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Port of Subs
Port of Subs
In 1972, two brothers from New Jersey opened a modest submarine shop in Sparks, Nevada called the “Sub Shop”. John Larsen, a Public Accountant who had been advising the Sub Shop owners, saw an opportunity and bought the business in 1975. After taking the helm, Larsen sponsored a community-wide contest to choose a name for the Sub Shop. In a review of more than 10,000 contest entries, Larsen chose the name...”Port of Subs”.
Between 1975 and 1985 the Larsens developed 10 company-owned units. Many people approached them asking for units in other cities because of the outstanding quality and taste of their products. So, with dreams of expansion, they began franchising in 1985 – and according to John Larsen, their timing couldn’t have been worse.
Sub shops are typically located in shopping centers. In the late 1980’s the country had just come through the savings and loan crisis. Shopping centers defaulted, folded and closed. By the end of 1989, the future of Port of Subs was in jeopardy.
In 1990, John contacted the counselors at the Nevada Small Business Development Center. NSBDC put together a team including UNR students to help John identify his customer profile and where he was losing money. They did a market survey of customers inside the stores. And, most importantly, according to John, they made him think through his business plan. They helped him create a marketing and advertising plan to draw customers, and how to be ready to grow again when the time was right.
John sold a few franchises, but also opened several more company owned stores in Las Vegas – this time, based on the results of the NSBDC counseling and surveys. Right away Port of Subs turned the corner from losing money to profitability.
Most franchisees received SBA financing. Almost all of the early growth was through SBA guaranteed funding. Today SBA programs make up 50-60% of franchise funding.
Today Port of Subs has over 350 employees in 150 stores, of which 30 are company owned and the rest, franchises. John says, “It’s an interesting and trying time, but overall we’ve survived it pretty well. But we would have folded if we’d not gotten help to identify who customer is, how to select store sites, how to create a business plan and how to access SBA guaranteed funding. We came to understand how all the pieces fit together – and it’s brought us success.”