About Subway Franchise Information. Approximately 4.5 Lakhs is charged as Franchisee Fee and 3.5% to 8% of the net sales are charged towards Royalty Fees and Advertising cost. This means that the franchisee is allowed to advertise their Subway franchise as long as it fits in with the Subway brand. Total Investment $105,800 - $393,600 During this time, Subway’s marketing focused on how it was the healthiest fast-food option in the market. The following are historical shots of the Subway fast-food chain of restaurant franchises: Do you know how much franchising a Subway cost? The Subway Franchise opened its first restaurant in the year 1965 and was founded by Fred DeLuca. While Subway is much more accessible to franchise than other fast food restaurants, it eats up a much larger portion of their franchisees’ gross sales. Detailed Estimates of Subway Franchise Costs Based on Item 7 (Estimated Initial Investment) of Subway’s 2013 Franchise Disclosure Document. SEE: Sample Subway Franchise Business Plan. This has allowed Subway to gain the “healthy” fast food advantage in an industry where health is a hard-to-reach advantage. Your best course of action is to develop a business model, invest in market research, and look at the area you plan to open a Subway in. As noted in the chart above, the standard Subway franchise fee is $15,000. In the past, Subway was in a league of its own as restaurants like McDonald’s, Arby’s, and White Castle had a different model. Subway Franchise Cost in India: The one question that every investor has in mind while looking for companies to invest in is how much will it cost him or her to own a franchise of that company. Compared to other fast food brands of this size, the initial investment for a Subway franchise is fairly modest. A Subway ® franchise is perfect if you want to be in business for yourself, but not by yourself, with the backing of a global brand and world-class training and support. For Subway, and most franchises, the franchise fee is due in full when the franchise agreement is signed. Not all small business owners have that kind of money on hand or have the means to get a business loan that large. Subway could not then claim to provide the healthiest and freshest ingredients when other businesses could claim they could bring produce in daily. In general, Subway restaurants earn less than McDonald’s restaurants. Yet, Subway’s popularity rivals the big names of the fast-food industry yet keeps its franchising costs low. Subway ® is always looking for talented individuals to join the team and become part of the success story. In this article, we will be taking an in-depth look into the Subway franchise, its history, the procedure of getting a Franchise with the company and the cost of starting a Subway Franchise. Cost Of Owning Subway Franchise – Discounted. Surprisingly, it exceeded the number of McDonald’s worldwide, with 33,749 branches – over a thousand more stores than McDonald’s. So, clearly, profiting from a Subway franchise may not be as easy as it seems. In 1965, Fred Deluca had just graduated from high school in Bridgeport, Connecticut, USA.Like many young adults his age, he had dreams of attending college. Aside from royalties, Subway franchisees are also required to pay another 4.5% of their gross sales to Subway as part of the ad fund fee. Actual costs will vary for each franchisee and each location. With its model making it relatively easier to franchise compared to other fast food franchises, it’s much easier to oversaturate a certain area with Subway franchises. You will also be expected to make an annual royalty fee of 8% of the annual gross sales. You will also be expected to make an annual royalty fee of 8% of the annual gross sales. Subway is in the process of testing certain locations that conform to special dietary preferences. Food franchises are also thriving well in the market, and among all, Subway stands as the top among franchise companies. Now the question is how much is a Subway Franchise? These numbers have to do with the fact that more Subways are opening but are not earning as much thanks to the increased competition. Interestingly its motto is “Eat Fresh”. HOW MUCH DOES A SUBWAY FRANCHISE MAKE?eval(ez_write_tag([[300,250],'startupback_com-large-leaderboard-2','ezslot_7',148,'0','0'])); As an entrepreneur, you might want to feed yourself with the information on the profit margin for any business you want to go into. It is highly unlikely that number has increased in the last eight years. In comparison, Subway franchises are much more affordable to the average small business owners in the United States. The investment amount required to acquire a Subway dealership can range from INR 53,90,000 to INR 89,10,000 . In order to open a Subway restaurant franchise, you must have a net worth of more than $160,000. Since then, thousands of franchises had had to close down due to the financial failure over the years. Like any business, you should start by doing thorough research on Subway, the profitability of franchises in your area, and available areas where you can set up your franchise. But because of how easy it is to establish a Subway franchise, two more can open in your area. Based on Business Insider’s research, Subway is at a decline. Subway Franchise Investment Cost in India: If you are aspiring to become a Subway franchise owner, ... Little Caesars Franchise (Cost, Profit, Eligibility) 05/08/2020 / 0 Comments. As a startup entrepreneur, it is most of the time advisable to tap into a franchise than starting up your own business, especially if you want to go into the food or restaurant business. A Subway franchise makes less than other fast food restaurants, such as McDonald's at $2.6 million and Chick-Fil-A at $3.1 million. Subway Food Court. And you will also need to make provisions for an Advertisement fee of about 4.5% of the total gross sales. It also didn’t help that less healthy fast-food restaurants like McDonald’s and Wendy’s were also innovating and creating menu items like salad, parfaits, fruits, and other “healthier” options. The initial startup fee of a Subway Franchise is $15,000. A good location to establish the franchise (subject to approval); Detailed market research and business proposal; Liquid cash requirement from $30,000 to $90,000. But in the advent of technology and innovation inventing a style does not mean you will always stay on top of your competition – especially if your competition knows how to innovate. The exponential growth the company enjoyed has allowed it to grow to about 43,000 stores open in about 100 countries across the world as of the year 2016. All figures in Item 7 are estimates only. In 1965, founder Fred DeLuca borrowed $1,000 from co-founder Peter Buck as capital to build the restaurant, which was only supposed to pay for DeLuca’s medical school tuition and Buck’s doctorate. In terms of fast food restaurant franchises, Subway had always seemed to be the franchise of choice. This has seemed to be the destination of choice for all who desire healthy meals, which are affordable and qualitative. Three years later, it was renamed “Subway.”. However, exceptions do apply. Think of it this way: if you franchise a Subway in a good location in your area, you could be making a thousand dollars a day in sales. There was a survey of several hundred owners performed by a Subway owners association that showed the average store profit is in the $28,000 per year range. How much is a Subway franchise? Daylight Donut Franchise: Startup Cost, Profit & Opportunities, Habit Burger Franchise: Startup Cost, Profit & Opportunities, Buffalo Wild Wings Franchise: Startup Cost, Profit & Opportunities, Freddy’s Franchise: Startup Cost, Profit & Opportunities, Pieology Franchise: Startup Cost, Profit & Opportunities. In terms of franchising, that’s the cost of a less popular restaurant franchise. The total cost of opening a Subway is estimated at $150,000 to $300,000. Subway has closed around 1100 stores in USA in 2018, as a franchisee we feel like we are just their slaves, they control everything, they collect 12.5% straight off your weekly sales, with rising labor and food cost subway franchise is now almost impossible to survive. Subway saw a two-billion dollar boom in the ‘90s and early ‘00s. Subway, on the other hand, has remained stagnant in the last few years. In terms of franchising, Subway has consistently been one of the top growing franchises in the world. Not all franchise applicants are approved for a Subway franchise. The high competition from other franchises and other Subway franchise owners hurts franchise owners more than it will hurt Subway itself. Posted by franpro under Franchises From https://www.thefranchiseking.com 571 days ago Made Hot by: FutureVision on July 3, 2019 11:43 am. : Top Considerations for Online Classes During the Pandemic. It’s a small number, but for small business owners it can mean significant thousands of dollars that could be the difference between profitability and loss. You will need to consider real estate costs, the cost of equipment and signs, the costs of licenses and permits, the cost of uniforms, the cost of insurance, etc. Subway Franchise Cost and Profit. It involves the franchise fee of $15,000. Here’s a breakdown of a Subway franchise cost and profit system: 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 If you want to buy a Subway Franchise, you will be expected to complete an application form on the internet or you could request one from their development office. Marketing support & Advertisement assistance Beyond gaining approval of a Subway business site, the franchisee entrepreneur must also have a specified net worth between $80,000 and $310,000. Subway Food Court Franchise Cost: INR Rs 20 Lakhs to 30 Lakhs Subway Food Court Area Required: 170 Sq Ft Subway Non-Food Court. This is due to the thousands of franchises all over the world that are closing down due to the lack of sales. If you have decided to become a Subway Franchisee and would want to know how much a Subway Franchise makes in a year. Subway Franchise,Cost,Profit,Owner – How to Apply (2021) Subway Franchise – investment,contact number,subway owner & application process. Subway’s royalty fees are at 8%, which is twice of what McDonald’s charges its franchisees at 4%. The initial startup fee of a Subway Franchise is $15,000. Subway is one of the cheapest major fast-food restaurants to franchise. HOW MUCH DOES A SUBWAY FRANCHISE MAKE? Your email address will not be published. Before applying for the Subway Franchise opportunity, one thing you will need to bear in mind is the cost of the Subway Franchise and then decides if you have the financial capacity to embark on the financial implications of getting/buying a Subway Franchise. Their licensing fee is at $15,000, much cheaper than other popular food brands like McDonald’s. A question asked of me over and over again has to do with Subway franchise cost and Subway profit. The company charges a $15,000 franchise fee and startup costs range from $105,800 to $393,600. IMPORTANT: THESE TEXT MESSAGING TERMS OF USE APPLY ONLY IF YOU HAVE OPTED TO RECEIVE TEXT MESSAGES FROM FRANCHISE WORLD HEADQUARTERS, LLC on behalf of Doctor’s Associates Inc., (“DAL”), the franchisor of the Subway® brand for the USA, and Subway Franchisee Advertising Fund Trust, Ltd. the advertiser for the Subway® brand in … As a result, these restaurants took away market shares that originally went exclusively to Subway. You will then be expected to take a basic skills test. But in the past years, the number of new Subway franchises appears to be dwindling. To get started, a Subway franchise costs $15,000 for the franchise fee (in the USA and Canada). He was born in the year 1947 in New York and thereafter moved to Connecticut where he spent most of his childhood. Arguably, Subway invented the “open kitchen” style that its known for. Subway franchisees need less money because the sandwich chain's restaurants are cheaper to open. But by the recession in the late ‘00s, consumers were more concerned about prices than healthy options, so Subway had to re-center its advertisements and highlight the value in their sandwiches for just $5. … Appreciate the investment required for a restaurant franchise. This business seemed lucrative to me a few years ago and I am writing this on the basis of feasibility studies that our team conducted for a new Subway franchise in Mumbai. Before opening a Subway franchise in India, cost calculation is essential. The development office and the Doctor’s Associates Inc, which is the parent company of the Subway Franchise will then be the ones to determine if you can meet up with the standards required to get a Subway Franchise. Introduction to Profit in Subway Franchise Business in India (Cost to Start). The first step that is expected of the franchisee for Subway is to identify a store and then pay the initial cost. Over the years, however, Subway franchises have begun to decline. The ideal location is a place with no Subway franchises in the area and little to no similar fast food restaurant competitors in a high-traffic location. Two decades later, the first Subway outside North America opened in Bahrain in 1984. And you will also need to make provisions for an Advertisement fee of about 4.5% of the total gross sales. Costs to Open a Subway Franchise The cost of getting a Subway franchise is $15,000, and the minimum launch costs, which include construction and equipment costs, range from $ 116,000 to $ 263,000. Subway Food Court. One of the major selling points that Subway enjoys is the low-cost offering of its franchise. When he was 17 years old, he requested a $1000 loan from a family friend, Dr. Peter Buck to open a sandwich shop. Here are the things you should evaluate before you decide to invest in the Subway franchise: Franchising and Licensing Fees In terms of franchising fees, Subway is one of the cheapest food establishments to franchise in the country. This goes to the advertising Subway Corporate makes that benefits all franchises. To join investors with Subway franchises, it’s essential to consider high individual costs. Their restaurant was a financial success and would go on to open franchises throughout the United States. Initial franchise fee. Subway fast food franchises - the next step to owning your future Subway is one of the cheapest restaurants to franchise. This could cut down your sales to a third because now consumers have more options on which Subway to go to. The total amount of investment will depend on the location, rent and size of store. Any loans taken to purchase the store (ave. store cost to build is in the $200K range) needs to be subtracted from this number. Sales have not gone up nationally, but costs have. The minimum manpower required to run a Subway Franchisee is 8 personnel. Subway's startup costs, which include construction … This rebrand helped them pull through the recession. Your email address will not be published. And are the profits worth the cost, or is it much more practical to look into other options? Let’s look at McDonald’s franchising costs. Yet, Subway’s popularity rivals the big names of the fast-food industry yet keeps its franchising costs low. Subway Franchise Profit Estimates With the wide reach of 2428 stores across the United Kingdom, Subway makes pretty decent profit annually ranging up to $490k or £381k per store annually according to QSR Magazine. How to Get Lassi Shop Franchise in India ( Cost, Profit & Eligibility) 29/07/2020 / 0 Comments. Required fields are marked *. In the year 1974, it changed the name to become Subway and had 16 different store units opened across the state of Connecticut.eval(ez_write_tag([[300,250],'startupback_com-box-4','ezslot_4',146,'0','0'])); In the same year 1974, Subway opened its first franchise store in Wallingford, Connecticut and since then the concept has continued to grow. Here’s what you need to know. With the rate at which the Subway Franchise is ranked and the level of mind-blowing services they render to their customers, you as a franchisee should expect a very high return from your investment into the brand. Subway ® has some of the lowest start-up costs in the industry for a franchise of its size and stature. When I left Subway, owners were were only getting 7.5% of annual sales. Subway Franchise Cost Breakdown. In terms of franchising, that’s the cost of a less popular restaurant franchise. Unlike other fast food franchises that are picky about an applicant’s location relative to their existing franchises, Subway’s franchise contract does not protect existing franchises. In fact, Subway’s profitable franchise model is what got many potential franchise owners to invest, leading to Subway’s boom in the United States and the rest of the world. Thus, franchisees will be competing with other franchisees for a market share in a specific area. REQUEST A BROCHURE. Subway is famous for its well-crafted salads and sandwiches. Arguably, the reason for Subway’s fast growth and appeal to potential franchise owners is its low-cost high-return model. These also ate away at Subway’s market share even more. This can be operated from a single location selling foot-long and special sandwiches and salads. They saw a setback in 2016 when hundreds of US stores experienced a net loss that resulted in a few hundred stores closing down., and this continued to 2017. On top of the $45,000 franchisor fee, a franchiser will have to spend at least one million dollars on all the franchising costs. The fast-food business is increasing at a fast pace and traders are gaining good profit from it.Other than this, starting a restaurant or a cafe is also worthwhile. By comparison, McDonald's charges a franchise fee of $45,000 and startup expenses can cost up to $2.2 million. 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 … Before it was one of the fastest-growing franchises in the world, Subway began as a restaurant called “Pete’s Super Submarines” in Bridgeport, Connecticut. Also with the kind of such low initial set up cost earning such a profit is very well justified to invest in the brand. Subway Non-Food Court Cost: INR Rs Subway Non-Food Court Area Required: 350 Sq Ft #2. As of 2020, there are over 41,500 Subways worldwide, all of them independently owned. Your email address will not be published. He gave the shop the name Pete’s Super Submarines. Overcoming the 5 Common Financial Problems People Face, 6 Ways Technology Can Improve Your Business’s Efficiency, You Got Served: How to Handle Legal Disputes Like a Pro, Desktop or Laptop? The franchisor offers to finance … And about 8 personnel is required as manpower to run a Subway Franchisee. Nevertheless, we can still make some assumptions about investments required for Subway franchise in India, profit margin, ROI and other financial facts. One of the businesses you can delve into is the Subway Franchise. Though the total cost of setting up a store will vary depending on the size and necessary renovations, the estimated total investment is around £85,570 to £221,240. The total cost of opening a Subway is estimated at $150,000 to $300,000. At minimum, an approved Subway franchise must have: Once a franchisee applicant has this, they must sign a licensing agreement, which gives the franchisee the right to use Subway’s operational procedures, trademarked property, and branding. Although he was a hard-working, competent and dependable young man, the $1.25-per-hour he earned working at the local hardware store wouldn’t be enough to finance his education. In 2012, prior to Subway’s decline, the average Subway franchise generated $482,000 in revenue. So, in total, even after the Subway is established, franchisees will have to shoulder 8.5 percent total of their gross sales back to Subway. They have been able to build a strong strategic concept round their sandwiches and the overall fast-food experience. The franchise cost for Subway is $15,000. It’s the same model, the same sandwiches, and not much else for people to choose Subway over any other fast food restaurant. This late into the game, how profitable is opening a Subway franchise? Required fields are marked *. Sub way recommends the Franchise to have 170 Sq. Subway can be considered to be a well-established licensor of its numerous franchise stores. The franchisee will also benefit from the marketing Subway’s corporate does for all franchisees. Subway franchisees pay 12.5% every week (8% royalties, 4.5% advertising). GBP (£) Euro (€) Costs. That is not to say that Subway franchises were not successful. If you’re not totally sure, hire a consultant to help guide you through this decision. Own a Subway Franchise and become a part of the international family of franchise owners. Investment Cost: INR Rs … Your email address will not be published. Subway Franchise Cost And Profit: How Much Can You Make? Then, Quiznos, Jimmy John’s, Firehouse, Potbelly, Jersey Mike’s, and Panera came along and innovated on Subway’s open kitchen model. You should be aware that the company is quite profitable due to its reputation as being one of the foremost franchises with the best fast-food sandwich in the industry. Subway currently offers a discount of the franchise fee for qualified US Veterans who purchase a franchise. Equipment leases are written for term of five years. This is estimated to be between the range of $120,000 to $270,000 and when you compared this with other fast-food franchises, it is extremely lower. According to Forbes, the average revenue of a Subway franchise in 2013 was $481,000, as cited by an industry study. The franchise fee also covers training and any consulting needed. If you’re feeling a little lost, consult with a franchise consultant or contact Subway’s franchising team to ask for more information. Unlike other fast food restaurants like McDonald’s, you can see the fresh ingredients put into your sandwich and see to it that the Subway staff are making it according to your directions. As at the year 2013, Subway was launching at least 50 new restaurants every week. These drawbacks are simply to show that franchising Subway isn’t as profitable or as easy as the company may make it out to be. Ft area for the food court and 350 Sq Ft. for non-food court space. But by 2014, the novelty had run its course and Subway began failing in sales. From the franchise fee to start-up costs to royalties paid back to Subway global headquarters, there are various costs to calculate. When you buy into a franchise, you are presented with the opportunity to get the license to established business and then have uninterrupted access to their business procedures and processes. Before you sign anything, make sure you have enough finance to cover the cost of owning a Subway franchise for the first year, and that you have enough cash to pay for the franchise fee upfront. The business of fast food is increasing in India day bay day and all the traders who trades, making good money. So, don’t get too hasty calling Subway to apply as a franchisee until you know for sure what you’re getting into. If you can pass this after the assessment, you will then be allowed to investigate into the Subway Business Opportunity with the assistance of a local development officer. for Indian units has not been particularly mentioned by the management. HOW TO BUY A SUBWAY FRANCHISEeval(ez_write_tag([[300,250],'startupback_com-banner-1','ezslot_5',147,'0','0'])); Subway offers qualified franchisees the license to establish and run a retail franchise business using their brands and concepts. They have very high popularity in the franchise business and are known to have one of the lowest franchise costs across the United States. You will be offered a Franchise Disclosure Form. Subway’s low-cost franchising that has once been attractive to franchisees is now the reason many are suffering. By 2016, that had dropped to $422,500. Annually, it is reported that a typical Subway restaurant averages total sales of approximately $500,000. Generally, the operating cost of a Subway Franchise will be 1 Lakhs per month and the break-even can be concluded at the minimum rate of 40% per year. From 2012 to 2017, Subway saw a 25% fall in business. With thousands of stores closing since 2016, potential franchisees are wary about hopping on the Subway as a form of investment. Subway also pays for the ongoing costs of its franchise. So, if you do decide to franchise a Subway, there’s no guarantee that you’ll be the only Subway franchise within that area. Subway Franchise Cost in India; Subway supplying the franchises with two different business models, you need to decide on the ideal business model based on subway cost in India and area space. The initial cost will include the real estate value and also construction expenses of the identified store. The total investment is estimated between $116,000-$263,000 in the USA and $102,000-$234,000 in Canada. Subway Franchise is the largest global fast-food chain that offers some exciting prospects for those seeking to partner as a franchisee.