Fifty-one percent, that’s the magic number for maximizing your Subway profit. Fifty-one percent Food and Labor costs combined; anything above that and you’re losing big money – anything below that is pure, bottom-line boosting profit.
At the convention last month I was surprised by how many multi-unit owners were above this target, some running food and labor costs of 55%. That’s 4% above the target. I spoke with one such ownerwho currently has 17 stores. A conservative estimate would put his yearly sales at approx. $6 mil. x 4% equals $240k he is losing every year.
If this were an owner of 5 stores the example works out like this; with annual sales of approx. $2 mil. x 4% equals $80k in unrealized profit every year. By comparison, my year-to-date combined food and labor costs is 49.5%, so I don’t just theorize about the magic number, I live by it.
Are you happy with your current profit margin? Would you like to realize an additional $10k, $20k, $30k, or more profit next year? What’s your combined food and labor cost percentage? Would you like to learn how to keep those costs at or below the magic number? If so, then you need a Profit Coach. Contact me today…
very nice