A Subway franchise continues to be one of the most considered options for “would-be” businessmen. Subway fills a basic need of consumers in a speedy and convenient manner. But what if there are other options, like a car wash business franchise?
This article will compare the two franchises so you can learn the differences between them and hopefully help you decide which one is the better option for you.
Comparison: Subway franchise vs DetailXperts franchise
Industry Statistics, Market Share, Prospects and Growth Opportunities
Subway belongs to the sandwich and sub store franchise industry which has managed to be eminent for the past five years during the US economic recovery. It stood at fifth place in an industry that averaged some P22 billion total revenues with an annual growth rate of 2.4% for the past 10 years and employed 518,888 people from a total of 26, 740 businesses.
This industry has kept the consumers’ appetites satisfied, having developed new menu options that took advantage of the market’s preference for a low-fat diet. It also grew by introducing products at prices that went along with the slow economic recovery, resulting in a strong revenue growth for the industry.
The same trends are expected to continue and contribute to revenue growth in the next five years until 2020. Aggressive international expansion will also give impetus to major franchise’s overall revenue projections, like that of the Subway franchise.
For the past five years ending in the year 2015, the increasing per capita disposable income has enabled consumers to spend more on discretionary services, such as car washes.
No company has the sole dominant share of the market in this industry. Total industry revenue has totaled $9 billion in 2015. In 2o12 alone, wash counts grew by 17%, while the average revenue per car wash grew by 2.6 percent.
The industry had an annual growth rate of 2.7% in the past 10 years and a projected steady growth in the next 5-10 years due to (1) the increasing trend in local regulations to prohibit residential car washing, and 2) the projected continuous increase in the number of vehicles in use in the whole United States. It employs 194, 594 people in 61, 332 business enterprises.
For the Subway franchise, this consists of the cost of the franchise and other related fees.
For the DetailXPerts option, this is relatively lower as shown in the next section.
Business Model and Requirements
A franchise typically involves the granting by one party (a franchisor) to another party (a franchisee) the right to carry on a particular name or trade mark, according to an identified system, usually within a territory or at a location, for an agreed upon term. The franchisee is granted a franchise license to use the franchise company’s trademarks, systems, signage, software, and other proprietary tools and systems in accordance with the guidelines in the franchise contract.
Not only must you run the business according to the operations manual and the franchise contract, but you must pay them an upfront franchise fee (license fee), and ongoing royalties. The average franchisee fee ranges from $25,000 -$35,000, although some franchise fees can go well over $100,000, as in the case of what’s called a Master Franchise.
In a Master Franchise, one buys the rights to an entire area, and it’s usually based on population. For the Subway franchise, for example, franchise fees is from USD 116,600-263,150, while for ventures like DetailXPerts, it runs from USD 70,000 to 156,000.
The royalties are usually based on a % of gross sales. Royalties range anywhere from 4% all the way up to 9%. Some franchisors charge a flat monthly royalty fee. For Subway, this royalty is at 8% of gross revenues, while it’s only 6% for DetailXPerts.
In addition to royalties, franchisees usually pay into a national monthly advertising/marketing fund, which amounts to 1-2% of gross sales. Again for Subway, this is at a high 4.5% of gross revenues but only 2% for DetailXPerts.
Why Go Into the Car Wash Business Instead of a Subway Franchise?
In summary, if you want to go into the franchise business and you happen to be:
- Environment-friendly and is into preserving nature’s resources, such as water, because it uses only 2 gallons of water to clean 15 vehicles;
- Want to be part of an industry with a lot of potential growth;
- Prefer affordable entry fees/initial investment; low costs or when it comes to royalty/advertising fees
- Take advantage of a relatively new industry with greater potentials for growth ; which is just being just getting known internationally
- Less saturated bigger umbrella market – for Subway, it is the food business which is already highly saturated; for DetailXPerts, it’s the car market which has a lot of potentials for growth; and
- The ability of the business to be mobile and flexible and of course, profitable – the Eco Auto Spa that is DetailXPerts can be managed from various sites like hotels, parking garages and country clubs and practically brought to clients!
Consider investing into the DetailXPerts franchise. It has better potentials in the long-term. We invite you to check out this investment at http://detailxperts.net/.
Wishing you the best of luck on your investment!
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