Here's How Much It Really Costs To Open A Subway Franchise
With more than 21,000 Subway franchises in operation across the U.S., opening up a branch of the well-loved sandwich business for yourself must appeal to the entrepreneurial spirit. You get to be your own boss while benefiting from built-in brand recognition, a set menu, and on-going support straight from corporate. Sounds like a win-win. But just how much does it cost to open up a Subway franchise?
Subway is known as one of the cheapest franchises in the fast food industry. This may be why their number of unique franchises is the highest in the world — totaling 41,600 storefronts as of 2019 (via Investopedia). From the franchise fee to start-up costs to royalties paid back to Subway global headquarters, there are various costs to calculate. Franchise Direct estimates the total cost for the first three months of franchising a Subway between $100,550 and $342,400 — depending on restaurant location and whether the franchise is considered traditional (a restaurant only) or non-traditional (located within a gas station, airport, sports arena, national park, etc.).
Subway's franchise fee
In short, there is no magic number for costs associated with opening a Subway. Though one cost is pretty much set in stone: The $15,000 franchise fee, an initial licensing fee, paid to Subway (via Investopedia). Due at the time of signing the franchise agreement, according to Franchise Direct, this fee grants the new business owner access to Subway's trademark, operating system, and training.
Though there are exceptions to the rule. Veterans get a special discount on the franchise fee, and the fee is waived entirely for qualifying school lunch locations and oil company retailers (via Franchise Direct).
Other costs that are necessary to open a Subway franchise are variable. Start-up costs — a catch-all category for real estate, construction expenses, and the leasing of equipment — can fluctuate to the tune of hundreds of thousands of dollars. Then there's a liquid cash requirement of $30,000 that new franchisees will need to have set aside for emergencies (via Franchise Direct). Once in business, Insider reports the average Subway franchise can anticipate $422,000 in annual sales.