

Firehouse discloses AUV data for 1,022 traditional development franchised restaurants that operated continuously in 2024. The average was $964,457 and the median was $926,456. Only 44% of locations met or exceeded the average — the distribution skews slightly lower than the mean, indicating a meaningful tail of underperformers.

By restaurant format, free-standing drive-thru locations (22 in the sample) outperform: average $1,085,557. End-cap strip center with drive-thru (56 in sample) averaged $1,081,162. Traditional inline locations averaged $964,457.

The EBITDA data from 665 stores that submitted P&Ls is the critical number: on average $1.0M in sales, the P&L shows COGS 30.7%, labor 27.4%, occupancy 7.6%, other costs (including royalties, system fund, utilities, insurance, MIS fee) 25.3%. Average EBITDA: $90,821 (9.0%). Median EBITDA: $83,117 (8.6%).

Breaking by sales tier: stores above $1.2M average $180,972 in EBITDA (12.5%). Stores in the $1.0M–$1.2M range average $111,638 (10.3%). The $800K–$1.0M tier averages $69,129 (7.7%). Stores under $800K average just $20,157 in EBITDA (2.9%) — barely enough to justify the investment.

On a $380K–$795K investment for an inline location, $83K–$91K in EBITDA suggests payback of 4–10 years before debt service. On a $1.4M free-standing buildout, the math is tighter.

Firehouse Subs operated 1,248 total locations at year-end 2024 (1,206 franchised, 42 company-owned), growing from approximately 1,209 units in 2023. The 62 openings against 26 closures in 2024 represents a modest but positive net growth of 36 units.

The brand is owned by Restaurant Brands International (the parent of Burger King, Tim Hortons, and Popeyes), which provides financial stability and supply chain leverage — but also means franchisee interests compete with larger RBI priorities. The brand has been slowly expanding since the RBI acquisition, with drive-thru capabilities getting more emphasis in recent format development.

In 46 states with 1,200+ locations, Firehouse has meaningful national scale. Closure rates are moderate — 26 closures against 62 openings in 2024 (roughly 1 closure per 2.4 openings) suggests the system isn't in distress, but it's also not a high-momentum growth story.

The combined royalty (6%) plus system fund (5%) equals 11% of gross sales — one of the higher combined fee burdens in the QSR sandwich category. On a median $926K store, that's $101,860 per year in fees before you've paid a single employee.

The digital technology fee adds another layer: $150/month + 1% of digital sales. As digital ordering grows (typically 30–50% of QSR sales now), this fee grows with it. A store doing $1M in sales with 40% digital orders would pay $1,800/month + $4,000 in digital fee annually — $5,800/year in tech costs beyond the 11%.

The Deferred Renovation Addendum deserves scrutiny: if you agree to defer a required renovation and then fail to complete it, your royalty jumps from 6% to up to 9%. This is a punitive mechanism in the contract that could catch operators during financially difficult periods.

RBI ownership means the corporate strategy can shift in ways that affect the Firehouse brand independently of franchisee preferences — pricing programs, menu decisions, and brand positioning are all influenced by a corporation balancing multiple QSR brands simultaneously.