Entrepreneurs

From $100 to 1000 stores: The surprise success of Firehouse Subs

When Chris and Robin Sorensen opened their first Firehouse Subs in 1994, they had less than $100 in their checking accounts.

"It basically had to work that first day," Robin tells CNBC.

The brothers, both second-generation firefighters, were broke even before they turned their vision of Firehouse into reality.

"We both loved to cook and we had actually had a bunch of ideas for other restaurants when we were younger. But it was all dreaming — it was never serious because we didn't have any money," says Robin, who was 26 when the flagship restaurant opened in his hometown, Jacksonville, Florida.

Firehouse co-founders Chris and Robin Sorensen with their dad, Captain Rob Sorensen, who worked for the fire department for 43 years.
Firehouse Subs
Firehouse co-founders Chris and Robin Sorensen with their dad, Captain Rob Sorensen, who worked for the fire department for 43 years.

Little did the brothers know that being broke would work to their advantage.

"If we had the money if we had opened up Firehouse when we first came up with the idea two years prior, we would've never made it," Robin says.

"Even though I didn't understand it at the time, being broke forced us to be patient, and that patience really turned out to be a service. We were able to learn a lot more about the business and grow at the right pace."

The original Firehouse Subs opened in 1994 in Jacksonville, Florida.
Firehouse Subs
The original Firehouse Subs opened in 1994 in Jacksonville, Florida.

The brothers, who were able to finance their sub shop thanks to loans from family and friends, maintained their "broke mindset" even after Firehouse started taking off.

For several years at the beginning, "I took home a couple hundred bucks a week, enough for me and my family to get by," Robin explains.

And his older brother stayed on with the fire department for four years after the restaurant opened to maintain income. Robin explains, "Chris continued working at the fire department until late 1998, which was great, because we didn't have to pay him during that time."

Besides Robin's salary — which came out to $12,000 to $15,000 a year — the co-founders only had to pay one employee at the beginning. The rest of their staff was family.

"We kept it lean," says Robin. "Ultimately, our frugality and discipline with money is one of the main reasons we're still here. It was critical to our survival."

Brothers and co-founders Robin (L) and Chris (R) Sorensen.
Firehouse Subs
Brothers and co-founders Robin (L) and Chris (R) Sorensen.

Even after the company became completely debt free in 2001 and started growing consistently, the brothers refused to take profits until 2004, exactly 10 years after opening their first store. On the 10-year anniversary, they took out about a third of what Firehouse made that year and both used the money to pay off their personal houses.

"Focusing on the right things back then, and not focusing on profitability and trying to be rich, really served us well," Robin tells CNBC. "Of course, you have to be profitable, but it was never about making big money for us."

Today, Firehouse Subs is a booming national franchise, with over 1,023 locations.

"We were two broke guys with minimal experience, and to think about where we are today is insane," Robin says. "Less than 40 brands in America have more than 1,000 restaurants. We're in a small group, which we're very proud of, but we're always moving forward."