Submarina California Subs Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$182,500 - $370,250
Franchise Fee
$10,000
Total US Locations
14
Business Summary
Submarina Franchise of California, LLC operates a retail business known as a SUBMARINA® Store or SUBMARINA CALIFORNIA SUBS® Store. These stores offer submarine-style sandwiches made with hand-sliced-to-order meats and cheeses, served on freshly baked artisan breads. In addition to sandwiches, Submarina stores also sell side items, soft drinks, chips, and other related food items.
Corporate History
Submarina Franchise of California, LLC was formed as a Texas limited liability company on July 12, 2017. Soon after its formation, in July 2017, the company acquired the assets of Submarina, Inc., which had been operating under Chapter 11 bankruptcy. California Subbros, Inc. then purchased Submarina Franchise of California, LLC on October 6, 2017. Submarina Franchise of California, LLC began offering franchises for its retail sandwich shops in October 2017.
Financial Overview
Investment Range
$182,500 - $370,250
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$15,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$142,500
Equipment Costs (High)
$255,000
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Submarina Franchise of California, LLC's financial statements show an unqualified audit opinion, indicating fair presentation of its financial position. The company reported a net income of $447,847 for the year ended December 31, 2023, with retained earnings of $1,808,401. However, the financial notes disclose a significant related party receivable of $173,000 from an affiliated University City franchise location. This loan was provided to assist the affiliated store with initial expenses in 2021 and 2022, and for general operating losses in 2023. Submarina Franchise of California, LLC does not expect to collect this $173,000 receivable in 2024, which could impact its future cash flow and financial position.
Financing Details
Submarina Franchise of California, LLC does not offer any direct or indirect financing to its franchisees. Additionally, Submarina Franchise of California, LLC does not guarantee any of the franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
14
Franchised Units
10
Corporate Units
4
Avg Square Footage
1,750
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Count
1
Litigation Summary
Submarina Franchise of California, LLC's predecessor, Submarina, Inc., filed for Chapter 11 bankruptcy reorganization in October 2012. As part of these bankruptcy proceedings, the predecessor also filed an adversary proceeding in March 2013 against several of its franchisees for not paying royalties and advertising contributions. The predecessor alleged various causes of action including breach of contract and unjust enrichment, while some franchisees counterclaimed for breach of marketing fund management. Submarina, Inc. settled with five franchisees, and obtained a judgment against seven others. These judgments were later assigned to Submarina Franchise of California, LLC, which then released the franchisees from payment and dismissed its claims. The bankruptcy case was closed in July 2019, and the litigation concluded with it. There is no other litigation required to be disclosed.
Bankruptcy History
Submarina Franchise of California, LLC's predecessor, Submarina, Inc., filed a voluntary Chapter 11 bankruptcy petition for reorganization in October 2012. As part of this bankruptcy proceeding, Submarina Franchise of California, LLC acquired the assets of Submarina, Inc. in July 2017. The bankruptcy case was officially closed in July 2019.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise, Submarina franchisees must notify Submarina Franchise of California, LLC of their intent to renew between 12 and 24 months before the current agreement expires. They must be in good standing, having complied with all material terms of their current agreement and paid all outstanding amounts owed to Submarina Franchise of California, LLC, its affiliates, suppliers, and landlord. Franchisees must also prove their right to occupy the store premises and, if requested by Submarina Franchise of California, LLC, renovate or modernize their store to meet current brand standards. They must meet current qualifications and training requirements, sign Submarina Franchise of California, LLC's then-current franchise agreement (which may have different terms), and pay a renewal fee equal to 50% of the then-current initial franchise fee for subsequent stores. Additionally, the franchisee and each owner must sign a general release in favor of Submarina Franchise of California, LLC.
Training & Support Program
Franchisor Assistance
Submarina Franchise of California, LLC provides pre-opening and ongoing support to its franchisees. Before a store opens, Submarina Franchise of California, LLC offers site selection assistance and will review proposed locations. Franchisees receive access to the operations manual and a list of approved suppliers. Initial training is provided, along with on-site pre-opening consultation and 10 days of on-site opening assistance for the first store, for which a $5,000 fee is charged. For subsequent stores, additional assistance is available for the then-current opening assistance fee. After opening, Submarina Franchise of California, LLC offers ongoing consultation and advice, including new product development, operational and management instruction, and marketing and financial guidance. This support is delivered through store visits, meetings, seminars, and electronic materials. Submarina Franchise of California, LLC also administers the Brand Development Fund, provides advertising materials, and grants access to proprietary software programs.
Initial Training Hours
174
Training Location
La Mesa, California
Ongoing Support
Submarina Franchise of California, LLC provides ongoing support to its franchisees after store opening. This includes continuous consultation and advice on new product development, store operations, and management, as well as advertising and marketing strategies, and financial guidance. Support is delivered through various channels, such as visits from Submarina Franchise of California, LLC personnel, meetings, seminars, and printed or electronic materials. Submarina Franchise of California, LLC also provides updated lists of approved suppliers and administers the Brand Development Fund, offering advertising and promotional materials for local marketing efforts. Additionally, franchisees gain access to proprietary software programs developed for the system.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
non-exclusive
Staffing Notes
Submarina Franchise of California, LLC requires that each Submarina store be supervised on-premises by an Operating Principal. For single-store owners, this Operating Principal must devote full-time efforts to the store's management and operations. If a franchisee operates multiple stores or if the Operating Principal cannot commit full-time, a dedicated District Manager must be appointed, who must also devote full-time efforts to store operations and management. Submarina Franchise of California, LLC requires franchisees to maintain a competent, conscientious, and trained staff, ensuring good customer relations and high-quality service. All employees must wear uniforms and maintain a neat appearance according to Submarina Franchise of California, LLC's standards. Submarina Franchise of California, LLC does not dictate specific hiring practices, but franchisees are responsible for adhering to all federal and state employment laws. Employees must be clearly informed that the franchisee, not Submarina Franchise of California, LLC, is their employer.