How you ever wondered what the subway startup cost could be? In this post, I’ll answer the question and tell you everything else you need to know about opening a subway.
That’s not all; you’ll also discover:
The best way to proceed by purchasing an existing Subway franchise
What is the best way to launch a subway franchise?
Price and value control for Subway franchises
There are several Subway franchise opportunities to select.
So, if you want to start a subway franchise this year, this guide is for you.
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Article Road Map
What’s a subway?
Subway is a privately owned American organisation that owns a vast chain of fast-food restaurants mainly serving submarine burgers, salads, and pizzas.
It is also one of the least expensive big fast-food franchises.
How Much Does a Subway Franchise Cost?
If your Subway application offer is approved, you will be required to pay a franchise fee of $15,000 to use the Subway brand.
According to the firm, such startup costs may include building and machinery lease costs ranging from $105,800 to $393,600.
As opposed to a restaurant like McDonald’s, which needs as much as $2.2 million in opening costs alone, as well as a $45,000 franchise fee, we may conclude that Subway restaurants are much less expensive to open.
Subway restaurants often do not make as many sales as McDonald’s units.
A subway restaurant produces an average of $422,000 in profits per year, equivalent to $2.6 million for McDonald’s restaurants.
Subway also charges hefty recurring payments to its numerous restaurant franchises.
Subway restaurant franchisees are paid an annual royalty fee of 8% of gross revenue and a promotional fee of 4.5% of Subway sales reported by Franchise Direct.
This means that 12.5% of each restaurant franchise’s income is returned to Subway Corporate.
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Note
Subway’s franchise fee is essentially a cover charge for entering the scheme and taking advantage of the franchisor’s experience.
The franchise charge for Subway is payable in full the moment the franchise agreement is sealed.
For eligible US veterans who decide to buy a franchise, the brand is currently offering a discount on the franchise price.
Subway franchisors can also fund $10,000 of the franchise fee if the franchisee is buying their first franchise and meets the requirements of a minority loan scheme.
A comparable loan scheme may be made available to franchisees buying a franchise in a low-density market.
Subway also offers a $5000 discounted franchise fee to franchisees who choose to open a satellite restaurant. However, if the satellite is only going to be operational for a year, the fee may be limited to $1000.
Subway franchise fees are entirely for satellite restaurants housed in the same facility as the main Subway restaurant.
Subway is now waiving the initial franchise charge for oil industry stores and school lunch sites with at least 50 units that can turn an existing sandwich business they own and run at their plant into a Subway restaurant.
Variations in the final Subway franchise expense and benefit are determined by factors such as real estate prices, the scale of the Subway restaurant being opened, repairs that must be completed, and certain other factors such as the amount of traffic the restaurant receives during its initial months.
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Subway Franchise Cost and Profit
This is a rundown of the expense and benefits structure for a Subway franchise::
- Initial franchise fee: $15,000
- Real property fee: $2,000 to $12,000
- Leasehold improvements: $59,500 to $134,500
- Equipment improvements: $4,500 to $7,500
- Security system (not including monitoring costs): $2,000 to $6,000
- Outside signs: $2,000 to $8,000
- Opening inventory: $4,400 to $6,050
- Insurance: $1,200 to $5,000
- Training expenses (including travel and lodging): $2,500 to $5,000
- Legal and accounting: $1,000 to $3,500
- Opening advertisement: $2,500 to $4,000
- Additional expenses (within a 3 month period): $12,000 to $42,000
- Estimated total investment: $116,600 to $263,150
Read Also: How old do you have to be to work at Subway?
Starting a Subway Franchise
Subway restaurants have proved to be a top-performing business chain and have piqued the interest of many people.
To own an existing Subway franchise, you must have a net worth of at least $80,000 and at least $30,000 in liquid assets.
This liquid asset condition is the amount of money that a franchisor recommends a franchisee have in reserves to reach immediately in the event of an emergency or setback before starting the company.
It also pays for the Subway franchisee’s daily living costs before the franchise unit generates a profit big enough to earn a sufficient take-home income.
Ten Basic Steps to Startup a Subway
- Obtain a Subway franchise brochure.
- Fill out a franchise questionnaire.
- Meet with a local business growth representative.
- A look over the disclosure document
- Secure funding by local research
- The execution of a franchise deal
- Secure a site for your restaurant’s construction.
- Begin making money as a Subway franchisee.
When submitting a copy of the Subway franchise brochure, you will be asked to have some information to help you get started on your Subway trip.
Important Information to make available
- Your given name
- Last name/family name
- Phone number (with area code/country and city code) Email address
- Country, state, or province
- Zip/postal code of the city
- Language of preference
However, please keep in mind that completing the questionnaire for your Subway franchise brochure would not obligate you to buy the franchise.
Only information about Subway franchise opportunities you will receive through this form.
The franchise application for Subway is not a job application.
The proposal is to purchase a new Subway franchise, a second franchise, or an existing Subway franchise.
You and your boss or designee will attend a 2-week intense program until your application request is processed.
Things to Expect When Your Subway Has Been Accredited:
- Access to their proprietary formulations and operating frameworks.
- A shop construction standard as well as machinery ordering instructions.
- Choosing a Location.
- Access to many educational programs.
- Manual of basic procedures.
- During the opening, a Subway field delegate.
- Menu research and development.
- Evaluations daily and ongoing assistance.
- Educational publications.
Subway now has over 44,800 stations worldwide.
In 1965, Fred DeLuca and Dr Peter Buck opened the first Subway restaurant in Bridgeport, Connecticut, USA.
Subway Franchise Opportunities
Subway franchise opportunities put in place by the venue, scale, and degree of renovations necessary. The types of Subway franchises divisions may include:
- Typical places
- Unusual places
A typical Subway restaurant is one that you can find in a standard shopping centre or on a street corner.
You can find a non-traditionally Subway restaurant in airports, hospitals, bus stations, schools, truck stores, or other locations together with different business operations.
Subway franchise alternatives are typically operated by established Subway franchisees who have shown a high level of success in the Subway system.
The fact that you own a convenience store or some other non-traditional venue gives you an advantage when purchasing a Subway franchise for that location.
Subway is keen to operate environmentally and economically conscious restaurants and operations.
The brand manages its enterprise in such a manner that it generates revenues for its different franchisees while minimising its environmental effects, thus enhancing the lives of its clients, distributors, franchisees, workers, and communities worldwide.
A Subway Franchise’s Revenues
Subway sandwiches and the Subway company are well-known, allowing it to be a top sales leader in the fast-food sandwich industry. Subway had revenue of $10.4 billion in 2018, according to the most recent available data.
Final Thoughts
A Subway franchise is a good choice for entrepreneurs who love opening a franchise business because it has the advantages of an existing business, low investment costs, and parent company sponsorship.