Subway has the most stores in the world, making it one of the largest fast-food companies. Made entirely of franchises, Subway is known for selling delicious, freshly made sandwiches to customer specifications.
If you’re interested in opening your own store, you may be wondering how much a Subway franchise costs, how you can open one, and if it’s worth opening a Subway store. I’ve done the research, and here’s what I’ve found out!
Key Takeaways
How Much Does A Subway Franchise Cost In 2022?
Subway charges a $15,000 fee to stores to become a franchise, making it one of the cheapest fast-food restaurants to franchise as of 2022. Additionally, there may be additional start-up costs for a Subway, ranging from around $100,000 to $250,000. Also, Subway offers information and advice on its website for those wanting to open a Subway franchise.
For more information on opening a Subway franchise, including legally what you need to do to open your Subway franchise, how much you can potentially make from a Subway franchise, and more, keep reading!
How Much Does It Cost To Open a Subway Franchise?
The cost to open a Subway franchise can vary depending on your location and include factors such as property and insurance costs.
However, Subway charges businesses a $15,000 fee to become a Subway franchise, which franchisees must pay when the contract is signed.
Moreover, Business Insider has outlined some of the other potential costs of opening a Subway franchise, including the property costs ($2,000-$24,000) and equipment costs ($3,000-$65,000).
Additional costs for opening a Subway franchise can include exterior signs ($1,200-$21,000), security systems ($1,000-$7,500) and opening inventory ($2,500-$10,000).
Also, you may need to invest in training costs, which can vary from $2,000 to $7,000, and legal and accounting fees, which can be $400 to $8,000.
On average, it costs between $100,000 and $250,000 to open a Subway franchise.
What Fees Does Subway Charge Franchises?
Subway collects revenue from its franchises and charges franchises a weekly fee of around 12.5% gross revenue, minus the sales tax.
With that, Subway has stated that it uses 8% towards the franchise royalty and the remaining 4.5% for advertising to promote the brand further.
Is It Worth Opening A Subway Franchise?
Yes, a Subway franchise is worth opening as it has lower start-up costs than its competitors, such as McDonald’s.
While Subway charges a $15,000 franchise fee, McDonald’s charges $45,000 and can cost as much as $2 million in start-up fees.
Therefore, opening a Subway franchise can suit those who wish to start a franchise, mainly because Subway has an established fan base and reputation.
Moreover, choosing to open a Subway franchise in an area without a nearby Subway could be a lucrative business.
How Much Profit Does a Subway Franchise Make?
On average, a Subway restaurant generates around $400,000 in sales annually. From this, around $40,000 is profit.
How Can I Open a Subway Franchise?
If you want to open a Subway franchise, various steps need to be taken, including paying the franchise fee and securing the rights to the franchise.
First, request a Subway franchise kit directly from Subway. The franchise kit from Subway doesn’t mean you have to open a store.
Instead, it supplies all the relevant information to open a Subway store, such as training, costs, and skills.
If you choose to open a Subway franchise, you need to secure adequate finances required to run the store.
Also, you need contracts from an attorney to ensure all your money is legally sound before you can open your Subway franchise.
After this, submit your application to Subway regarding the potential franchise you wish to open.
In this, you should outline all your experience, information, and talent, as well as when and where you would like to open.
If Subway approves your franchise application, it asks you to finalize the contract.
With that, it’s recommended you consult legal counsel to ensure you fully understand all terms and conditions of the Subway contract.
Once you sign the Subway contract, you will be required to pay the $15,000 franchise fee.
Then, you need to attend training at one of Subway’s 12 training centers around the world.
Additionally, Subway hosts trade shows where you can collaborate with other franchise owners, try new Subway products, and learn more about the business.
Finally, you are required to apply for relevant permits and licenses, arrange the store layout and hire staff for your Subway franchise.
That said, you may need to train the team you hire for a Subway store.
After these steps, you can then open your Subway franchise.
According to Subway, it’s best to host a grand opening with marketing and advertising to draw attention to your store and entice customers to attend.
Where Can I Open A Subway Franchise?
There are many options for opening a Subway franchise, including non-traditional locations such as colleges, hotels, or airports.
Before you can open a Subway franchise, you must have your potential business site approved, including proving you have done the adequate market research to ensure the business’s success.
That said, many franchisees open Subway restaurants in highly populated areas that guarantee a high rate of customers, such as malls.
Ideally, Subway stores should have space for seating, as well as generous room for food preparation.
Also, it’s possible to purchase an existing Subway franchise that the owner wishes to sell, which makes it more likely to be approved.
Does Subway Offer Information On Franchising?
If you’re interested in opening your own Subway franchise, the Subway website offers a range of information on how to begin.
For example, Subway’s website offers information such as the cost of the franchise fee and royalty and advertising fee, as well as how much money you may make.
To know more about Subway, you can also see our posts on the first Subway location, who owns Subway, and why is Subway so expensive.
Conclusion
A Subway franchise generally costs around $100,000 to $250,000 to open, including a $15,000 franchise fee to Subway.
Also, franchisees must pay 12.5% of the weekly revenue to Subway for marketing and franchise fees.
If you wish to open a Subway franchise, you can contact Subway and begin the application process.
However, you need to ensure you have the personal finances and experience to open a Subway franchise and have an excellent location for your store.