We’ll sum up our analysis of the Subway franchise investment possibility in this article. This is for many of our international clients who have asked about the cost and profitability of a Subway franchise. We’ll talk about whether buying a franchise is a good or terrible investment.
Franchise ownership is favored by many business owners in the small business sector over the creation of original ventures.
Franchisee business owners profit from the franchisor’s licensing of the policies and practices of an established company.
These license advantages offer the business owner a number of perks, including affiliation with a well-known company and assistance from a proven branding plan.
Subway is a very reputable licensee of its sandwich shops in the fast food business.
With more than 37,000 locations, Subway really ranks among the biggest fast-food chains in the world in terms of the number of stores.
It should come as no surprise that it is also one of the most sought-after franchise opportunities.
How Much is it to Get a Subway Franchise?
In the fast food industry, Subway has a lengthy history. In 1965, creator Fred DeLuca founded the first location of this privately held business in Connecticut under the name “Pete’s Subway.”
Due to its strong foundation, the business has been able to strategically brand both its sandwiches and the fast food industry as a whole. The business had rapid growth between 2013 and 2017.
The total number of stores globally has increased to about 37,000 locations as of 2023 because of this growth and further growth that has occurred subsequently.
Subway Franchise | The Profitability of Subway
We firmly believe that investing in the United States at the moment is a bad idea and a bad franchise. And there are several causes for this.
In a nutshell, Fred DeLuca and Peter Buck created Subway in 1965 in Bridgeport, Connecticut. With more than 44,000 locations globally, Subway has since grown to be one of the biggest franchises in the world.
Top 10 Reasons to Invest in a Subway Franchise
- Established Brand: Subway is a well-known and respected brand with a global presence.
- Proven Business Model: Subway’s franchise model has been successful for decades.
- Low Start-Up Costs: Compared to other franchises, Subway has relatively low start-up costs.
- Training and Support: Subway offers extensive training and ongoing support to franchisees.
- Menu Diversity: Subway offers a wide variety of sandwiches, salads, and sides to appeal to diverse customer preferences.
- Healthy Options: Subway is known for its healthier options, including low-fat sandwiches and fresh vegetables.
- Innovation and Technology: Subway continually invests in technology to enhance the customer experience and streamline operations.
- Flexibility: Subway offers various franchise models, including traditional brick-and-mortar stores and non-traditional locations like airports and convenience stores.
- Community Involvement: Subway encourages franchisees to get involved in their local communities through sponsorships and partnerships.
- Growth Opportunities: With over 40,000 locations worldwide, Subway offers ample opportunities for franchisees to expand their business and increase their profits.
How Much is a Subway Franchise?
The initial non-refundable franchise cost for your first Subway franchise is $15,000.
The total initial investment required to open a Subway franchise ranges between $207,050 and $476,900 for a standard site and between $167,600 and $343,900 for a non-traditional location. This includes a fee of between $22,370 and $44,830 to the franchisor.
Furthermore, Subway charges you royalty fees of 8% of total sales and advertising fees of 4.5% of gross sales while you are in business.
Other expenses are associated with franchising the business. To start the business, you must pay a $15,000 starting licensing fee and have a net worth of $150,000 with $100,000 in liquid assets.
The following is a breakdown of the franchise cost:
Subway Franchise Outlet Summary from 2018 to 2020
|Outlet type||Year||Outlets at the Start of the Year||Outlets at the End of the Year||Net Change|
|1. U.S. Franchised||2018||25,906||24,798||-1,108|
|2. U.S. Company-Owned||2018||0||0||0|
|U.S. Total Outlets||2018||25,906||24,798||-1,108|
The Bottom Line
A Subway franchise is a fantastic alternative for entrepreneurs interested in launching a franchise business because of the benefits of an established business, minimal beginning expenses, and parent company support.