Risk Score
Pending analysis
Investment Range
$169,750 - $578,400
Franchise Fee
$50,000
Min Cash Required
$25,000
Total US Locations
2
Business Summary
Port of Subs offers regional developer franchises that support the establishment and operation of Port of Subs restaurants. As a regional developer, individuals recruit prospective franchisees for restaurants that specialize in a variety of made-to-order submarine-type sandwiches, hot sandwiches, salads, catering trays, wraps, desserts, beverages, and other quick-service food items. The regional developer also provides ongoing support to these Port of Subs restaurants and assists the franchisor in operating the overall franchise network.
Corporate History
POS Franchising, LLC was formed as a Delaware limited liability company on November 10, 2022. It is a wholly-owned subsidiary of POS Holdings, LLC, which is, in turn, a wholly-owned subsidiary of Area 15 Ventures, LLC. The Port of Subs brand itself has a longer history, with its predecessor, Port of Subs, Inc., incorporated in 1985. The first Port of Subs restaurant originally opened as 'The Sub Shop' in September 1972 in Sparks, Nevada, and rebranded to 'Port of Subs' in 1976. Port of Subs, Inc. offered franchises from November 1985 until January 2023. In March 2023, POS Holdings acquired substantially all of Port of Subs, Inc.'s assets, and POS Franchising, LLC assumed existing franchise agreements. POS Franchising, LLC began offering regional developer franchises in 2023. An affiliate, POS Operations, LLC, now manages company-owned Port of Subs restaurants. Another affiliate, Daddy's Chicken Shack Franchising, LLC, began offering franchises for its restaurant and regional developer businesses in 2021 and 2022, respectively.
Financial Overview
Investment Range
$169,750 - $578,400
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$500,000
Minimum Cash Required
$25,000
Equipment Costs (Low)
$6,500
Equipment Costs (High)
$10,000
Working Capital
$32,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Port of Subs' financial statements show a notable shift in performance from 2023 to 2024. The company recorded a net loss of $999,059 in 2024, a decrease from a net income of $250,883 in 2023. Cash balances significantly decreased from $1,839,078 at the end of 2023 to $694,955 at the end of 2024. Member's Equity also saw a substantial decline, from $3,013,695 in 2023 to $1,140,456 in 2024. Additionally, the company used cash in its operating activities in 2024, a change from providing cash in 2023. The Adjusted EBITDA also decreased from $906,564 in 2023 to $349,164 in 2024. The independent auditor, however, issued an unqualified opinion on the financial statements for 2024, indicating they present fairly, in all material respects, the financial position of the company.
Financing Details
Port of Subs does not offer any direct or indirect financing arrangements to its regional developers. The franchisor also does not guarantee any notes, leases, or other financial obligations for its regional developers.
Performance Metrics
Total US Locations
2
Franchised Units
2
Corporate Units
0
Avg Square Footage
800
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Port of Subs has no litigation history to report. Item 3 of the Franchise Disclosure Document explicitly states that no litigation is required to be disclosed.
Bankruptcy History
Port of Subs has no bankruptcy history to report. Item 4 of the Franchise Disclosure Document explicitly states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Regional Developer Agreement, Port of Subs regional developers must provide written notice of their intent to renew between 12 and 18 months before the initial term ends. They must be in good standing, having not received more than three written default notices and no current defaults. All monetary obligations to Port of Subs and its affiliates must be satisfied. Regional developers are required to sign a general release of claims and execute Port of Subs' then-current regional developer agreement, which may have different terms. They and their personnel must meet current qualification and training requirements. A new development schedule must be agreed upon, and the regional developer's office premises must conform to current standards, with evidence of continued possession for the renewal term. A renewal fee, calculated as $10,000 multiplied by the number of open and operating Port of Subs restaurants in the regional developer's territory, is also required.
Training & Support Program
Franchisor Assistance
Port of Subs provides extensive assistance to its regional developers both before and after their business opens. Prior to opening, the franchisor offers initial training in the Port of Subs System, methods, and procedures, along with pre-opening support and access to confidential brand standards and other manuals. It also provides merchandising, marketing, and general advice. Once the regional developer business is operational, Port of Subs continues to offer ongoing training, access to updated manuals, marketing advice, and periodic individual or group consultation via personal visits, phone, mail, or email. The franchisor also distributes bulletins, brochures, and reports regarding its plans and developments. Regional developers must use a specified Computer System for operations and are supported with its ongoing requirements and modifications.
Initial Training Hours
425
Training Location
Online, Reno, Nevada; Denver, Colorado; and other designated training facilities
Ongoing Support
After opening, Port of Subs regional developers receive ongoing training as designated by the franchisor and continued access to updated brand standards and other manuals. The franchisor provides merchandising, marketing, and other related advice as it develops. Regional developers also receive periodic individual or group advice, consultation, and assistance through personal visits, telephone, mail, or email. Bulletins, brochures, and reports regarding the franchisor's plans and activities are provided. Regional developers, their Operating Principal, and other designated individuals may be required to attend refresher courses, seminars, and additional training programs for up to 10 days annually. Attendance at an annual convention for up to three days per year, at the regional developer's expense, is also required, as are RD Quarterly Meetings.
Franchise Requirements
Ideal Candidate Profile
Port of Subs seeks qualified applicants to become regional developers who can establish and operate a regional developer business. The ideal candidate will designate an Operating Principal who owns at least 5% of the equity interest in the regional developer entity, has completed all required training, and is approved to supervise the day-to-day operations. Additionally, the regional developer must designate a General Manager, also subject to franchisor approval and successful completion of training, to oversee daily operations and personnel. The Operating Principal and General Manager can be the same person if qualified. The franchisor also negotiates the regional developer territory fee based on the expertise and capital of each prospective regional developer.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
commercial
Owner Participation
hands-on
Territory Type
non-exclusive
Territory Size Requirements
Port of Subs regional developer territories are defined based on several factors, including the population base (with fees adjusted for populations exceeding 500,000 based on 2020 U.S. Census Bureau figures), population density, growth trends, apparent affluence of the population, density of residential and business entities, traffic generators, driving times, and major topographical features like rivers, mountains, major freeways, and undeveloped land areas. Each territory may encompass one or more regions within a geographic area.
Staffing Notes
Port of Subs requires regional developers to maintain a competent, conscientious, and trained staff sufficient to promptly service franchisees and solicit prospective franchisees. This staff must include at least one manager on duty at all times. Regional developers are also responsible for ensuring their employees maintain good customer relations and adhere to prescribed dress codes. Additionally, the regional developer must designate an Operating Principal, an owner with at least 5% equity, to personally participate in and supervise day-to-day operations, and a General Manager to directly oversee daily operations and personnel. Both the Operating Principal and General Manager must successfully complete the franchisor's training programs and be approved by Port of Subs.